Category Archives: artificial intelligence

Say Goodbye to Comp

Fellow blogger, Joe Paduda, today wrote a very prescient article about the impact the jobless economy will have on workers’ comp in the coming decades.

While the idea of driverless trucks may be something in the works, there are many factors working against it from becoming reality in the near term, and perhaps for many years to come. Laws and insurance requirements and what to do if the truck breaks down on a stretch of highway not easily accessible by repair trucks or miles from the nearest truck stop, will have to considered before driverless trucks put drivers out of work.

Yet, as Joe points out, manufacturing is already seeing a loss of jobs due to automation and higher productivity, which will lead to lower consumer costs, but will exact an even higher cost on the nation’s stability and will force politicians to come to grips with what to do with a permanently unemployed population, especially those in the service sector, who are being replaced, and will be replaced by automated cashiers, as well as those occupations tied to the workers’ comp industry.

If, as I reported yesterday, that 50% of all jobs will be gone by 2025, what do you do with those individuals who lose their jobs to machines and software?

It is a question that few have asked, and one that fewer have provided answers for. Also, what happens, as I also asked yesterday, if the 50% goes to 75% or higher?

The UBI is one idea floating around, but short of that, what else can we do to put permanently unemployed back into the workforce once technology makes them, in the words of that “Twilight Zone” episode, “Obsolete!”

It makes no sense, Joe states, to reform a system that won’t be around much longer. So, say goodbye to workers’ comp, say goodbye to claims adjusters, occupational therapists and physicians and nurses in same, pharmacy benefit managers, rehabilitation personnel, return to work specialists, case managers, utilization reviewers and bill reviewers, as well as underwriters and lawyers.

The Technological Revolution and Health Care: On the Same Track?

Yesterday, I ran across an interview on Truthout.com by Mark Karlin. Mr. Karlin was interviewing the two authors of a new book, People Get Ready, by Robert W. Mc Chesney and John Nichols.

Mr. Karlin’s first question, answered by Mr. Mc Chesney, intrigued me and got me thinking of what is happening in workers’ comp, as well as what is happening in health care.

As I mentioned briefly in my last post, automation and artificial intelligence will have a significant impact on the future of workers’ comp, and this is emphasized in Mc Chesney and Nichols’ book. There have been other books and articles recently on the subject, so this is nothing new.

But what got me thinking is that Mr. Karlin addressed the main question the book raises — namely that the conventional wisdom has always been that the more advanced technology becomes, the more beneficial it will be for humans.

Mr. Mc Chesney responded that convention wisdom said that new technologies will disrupt and eliminate many jobs and industries, and that they would be replaced by newer industries and better jobs.

Mc Chesney also said that they argue the idea that technology will create a new job to replace an old one is no longer operative; nor that the new job will be better than the old one.

According to Mr. Mc Chesney:

Capitalism is in a period of prolonged and arguably indefinite stagnation. There is immense unemployment and underemployment of workers, which we document in the book, taken from entirely uncontroversial data sources. There is downward pressure on wages and working conditions, which results is growing and grotesque inequality. Workers have less security and are far more precarious today than they were a generation ago; for workers under the age of 30, it is a nightmare compared to what I experienced in the 1970s.”

Likewise, Mr. Mc Chesney, continued:

there is an immense amount of “unemployed” capital; i.e. wealthy individuals and US corporations are holding around $2 trillion in cash for which they cannot find attractive investments. There is simply insufficient consumer demand for firms to risk additional capital investment. The only place that demand can come from is by shifting money from the rich to the poor and/or by aggressively increasing government spending, and those options are politically off-limits, except to jack up military spending, which is already absurdly and obscenely high.

Contemporary capitalism is increasingly seeing profits generated, he adds, not by its fairy tales of entrepreneurs creating new jobs satisfying consumer needs, (remember Mitt Romney’s ‘job creator’ line of bs?) — but by monopolies, corruption and by privatizing public services.

Finally, Mr. Mc Chesney states that:

Capitalism as we know it is a very bad fit for the technological revolution we are beginning to experience. We desperately need a new economy, one that is not capitalistic — based on the mindless and endless pursuit of maximum profit — or one where capitalism has been radically reformed, more than ever before in its history. It is the central political challenge of our times.

They are not the only ones arguing for such reform or revolution, Senator Sanders notwithstanding. In previous posts, I have mentioned the biopsychosocial theory, Spiral Dynamics, and the book by Said W. Dawlabani, MEMEnomics The Next-Generation Economic System.

