Category Archives: Injured workers

On the Job Injury Costs Rising

Turning back to the original subject of this blog, workers’ comp issues, two articles this week discusses two recent reports that examine the issue of workplace safety.

The first article highlights the fact that despite a drop in the number of workplace injuries, the cost of those injuries and illnesses continues to rise, according to the 2018 Liberty Mutual Workplace Safety Index.

According to the Safety Index, the number of most serious injuries and illnesses fell by 1.5%, yet their cost, including medical and lost-wage payments, rose by 2.9% between the 2017 and 2018 reports.

Total cost of the most disabling work-related injuries was $58.5 billion, with the 10 leading causes accounting for $51.4 billion of the total, the Index reported.

An earlier post in this blog has discussed this issue before.

The top cause of workplace injuries, according to the Index, was overexertion, costing employers $13.7 billion in 2015. Falls on the same level came after that at a cost of $11.2 billion, while falls at a lower level cost another $5.9 billion.

Finally, rounding out the top five causes, were struck by object or equipment at $5.3 billion, and other exertions or bodily reactions at nearly $4.2 billon, the Index reported.

The second article discusses a report issued by the AFL-CIO on making workplaces safer. The report outlines the state of safety and health protections for American workers, and includes state and national information on workplace fatalities, injuries, illnesses, the number and frequency of workplace inspections, penalties, funding, staffing and public employee coverage under OSHA (Occupational Safety and Health Act). It also has information on mine safety and health.

A side note here: On Tuesday, the voters in West Virginia defeated Don Blankenship, the former Chairman and CEO of Massey Energy Company, who was convicted and spent a year in prison for his role in a mine safety disaster, who ran for the Republican nomination for US Senator. Blankenship not only ran a lackluster campaign, but engaged in calling Senate Majority Leader McConnell a few choice names, and attacked his wife and father-in-law because they are Chinese. He chose to use racist language to attack McConnell’s family,

But back to the issue at hand.

In 2016, there were 5,190 workplace deaths due to traumatic injuries, which was an increase over the 4,836 deaths reported in 2015. The rate of fatalities in 2016 also increased from 3.4 per 100,000 in 2015 to 3.6 per 100,000 in 2016.

Since Congress enacted the OSH Act, more than 579,000 workers can claim that their lives have been saved. But the article states that too many workers remain at serious risk of injury, illness or death as a result of chemical plant explosions, major fires, construction collapses, and other preventable tragedies. Add to that, workplace violence is increasing.

Key points to consider:

  • An average of 14 workers die because of job injuries; does not include death from occupational diseases, estimated to be 50,000 – 60,000 each year
  • In 2016, nearly 3.7 million workers across all industries, plus state and local governments, had work-related injuries and illnesses; 2.9 million reported by employers in private industry
  • Due to limitations on current reporting system, true toll is estimated to be two or three times greater, or 7.4 – 11.1 million injuries and illnesses a year
  • Cost of these injuries and illnesses estimated at $250 billion to $360 billion

Key takeaways:

  • During eight years of Obama administration, a strong track record on worker safety and health was achieved. Dedicated pro-worker advocates appointed to lead job safety agencies, increase budget for job safety, stepped up enforcement and strengthened workers’ rights, landmark legislation protecting workers from silica and coal dust issued, long-overdue rules on other serious safety and health hazards, including beryllium and confined space entry in construction industry introduced
  • Opposition by business groups and Republican-led Congress thwarted action on a number of initiatives, but at end of eight years, Obama administration put in place protections, policies, and programs that made jobs safer, reduced injuries and illnesses, and saved workers’ lives

Compare that to what the current anti-worker, pro-business fascist regime in Washington is doing to not only roll back the work of the Obama administration, but to undo all the safeguards and protections workers had fought and died for over the past century.

There is even consideration of looking at the child labor laws. Instead of draining the swamp, the head of this regime has nominated a coal industry executive to head the Mine Safety and Health Administration.

Folks, this gang of corporate criminals wants to make America great again by not moving forward, but by moving backward. They want to take the country back, alright — right back to the 19th century when businesses did whatever they wanted, workers had no rights, and if you got injured or ill on the job, it was too bad. Or maybe it was your fault. That was the verdict in the civil case against the two owners of the Triangle Shirtwaist Company, whose factory went up in flames in March 1911, and led to enactment of workers’ compensation laws and fire codes.

And the sad thing is, there are many business professionals who support and defend this regime and its leader, especially on social media sites like LinkedIn. They are not CEOs or Presidents of companies, although some maybe, albeit small ones. They do have executive titles at the managerial, supervisory or vice presidential levels. They are not informed about the struggles workers endured during the last century to gain those rights and protections. And until the labor movement, and the union leadership regains their rightful place as defenders of those rights, these actions will continue until they are gone forever.

 

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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.

Foreign-born, US-trained Physicians in Medical Travel vs US-born, Foreign-trained Physicians Practicing in the US and Foreign-born, Foreign-trained Physicians Practicing in the US

Those of you in the Workers’ Comp space have probably read my earlier posts extolling the benefits of medical travel, and promoting its implementation into workers’ comp.

Yet, in all those posts, hard evidence of the quality of care provided by physicians in these destinations was not presented.

However,  there is evidence that foreign trained, US  born doctors practicing in the US, provide as good as or better care than that provided by graduates of US medical schools, according to a recent study mentioned over the weekend in a post by Peter Rousmaniere, in his blog, Working Immigrants.

From this data, it may be possible to suggest that foreign-born doctors, trained in US schools provide the same good or better care than their American-born classmates, when they return to their home countries and work in medical travel facilities.

