Category Archives: Cost Control

What’s Really Wrong With Health Care?

Book Review

Health Care Under the Knife: Moving Beyond Capitalism for Our Health

by Howard Waitzkin and the Working Group on Health Beyond Capitalism

Monthly Review Press
e-book: $18.00
Paperback: $27.00
Hard cover: $45.00

Americans commemorated the assassination of Martin Luther King fifty years ago on Wednesday. Two years earlier, Dr. King, in March 1966, said the following during a press conference in Chicago at the second convention of the Medical Committee for Human Rights (MCHR):

“…Of all the forms of inequality, injustice in health is the most shocking and the most inhuman because it often results in physical death.”

The part of the quote up to the word ‘inhuman’ begins the Introduction of a new book I just began reading called, Health Care Under the Knife: Moving Beyond Capitalism for Our Health by Howard Waitzkin and the Working Group on Health Beyond Capitalism, published by Monthly Review Press, the publishing arm of the Monthly Review, an Independent Socialist magazine.

Those of you who know me, and those of you who have read many of my previous posts, know that my educational background is in the Social Sciences, as my B.A, is in Political Science and History, with Sociology and African-American Studies thrown in, along with some Humanities coursework. My M.A. is in History, with emphasis on American Social History, especially post-Civil War until the mid to late 20th century. In addition, I also have a Master’s degree in Health Administration (MHA).

But what you may not know is that my leanings have been to the far left, and I am still proudly and defiantly so, even if I have tempered my views with age and new insights. I think that is called wisdom.

So, as I set out to read this book, much of the material presented in it will not be new to me, but will be perhaps new to many of you, especially those of you who got their education in business schools, and were fed bourgeois nonsense about marketing, branding, and other capitalist terms that are more apropos for selling automobiles and appliances and such, but not for health care, as this book will prove.

In this book, there will be terms that many of you will either find annoying, depending on your own personal political leanings, or that you are unfamiliar with. Words such as alienation of labor, commodification, imperialism, neoliberalism, and proletarianization may make some of you see red. So be it. Change will not occur until many of you are shaken out of your lethargy and develop your class consciousness.

“Capital is reckless of the health or length of life of the laborer, unless under compulsion from society.” Karl Marx

While the publisher of the book is an independent socialist foundation, it is no means a Marxist or Communist organization. And from my perusal of the names of the contributors to the chapters of the book, I have found that they are all health care professionals or academics, as well as activists.

Two of the contributors of one chapter, David Himmelstein and Steffie Woolhandler, are familiar to many in the health care industry, as they have co-authored many peer reviewed articles in health care journals that I have cited in my previous blog posts.

Be warned. This book may piss you off. Too bad. The future of health care is at stake, as is the health of every man, woman, and child in the U.S. and around the world.

This will probably be true no matter what part of the health care industry you work in. Physicians, insurance company personnel, pharmaceutical company executives, Wall Street investors and money managers, service providers, vendors, consultants and many others will discover inconvenient truths about the businesses that provide their livelihood. As stakeholders in the status quo, you will be resistant to the prescriptions the writers offer for correcting the mistakes of the past, and the recommendations they suggest for the future of health care.

This book will not only be relevant to the health care industry, but also to the workers’ compensation and medical travel industries, as each is a subset of health care.

And if you do get upset or angry at me for what I have to say about health care, then you are part of the problem as to why health care in the U.S. is broken. Those of you around the world will also learn that your own countries are moving in a direction that sooner or later will result in your health care system mirroring our own, as the authors will point out.

This is a book that will shake you to your core. So, sit back, relax, and keep an open mind. It’s about to be blown.

The book is divided into five parts, with each part containing at most five chapters, as in Part Five, or two chapters, as in Part Two. Parts Three and Four, each contain four chapters. Part One deals with Social Class and Medical Work, and focuses on doctors as workers, the deprofessionalization and emerging social class position of health professionals, the degradation of medical labor and the meaning of quality in health care, and finally, the political economy of health reform.