Other authors such as Richard Wolff, and Robert Reich have written books about this subject, and like Mc Chesney and Nichols have reached similar conclusions. Yet, Dawlabani, accessing the Spiral Dynamics model, goes much deeper into why we got here and what we need to do to get out of it.

Such a future version of capitalism has been called by many different names that I have come across in the past decade or so. Natural Capitalism, conscious capitalism, and so on, to name a few. But the main point is as Mc Chesney and Nichols points out in their book, the technological revolution, rather than liberating humans and making our lives better, as Mc Chesney says in the interview, may have the perverse effect of reinforcing its stagnating tendency.

An issue related to automation and artificial intelligence and its impact on the future of work, is if we are all replaced by machines and software, how will people be able to live? How will the goods and services produced by automation be sold, and to whom? Only those who are fortunate to have employment in jobs that machines cannot do? Or will we have to go back to a time when money was only the purview of those who had it?

The answer to these questions have also been raised by those in the tech world, and one suggestion they have come up with is a national basic income (NBI), and naturally has already been shot down as a bad idea by those on the Right. I guess they really want people to be poor.

But this idea should be kept on the back burner for now, as given the political climate in this country, that idea will be dead on arrival. Yet, while many have acknowledged what Mc Chesney, Nichols and others have said is happening, the other side — namely the current Speaker of the House and others in his party, have doubled down on their stubborn adherence to the rantings of a two-bit novelist, Ayn Rand and Ayn Randism.

Which brings me to the other point I wish to discuss, and that bears on what happens in the overall economy at large.

If automation and artificial intelligence will lead to elimination of many, if not all jobs, and if that will require a new economy as Mc Chesney and Nichols, and others have argued, what does that mean for the health care industry that seems to be going in the opposite direction?

Even before the enactment of the ACA, health care has become more centralized, bureaucratic, consolidated and more profit-driven than ever. The ACA in many ways has accelerated this process, and the direction it is headed is towards a more consumer-driven form of health care, and one where large hospital systems have integrated physicians and insurance services into their business plan.

The move among some physicians and physician practices towards concierge medicine, also is a sign that health care is moving towards a more capitalistic health care, in that it creates two classes — those who can afford concierge medicine, and those who cannot.

The transition to a new economy will not happen overnight, and may not happen for some time, especially if the forces aligned against it remain strongly opposed to reform. But if the health care system collapses, as I mentioned previously in articles last week, then along with the stagnation of capitalism generally, there will be an opportunity to move in that direction in health care as well.

Calling for ‘Medicare for All’ now with firm opposition to anything that spends government money or has a social benefit other than producing profit for a few, is only a waste of time and a con job.

There are only two ways an economic system and its attendant political system changes; by revolution or evolution. One is violent and bloody, the other happens because the old is replaced by the new so seamlessly that no one gets too emotional when it happens. An election does not do that, especially when the opposition is headed toward fascism.

That issue is for another time and place, and the rest of Mc Chesney and Nichols’ book discusses the current presidential campaign. I wanted to discuss the dichotomy between where capitalism is headed and where health care is headed, and at some point, health care will have to fall in line with the new capitalism.


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Blog is now viewed all over the world in 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

Share this article, or leave a comment below.

Average Medical Costs in Work Comp Leveling Off

Once again it is time to look at the average medical costs for lost-time claims in workers’ comp. as reported last week in the NCCI State of the Line Report at the 2016 Annual Issues Symposium.

Those of you who have read my White Paper, or have followed this blog for sometime, know that this is an annual meeting of industry people in Florida to look at what is happening in workers’ comp.

It is not a conspiracy meeting of insiders looking to harm injured workers, as one deranged individual has suggested. [Emphasis added]

But rather, it is one way in which insurance personnel can understand where the workers’ compensation insurance market is headed. And the word this year, from Joe Paduda’s reporting last week is “Transitioning”.

Workers’ comp is transitioning and what it is transitioning into has been discussed previously by both Joe and Peter Rousmaniere, and that I have described in earlier posts.

One aspect of this transitioning has to do with automation and the development of artificial intelligence that will make many current jobs obsolete [remember that Twilight Zone episode with Burgess Meredith and Fritz Weaver where the State declared them both ‘obsolote’?]

Another part of this transitioning relates to the so-called ‘gig economy’ of companies like Uber and Lyft, Airbnb, etc., as well as the move of some jobs to part-time from full-time status, whatever the reason given.

But let’s move on to the issue at hand, which is, what is the average medical cost for lost-time claims this year. As you will see in the first chart, the average medical cost for lost-time claim dropped 1% from 2014, where there had been an increase from 2013 of 3%.

Chart 1.