Throughout the book, they ask questions relating to the topics covered in each chapter, and in Part One, the following questions are asked:

  • How have the social-class positions of health workers, both professional and non-professional, changed along with changes in the capitalist global economy?
  • How has the process of health work transformed as control over the means of production and conditions of the workplace has shifted from professionals to corporations?

These questions are relevant since medicine has become more corporatized, privatized, and financialized. The author of the second chapter, Matt Anderson, analyzes the “sorry state of U.S. primary care” and critically examines such recently misleading innovations such as the “patient-centered medical home”, “pay for performance”, the electronic medical record, quantified metrics to measure quality including patient satisfaction (“we strive for five”), and conflicts of interest as professional associations and medical schools receive increasing financial support from for-profit corporations.

Part One is concludes with Himmelstein and Woolhandler responding to a series of questions put to them by Howard Waitzkin about the changing nature of medical work and how that relates to the struggle for a non-capitalist model of a national health program. Himmelstein and Woolhandler comment on the commodification of health care, the transformation that has occurred during the current stage of capitalism, the changing class position of health professionals, and the impact of computerization and electronic medical records.

Part Two focuses on the medical-industrial complex in the age of financialization. Previous posts of mine this year and last, reference the medical-industrial complex, so my readers will be familiar with its usage here. In this section, the authors tackle the following questions:

  • What are the characteristics of the current “medical industrial complex,” and how have these changed under financialization and deepening monopolization?

Two corollary questions are raised as follows:

  • Are such traditional categories as the private insurance industry and pharmaceutical industry separable from the financial sector?
  • How do the current operations of those industries reflect increasing financialization and investment practices?

Once again, Matt Anderson authors the first chapter in Part Two, this time with Robb Burlage, a political economist and activist. Anderson and Burlage analyze the growing similarities and overlaps between the for-profit and so-called not-for-profit sectors in health care, considering especially the conversion of previously not-for-profit corporations such as Blue Cross and Blue Shield to for-profit.

The second chapter in Part Two is authored by Joel Lexchin, an emergency care physician and health policy researcher in Canada and analyzes monopoly capital and the pharmaceutical industry from an international perspective.

Part Three looks at the relationships between neoliberalism, health care and health. Before I go any further, let me provide the reader with a definition of neoliberalism in case the authors assume that those who read this book understand what it is.

According to Wikipedia, Neoliberalism or neo-liberalism refers primarily to the 20th-century resurgence of 19th-century ideas associated with laissez-faire economic liberalism. Those ideas include economic liberalization policies such as privatization, austerity, deregulation, free trade and reductions in government spending in order to increase the role of the private sector in the economy and society. These market-based ideas and the policies they inspired constitute a paradigm shift away from the post-war Keynesian consensus which lasted from 1945 to 1980.

These neoliberal policies have been associated in the U.S. with the Republican Party and the Conservative movement since the election of Ronald Reagan. In the UK, the rise of Thatcherism ended the long dominance of the Labor Party’s left-wing until Tony Blair’s New Labor took over. Bill Clinton’s election in the U.S. in 1992, diminished some of these policies, and implemented others such as welfare reform, a goal Republicans had wanted to achieve for decades.

Returning to Part Three, the questions asked here are:

  • What is the impact of neoliberalism on health reforms, in the United States and in other countries?
  • What are the ideological assumptions of health reform proposals and how are they transmitted?
  • What are the effects of economic austerity policies on health reform and what are the eventual impacts on health outcomes?

In the next chapter, Howard Waitzkin and Ida Hellander, a leading health policy researcher and activist, trace the history of the Affordable Care Act initially developed by economists in the military during the Vietnam War. International financial institutions, the authors say, especially the World Bank, promoted a boilerplate for neoliberal health care reforms, which focused mainly on privatization of services previously based in the public sector and on shifting trust funds to private for-profit insurance companies.

Colombia’s health reform of 1994, Hillary Clinton’s in that year as well, Mitt Romney’s plan in Massachusetts in 2006, which led to the ACA, are examples cited by the authors. The chapter also clarifies the ideological underpinnings of the neoliberal model and shows that the model has failed to improve access and control costs, according to the authors.

Economic austerity is closely linked to neoliberalism and have led to drastic cutbacks in health services and public health infrastructure in many countries. As I have recently written in my post, Three Strategies for Improving Social Determinants of Health, economic austerity policies have also affected health outcomes through increased unemployment, food insecurity, unreliable water supplies (Flint, MI), and reduced educational opportunities. Recent teacher protests in West Virginia, Oklahoma and other states are examples of this.

In the second chapter in Part Three, Adam Gaffney and Carles Muntaner, focus on social epidemiology, especially the impacts of economic policies on health and mental health outcomes. They also document the devastating effects of austerity in Europe, focusing on Greece, Spain and England. The authors analyze four dimensions of austerity:

1) constriction of the public-sector health system, 2) retreat from universalism, 3) increased cost sharing, and 4) health system privatization.

This trend would seem to have a negative effect on medical travel from Europe and to Europe, as Europe’s health care systems, long touted as a less expensive alternative to medical care in the U.S., begins to suffer.

Part Four examines the connections between health and imperialism historically and as part of the current crises. The question in this part is:

  • What are the connections among health care, public health, and imperialism, and how have these connections changed as resistance to imperialism has grow in the Global South?

The authors are referring to those countries in the Southern hemisphere from Africa, Asia, and Latin America as the Global South. The Global North refers to Europe and North America, and some other industrialized and advanced countries in the Northern hemisphere.

The authors in Part Four focus on the forces and institutions that have imposed a top-down reform of health care in the Global South. Such organizations as the Carnegie, Rockefeller, and Gates foundations, the World Bank and International Monetary Fund, trade agreements such as NAFTA, CAFTA, TPP, TiSA, and health organizations as the World Health Organization (WHO) and the Pan American Health Organization (PAHO) are all termed “philanthrocapitalism” by the authors, and have implemented policies that have weakened public health standards and favored private corporations.

The final part, Part Five focuses on the road ahead, i.e., the contours of change the authors foresee and the concrete actions that can contribute to a progressive transformation of capitalist health care and society.

The authors address these questions:

  • What examples provide inspiration about resistance to neoliberalism and construction of positive alternative models in the Global South?
  • Because improvements in health do not necessarily follow from improvements in health care, how do we achieve change in the social and environmental determinants of health?
  • How does progressive health and mental health reform address the ambiguous role of the state?
  • What is to be done as Obamacare and its successor or lack of successor under Trump fail in the United States?

Howard Waitzkin and Rebeca Jasso-Aguilar analyze a series of popular struggles that focused on the privatization of health services in El Salvador, water in Bolivia, as well as the ongoing struggle to expand public health services in Mexico. These struggles are activities David and Rebeca participated in during the past decade.

These scenarios demonstrate an image of diminishing tolerance among the world’s people for the imperial public health policies of the Global North and a demand for public health systems grounded in solidarity rather than profit.

In the U.S., the road ahead will involve intensified organizing to achieve the single-payer model of a national health program, one that will provide universal access and control costs by eliminating or reducing administrative waste, profiteering, and corporate control.

Gaffney, Himmelstein, and Woolhandler present the most recent revision of the single-payer proposal developed by Physicians for a National Health Program (PNHP). They analyze the three main ways that the interests of capital have encroached on U.S. health care since the original proposal:

1) the rise of for-profit managed care organizations (MCOs); 2) the emergence of high-deductible (“consumer-directed”) health insurance, and 3) the entrenchment of corporate ownership.

The authors offer a critique of Obamacare, explain and demystify innovations as Accountable Care Organizations, the consolidation and integration of health systems, something yours truly has discussed in earlier posts as they relate to workers’ comp, and the increasing share of costs for patients.