Avg Med Cost 2016

Unlike past charts, this year’s chart shows that there are two years of preliminary data, 2014 and 2014. Compare that to last year’s chart, found here, as well as the two previous years, 2014 and 2015.

In 2014, the average medical cost per lost-time claim was $28,800; in 2015, the average medical cost dropped a mere $300 to $28,500, not very significant, but perhaps signalling a leveling off. You will notice in my previous articles and in my White Paper that I included a trendline that always showed the cost increasing, but it is apparent by looking at this year’s chart that there seems to be a flattening occurring.

According to Kathy Antonello’s report, the two key takeaways are:

  •  Medical severity change has moderated in recent years
  • The 2015 average medical cost is 1% lower than the 2014 value

Another factor to consider is how much of the total claim cost does medical payments per claim represent. As shown in the second chart, medical costs have remained at 58% of total claim cost, with indemnity (lost wages) representing the rest.

Chart 2.

Ind Med Split

As you can see, medical costs have risen significantly since 1981. Another way to view the change in average medical cost and its apparent leveling off can be seen in the third chart.

Chart 3.

WC Ave Med Cost

Chart 3 indicates that the cumulative change in excess of medical care inflation from 1995 to 2015 has joined the cumulative change in average medical cost from 1995 to 2015p in leveling off.

What this means, according to Ms. Antonello, is that workers’ comp medical costs per claim have risen at a much faster pace than indemnity over the past thirty years, medical inflation has outpaced wage growth, medical lost-time severity has increased 214% since 1995, and the corresponding increase in medical lost-time severity over and above the increase in medical price inflation is 55%.

What this also indicates is that workers’ comp is changing, and many predict that in a few years, workers’ comp as we have known it will disappear. Then perhaps treating injuries to certain body parts as knees, backs, shoulders, etc., common to both workers’ comp and general health care won’t be separated into different silos, but rather paid for as one medical expense under an employer’s health plan or even a single payer plan.

Either way, medical travel, given the predicted shortages of physicians and nurses, may present itself as a viable alternative, and not be subjected to antiquated laws and statutes that restrict an injured worker from getting medical care wherever they want to. And if predictions about artificial intelligence and automation are correct, then it won’t really matter, since very few individuals will be hurt on the job in the future.

There is an old Chinese curse: “May you live in interesting times.”


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Blog is now viewed all over the world in 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

Share this article, or leave a comment below.

Tuesday Evening Catch-up (Not ‘Ketchup’)

Now that my company has left from the weekend, and my recent job interview came and went (did not get the job), I want to catch up on two items from yesterday that caught my attention, and will impact the future of workers’ comp.

The first item comes from Joe Paduda.

Joe’s article, “What Job?” asks the question, “what job will injured workers return to?”, and states that many of the high-injury rate jobs that drive a lot of work comp premiums and services won’t exist in ten years, and a lot of low-injury rate jobs will disappear as well.

One industry that Joe sees as suffering jobs disappearing is the trucking industry, where the replacement of long-haul drivers with autonomous driving will leave many without employment. The trucking industry employs 3.5 million drivers and pays $40,000 a year.

Along with the loss of trucking jobs, are those jobs that depend on, and support the truckers and the trucking industry such as people who work at truck stops, wait staff, hotel staff, and mechanics.

To further the discussion, Tom Lynch, in Workers’ Comp Insider.com writes that artificial intelligence is going to bring change on a monumental scale.

According to Tom, “I suggest it is not hyperbole to predict that we are on the verge of an epochal change, something like a kind of mass extinction, and what’s going extinct is an enormous number of jobs. This change might be even more significant than humanity’s evolution from an agrarian to an industrial economy.

Tom mentions a report that Joe cites that suggests up to 47% of jobs run the risk of going the way of the Woolly Mammoth by 2025.

It is highly controversial and its conclusions have been hotly debated.

Even so, Tom says that the most conservative naysayers agree that the figure is at least 16% (but that figure doesn’t take into account the jobs that the AI revolution will create, estimated at about 9%, for a net job loss of 7%).

Regardless, he says, millions of jobs will be lost.

The next item is from Stephanie Goldberg of Business Insurance.

Stephanie reported that the Oklahoma Workers’ Compensation Commission unanimously ruled that the state’s opt-out law is unconstitutional.

The commission ruled that provisions of the Oklahoma Employee lnjury Benefit Act are “inoperable,” unconstitutionally depriving injured workers of equal protection and access to the court, according to Ms. Goldberg.

The ruling is immediately appealable to the state’s Supreme Court, so if they uphold the ruling, it would leave Texas as the one and only state with an opt-out option. Tennessee has not voted on the law this year.