The next two chapters concern overcoming pathological normalcy and confronting the social and environmental determinants of health, respectively. Carl Ratner argues, that mental health under capitalism entails “pathological normalcy.” Day-to-day economic insecurities, violence, and lack of social solidarity generates a kind of false consciousness in which disoriented mental processes become a necessary facet of survival, and emotional health becomes a deviant and marginalized condition.

Such conditions of life as a polluted natural environment, a corrupt political system, an unequal hierarchy of social stratification, an unjust criminal justice system, violent living conditions due to access of guns, dangerous working conditions, and so forth, Ratner dissects as the well-known crises of our age in terms of the pathologies that have become seen as normal conditions of life.

Next, Muntaner and evolutionary biologist Rob Wallace show how social and environmental conditions have become more important determinants of health than access to care. They emphasize struggles that confront social determinants through changes in broad societal polices, analyze some key environmental determinants of health including unsafe water (Flint again), capitalist agribusiness practices, and deforestation in addition to climate change. And they refer to the impact these have on emergent and re-emergent infectious diseases such as Ebola, Zika and yellow fever.

Lastly, Waitzkin and Gaffney try to tackle the question of “what is to be done.” They outline four main priorities for action in the U.S. and other countries affected by the neoliberal, corporatized, and commodified model of health care during the age of Trump:

  • a sustained, broad-based movement for a single-payer national health program that assures universal access to care and drastically reduces the role of corporations and private profit, 2) an activated labor movement that this time includes a well-organized sub-movement of health professionals such as physicians, whose deteriorated social-class position and proletarianized conditions of medical practice have made them ripe for activism and change, 3) more emphasis on local and regional organizing at the level of communal organizations…and attempted in multiple countries as a central component in the revolutionary process of moving “beyond capital”, and 4) carefully confronting the role of political parties while recognizing the importance of labor or otherwise leftist parties in every country that has constructed a national health program, and understanding that the importance of party building goes far beyond electoral campaigns to more fundamental social transformation.

In their book, the authors try to answer key and previously unresolved questions and to offer some guidance on strategy and political action in the years ahead. They aim to inform future struggles for the transformation of capitalist societies, as well as the progressive reconstruction of health services and public health systems in the post-capitalist world.

Throughout this review, I have attempted to highlight the strengths of the book by touching upon some of the key points in each chapter.

If there is a weakness to the book, it is that despite the impressive credentials of the authors, they like many other authors of left-of-center books, cling to an economic determinism as part of their analysis, which is based on theories that are more than one hundred years old.

As I stated in the beginning of this review, my views have been tempered by examining and incorporating other theories into my consciousness. One theory that is missing here is Spiral Dynamics.

Spiral Dynamics is a bio-psycho-social model of human and social development. It was developed by bringing together the field of developmental psychology with evolutionary psychology and combines them with biology and sociology.

In Spiral Dynamics, biology is concerned with the development of the pathways of the brain as the adult human moves from lower order thinking to higher order thinking. The social aspect is concerned with the organizational structure formed at each stage along the spiral. For example, when an individual or a society is at the Beige vMeme, or Archaic level, their organization structure is survival bands, as seen in the figure below.

At the Purple vMeme, or Mythic level, the organizational structure is tribal, and so on. There is, among the authors of the book, an evolutionary biologist, but it is not clear if he is familiar with this theory and what it can bring into the discussion at hand.

It would not only benefit the authors, but also the readers to acquaint themselves of this valuable theory which would present an even more cogent argument for better health care. As the book concludes with a look at the future of health care after capitalism, knowing the vMemes or levels beyond current levels will enhance the struggle.

As I continue reading the book, I hope to gain greater insight into the problems with privatized, corporatized, free-market capitalist health care. My writings to date in my blog has given me some understanding of the issues, but I hope that the authors will further my understanding.

I believe that anyone who truly wants to see the U.S. follow other Western nations who have created a national health program, whether they are politicians like Bernie Sanders, his supporters, progressives, liberals, and yes, even some conservatives who in light of the numerous attempts to repeal and replace the ACA, have recognized that the only option left is single-payer. Even some business leaders have come out and said so.

I recommend this book to all health care professionals, business persons, labor leaders, politicians, and voters interested in moving beyond capital and realizing truly universal health care and lower costs.

 

Advertisements

Medical Travel for Americans is Alive and Well

Many of you have probably thought that going abroad for medical care after passage of ACA was a thing of the past, or that the idea that workers injured on the job would go abroad was a “stupid, ridiculous idea and a non-starter”, have forgotten that medical care in the US is the most expensive in the world.

But the simple, undeniable fact is that we spend too much on medical care and get very poor results and outcomes, while other countries spend far less and get better outcomes.

Why are we so stubborn? And why hasn’t the workers’ comp world realized that they are fighting an uphill battle to lower costs every time they come out with some new strategy or cost containment measure that never lives up to its promise industry-wide?

Sure, there are individual cases where these companies save money for a particular client, but overall, the cost of medical care for workers’ comp still rises, even if that rise is slow at times, or appears to have shrunk, only to rise once again the next year, as seen in the NCCI State of the Line reports.

An article yesterday in Salon.com said that traveling abroad for medical care simply makes more sense — even regular teeth cleaning is four times more expensive in the US than it is in Mexico.

One of the first procedures mentioned in the article involves a Minnesota couple who went out of the country for an in-vitro fertilization (IVF) procedure. On her fourth trip to the Czech Republic, it finally worked, and she got pregnant. The procedure in the US would have cost them between $12,000 and $15,000.

While IVF is not something that workers’ comp would cover, the fact remains that procedures cost far too much in the US, and in the case of IVF, only have a 29% success rate, according to a CNBC report cited in the article.

An estimated 1.7 million Americans traveled abroad for care in 2017, according the Josef Woodman, CEO of Patients Beyond Borders, and author of the same titled book. In my seven years of studying medical travel, Josef Woodman’s name has figured prominently in many articles and forums of discussion on the subject.

The article goes on to say that that is 10 times more than the 2008 estimate from Time magazine.

Some of the top destinations for medical care are: India, Israel (always go to a Jewish doctor first), Malaysia, Thailand, Taiwan, South Korea (unless that little twerp up north gets an itchy trigger finger), and Turkey.

However, there are other, more accessible destinations closer to home like Mexico, Costa Rica, Panama, etc.

Typical operations are orthopedic or spine surgery (are you listening work comp world?), reproductive operations, cardiovascular and eye surgery.

For example, a coronary artery bypass graft (CABG) in the US costs an estimated $92,000 (you could buy a couple of nice cars for that amount), whereas in India, the same operation would cost $9,800.

A total knee replacement (are you still listening ,workers’ compsters?) cost around $31,000 in the good ole US of A, but in Thailand, costs around $13,000. Tell me how you can save that much on a knee replacement using any of your so-called cost saving schemes?

These same operations in Costa Rica would cost 45 to 65% less than in the US, and would not require such long flights from most parts of the US. What are you waiting for? Save some money, I guarantee your insureds will love you for it.

Malaysia would be 60 to 80% less, but why go there when you can go to Costa Rica?

According to Woodman, medical tourism (travel) is a Band-Aid for the country’s dysfunctional health care system.

Woodman told Salon, “I don’t think you can penetrate this with philanthropy. It’s gonna be baby steps all the way. But in the meantime, medical tourism is a really important option.”

Woodman also said he did not like the term “medical tourism” because it is not a vacation. You may have noticed that I use the term “medical travel” instead. It is travel for medical purposes, and if there is tourism component to it, it is incidental to the reason for going in the first place.

Patients who cannot afford dental work, IVF or orthopedic surgery in the US, Woodman said, should consider travelling abroad. If their operation or treatment is expected to cost them $6,000 out of pocket, they will save money — even with the plane ticket.

Oh, by the way, that Minnesota couple spent, get this, only $235 for the IVF, not including flights. With such reasonable cost savings, it would be a no-brainer for workers’ comp to do the same.

But some people are stupid, ridiculous, and non-starters in my book.

Large Variations in Payments for Hospital Outpatient Care to Injured Workers

Back in April of this year, I wrote about a study by the Workers’ Compensation Research Institute (WCRI) in which it was found that fee schedules may increase the number of workers’ comp claims.

Today, the WCRI released a new study that said that “hospital outpatient payments per surgical episode varied significantly across states, ranging from 69 percent below the study-state median in New York to 142 percent above the study-state median in Alabama in 2014,” according to Dr. Olesya Fomenko, co-author of the study and economist at WCRI, and who also is mentioned in my previous post.

The report also stated that “variation in the difference between average workers’ compensation payments and Medicare rates for a common group of procedures across states was even greater—reaching as low as 27 percent (or $631) below Medicare in New York and as much as 430 percent (or $8,244) above Medicare in Louisiana.”

Here are the major findings:

  • States with no workers’ compensation fee schedules for hospital outpatient reimbursement had higher hospital outpatient payments per episode compared with states with fixed-amount fee schedules—63 to 150 percent higher than the median of the study states with fixed-amount fee schedules. Also, in non-fee schedule states, workers’ compensation paid between $4,262 (or 166 percent) and $8,107 (or 378 percent) more than Medicare for similar hospital outpatient services.
  • States with percent-of-charge-based fee regulations had substantially higher hospital outpatient payments per surgical episode than states with fixed-amount fee schedules—32 to 211 percent higher than the median of the study states with fixed-amount fee schedules. Similar to non-fee schedule states, workers’ compensation payments in states with percent-of-change based fee regulations for common surgical procedures were at least $3,792 (or 190 percent) and as much as $8,244 (or 430 percent) higher than Medicare hospital outpatient rates.
  • Most states with fixed-amount fee schedules and states with cost-to-charge ratio fee regulations had relatively lower payments per episode among the study states. In particular, for states with fixed-amount fee schedules, the difference between workers’ compensation payments and Medicare rates ranged between negative 27 percent (or -$631) and 144 percent (or $2,916).

Still think that workers’ comp is doing okay? Still think that keeping the status quo is the best option for injured workers? Still think that thinking outside the box, and considering alternatives to the ever increasing cost of medical care for workers’ comp is stupid, ridiculous and a non-starter?

Or do you believe, as Joe Paduda wrote about today in his blog, that workers’ comp is no longer needed for 90% of America’s employees, as the workplace has become safer than the non-occ environment.

The idea brought forth, and as Joe said, it is an intriguing, but wrong one, is that the medical care can be provided under health insurance, and the disability coverage can be added to long-term or short-term disability insurance.

Whichever way you look at the issue, workers’ comp is not going away, but it is getting more expensive to pay for medical care. The problem here is, too many Americans are slavishly wedded to outmoded ways of thinking, outmoded economic policies and models, as well as an outmoded economic ideology, to think rationally and seriously about alternatives.

Lastly, there are too many cooks (or should that be crooks) with their hands in the pot who have a vested interest in keeping things the way they are. If that is so, then the WCRI is only telling us what we should already know…injured workers are screwed and so are the carriers and employers. As long as outside interests have a hand in the system, and those who profit from higher costs block real change, this situation will only get worse.

I am sure glad it is not my money being wasted like this.

As always, to purchase the study click this link:

http://www.wcrinet.org/studies/public/books/hci_5_book.html

 

Opt-Out: Here We Go Again

Once again, we have to look at the issue of opt-out. This time in the land of Lincoln.

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

Abraham Lincoln

Yet, it seems that Capital is still trying to stick it to Labor by dismantling the workers’ comp state systems.

Stephanie Goldberg, writing yesterday in Business Insurance, reported that the Illinois Policy Institute, an organization the Republican Governor, Bruce Rauner, has previously donated to, issued a report last month calling for “updates” [Emphasis added] to the state’s more than 100-year-old system.

The author of the report and the director of the institute’s regulatory reform, Mark Adams, said in an phone interview that, “the system that is in place isn’t serving workers effectively.”

He acknowledged that it is difficult to reform the system because there are so many stakeholders (a point made by myself and others).

Yet, the report goes on to say that, “the most effective way for government to protect workers is not by a restrictive one-size-fits-all system, by by creating broad rules of the game that give workers more freedom to contract with employers for a deal that is better suited to their own situation.”

On the one hand, what the report is stating makes sense, and seems to agree with the idea of opening up the system to new ways of providing care to injured workers, but if we look deeper at the alleged success of opt-out in Texas, Oklahoma, and the failure to get it passed in Tennessee and South Carolina, we find that the proponents of opt-out have not been very up front and honest on the subject.

What they really want is to blow up the entire workers’ comp system nationwide, and take us back to before Triangle, a point they seem to be making quite successfully in some quarters of the work comp industry because of the apolitical and ahistorical atmosphere in which this issue is often discussed.

We recently lost one brave soul who fought the temptation to drink the kool-aid on opt-out, and we cannot let his memory pass without remembering that he was not fully convinced that opt-out had proved itself.

In my last post, I mentioned what happens to closed systems if they do not change. With opt-out, we would not be seeing an opening of the system that still offers protections to injured workers, albeit with more options and more flexibility, but rather a complete and utter destruction of the entire system, which is what ARAWC and the Illinois Policy Institute wants, so that the employer is the one who benefits, not the employee.

Mark Adams stated that the system they have looks like it deals with the 19th Century, and not with telecommuters, or people who balance caring for a child, an elderly relative, and work responsibilities. True, but going back to the 19th Century when workers had to sue for benefits, if they were lucky to get to court, is not the answer.

One reason why opt-out has not been successful outside of Texas and Oklahoma, is as Stephanie Goldberg, says, the potential for constitutional challenges to opt-out laws could give pause to states considering legislation, as what happened in February when the Oklahoma Workers’ Compensation Commission ruled that provisions of the state’s Employee Injury Benefit Act deprive workers of equal protection and access to the courts, and to unfairly allow employers to define “injury.” The Supreme Court in Oklahoma is reviewing the case.

One wonders what the old railsplitter would think about the idea to deprive Labor of its rights to equal protection and access to courts, and to benefits they deserve when injured on the job. Lincoln would be horrified to learn that Capital has become superior to Labor.

“Florida, We Have a Problem”

Tuesday, Judge David Langham, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings, wrote a rather lengthy post about the differences between cost-shifting and case-shifting in workers’ comp.

Much of what the Judge wrote were subjects that I already discussed in a number of previous posts about cost-shifting and case-shifting, so I won’t go into it here. I am only focusing on the parts that relate to Florida workers’ comp. You can read the entire article yourselves.

But what caught my attention was what he said about Florida and what the Workers’ Compensation Research Institute (WCRI) reported in some of their studies on these issues.

As Judge Langham wrote this week, he wrote a post two years ago that asked the question “Why Does Surgery Cost Double in Workers’ Compensation?”

Judge Langham noted in that post that Florida employers have been documented paying almost double for shoulder or knee surgery that is paid for under workers’ compensation, compared to group health costs.

The implication of case-shifting in Florida, he says, could arguably be a doubling of cost.

He cited a WCRI report released earlier this year that suggests however that case-shifting is perhaps not as likely in Florida.

According to the report, Judge Langham continues, “as of July 2011, six states had workers’ comp medical fee schedules with rates within 15% of Medicare rates. They were California, Massachusetts, Florida, North Carolina, New York and Hawaii.”

However, Judge Langham pointed out that the WCRI concluded that case-shifting is more likely in states where the workers’ compensation fee schedule is 20% or more above the group health rates, and not in Florida.

Judge Langham stated that this analysis of workers’ compensation fee schedules does not appear to include analysis of the reimbursement rates for hospitals, and that It also seems contradictory to the assertions that Florida workers’ compensation costs for various surgeries have been documented as roughly double the group health rates (100% higher, not 15% higher).

Injured workers who missed work in the Florida workers’ compensation system could be compensated in 2016 at a rate as high as $862.51 per week, the “maximum compensation rate.”

So, if recovery from such a “soft-tissue” injury required ten weeks off-work, he wrote, the case-shifting to workers’ compensation might add another four to nine thousand dollars to the already doubled cost of surgical repair under workers’ compensation.

This could be directly borne by the employer if the employer is self-insured for workers’ compensation; or, if the employer has purchased workers’ compensation insurance, the effect on the employer would be indirect in the form of potentially increased premium costs for workers’ compensation following such events and payments, Judge Langham states.

According to WCRI, the Judge quotes, “policymakers have always focused on the impact (workers’ compensation) fee schedules have on access to care as well as utilization of services.

This has been a two-part analysis, he says:

First, fee schedules have to be sufficient such that physicians are willing to provide care in the workers’ compensation system; and second, the reimbursement cannot be too high, or perhaps overutilization is encouraged.

Lastly, Judge Langham points out that the disparity between costs has also been noted in discussions of “medical tourism.”

The last question he posits is this, “might medical decision makers direct care to more efficient providers, across town, across state lines?”

What about national borders?


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.

Opt-Out A Boon to Employers, Not So Injured Workers

Employers opting out of workers’ comp in Texas are reducing costs, but more study is needed on how non-subscription affects injured workers, according to Stephanie Goldberg of Business Insurance.

Ms. Goldberg reports that a study released last week by Alison D. Morantz of Stanford Law School, found that the overall cost per claim is about 49% lower in the non-subscription environment, which is largely due to declines in medical and wage replacement costs.

The study also found, she writes, that despite no significant decline in frequency of claims, that more serious claims involving replacement of lost wages are about 33% less common among non-subscribing employers.

For the study, Ms. Goldberg adds, Ms. Morantz recruited 15 large multistate companies that operate homogenous facilities nationwide, and compared outcomes in traditional workers’ comp versus opt-out for each company from 1998 to 2010.

The study found also that the frequency of nontraumatic injuries declined about 47% with opt-out coverage.

It could be that nonsubscribers are better at screening out nontraumatic claims under one of the many exclusions that private plans typically contain,” said Ms. Morantz.

Meanwhile, Ms. Goldberg wrote, a nontraumatic injury that is covered may be denied if it is not reported by the end of the employee’s shift, or within 24 hours.

Thirteen of the fifteen employers in the study have “good cause” provisions that allow a claims administrator to determine if there was a good reason the claim was made late.

Finally, Ms. Morantz said that, “the biggest unanswered question is how these plans affect the welfare of workers.

As I reported yesterday in two posts, “Texas State House Seeks to Change Rules for Workers’ Comp” and “Workers’ Comp Opt-Out Goes Under US Microscope“, there are a lot of unanswered questions surrounding the effect opt-out will have on the injured worker.

Those who support opt-out expansion really don’t care about injured workers; they care about saving money for employers (i.e., profits that go back to the investors or to the top executives). They are also diametrically opposed to giving workers any benefits, and would prefer that workers’ comp had never existed, along with unemployment insurance and health insurance.

Those who see through the smoke and mirrors of opt-out know what the world was like before workers’ comp laws, and they don’t want to go back to those days, and whether or not they really are concerned with the welfare of workers, or just say they do, I am afraid that they may not be able to stop this move on the part of opt-out proponents.

But federal oversight would be welcomed to prevent going back to the bad old days before Triangle, which happened 105 years ago tomorrow. Marty McFly went back to the future, these guys in opt-out want to go back to the past.