Before beginning to write this post, I tried to research some data on this, but was unable to find any recent information. However, it is well known that there are considerable numbers of foreign-born, US trained and Western trained physicians in medical travel facilities, which is one key factor in choosing to go abroad for medical care.

As Peter reported, among the 12.4 million workers in the health care field in 2015, 2.1 million, or 17% were foreign born. Of these, the foreign born accounted for 28% of the 910,000 physicians and surgeons practicing in the US. 24% of that number are in nursing, psychiatric and home health care.

How many of the foreign-born physicians trained in the US return home is not certain, but given the fact that many foreign born, foreign trained physicians have a hard time gaining access to practice in the US, it is not difficult to ascertain that those who do not enter the US end up working in their home country. In order to practice in the US, they must pass tests by a special commission and enter a residency program, even if they have done them before.

How many foreign trained, US born physicians practice in the US? According to Peter, about 25% of practicing physicians graduated from foreign medical schools. About a third of them are Americans. They are more likely, Peter says, to practice in rural and poorer communities, and are overrepresented in primary care. Given the physician shortage that I and others have commented on, there will be a need for more foreign-born doctors, and perhaps, more US trained, foreign-born doctors to work in medical travel facilities.

The Education Commission for Foreign Medical Graduates (ECFMG) gave roughly 10,000 certifications in 2015. 30.9% were issued to US citizens, 18.9% were issued to citizens of India and Pakistan, and 7.9% from Canada.

The states with the highest percentage of practicing physicians who graduated from foreign medical schools are New Jersey (40%), New York (38%), and Florida (35%).

Most of the New Jersey physicians no doubt practice in the Metropolitan New York Area, given the state’s proximity to NYC. And Florida has a large percentage given the demographics of that state.

So, if foreign-born, US trained physicians are ok for treating injured workers here, why can’t their fellow countrymen do the same back home if an injured worker, or his employer choose that as an option to expensive surgery at an American hospital?

Don’t tell me there is a difference, because there isn’t. It is only ignorance and prejudice that prevents foreign-born, US trained physicians from treating injured workers in medical travel facilities. That is another problem our health care and workers’ comp systems need to deal with.

Is this Right?

I just came across the following articles from KOB4 TV in Albuquerque, NM about  two police officers hurt on the job.

The former police officers from Corrales, NM,  Lou Golson and Jeremy Romero, were seriously injured when Golson was shot during a DWI stop in 2015, and Romero was injured when he was involved in a high-speed car chase in 2014. and told he would never walk again.

Officer Romero said he felt abandoned and betrayed by a system that should be protecting him. He says everything started going downhill when he started getting piles of medical bills.

Romero retained a lawyer because the surgeries he needs are not readily approved by workers’ comp.

According to Romero, ““I was immediately denied by my workman’s compensation, and therefore once I receive a denial it goes to the workman’s comp judge,… It will take anywhere from one to six months to see a workman’s comp judge on my complaint.”

On Jan. 3, 2015, Golson was shot four times at point-blank range.

This was just the beginning of an excruciating workers compensation battle. Golson said an adjuster refused to approve procedures he needed because of their costs, delaying care and prolonging time away from work.

This went on for years, the articles said,  with workers comp becoming increasingly suspicious that Golson was gaming the system with claims despite the clear evidence of his serious injuries. Finally, he said his adjuster made a comment he’ll never forget.

“‘Heh, you’re not hurt. You’re just old,'” Golson recalled.

Bills he expected to be covered were denied, Golson said.

“I let the collections people keep calling,” he said. “I never paid them, so as a result my credit was destroyed.”

Nearly three years since the shooting, Golson cannot get a loan. He said his family is financially ruined.

“It’s honestly pathetic that an officer who is willing to give his life — or she — who is hurt, devastatingly hurt, has to go through so much mental pain and agony dealing with a government that doesn’t care about them,” Golson said.

“And in my case, for my family’s sake, it probably should have been deadly,…They would be financially better off if I had died. But I didn’t, and that’s pathetic.”

Golson is advocating for reformed workers’ comp. Actually, both men deserve workers’ comp that actually works the way it was supposed to work, and not the way they have been treated by it.

There would be no need for reform if the system worked as it should, and if they could get the surgeries and treatments they need anywhere they wanted, even if that was out of state or out of the country.

This is just plain wrong. We hear about “Black Lives Matter” and all lives matter, but where is the work comp industry on this?

Workers’ Comp Medical Benefits Represent More Than Half of Employer Costs

The National Academy of Social Insurance (NASI) recently issued its 20th annual report on Workers’ Compensation: Benefits, Coverage, and Costs. The study provides estimates of workers’ compensation payments—cash and medical—for all 50 states, the District of Columbia, and federal programs providing workers’ compensation.

Much of the study, as reported today by Workers Comp Insider.com, deals with the decrease in benefits as a percentage of payroll, an issue outside the purview of this blog.

But I was intrigued by the graphic at the bottom, which stated that thirty-three states spent more than half their workers’ compensation benefits on medical costs for injured workers.

And the share of total costs of workers’ comp benefits that are medical costs rose from 1980 to 2015, from 29% to 50%.

WC Benefits

While the study does not provide any insight into what that 50% represents, it is conceivable to assume that a good part of it involves surgery to repair the injury the worker suffered.

So, if this study is right, then the only way to begin to bring down the medical costs in workers’ comp is to look at alternatives that as of yet have not been tried because of lack of will, or a belief that alternatives are not realistic, or because we still cling to the notion that our healthcare system is the best in the world. and no one else comes close.

As Puck said, “Lord, what fools these mortals be.”

A Deeper Dive into Medical Cost Rising for Lost-Time Claims

It is said, a picture is worth a thousand words, and I have ten pictures, courtesy of NCCI’s Barry Lipton’s presentation on that subject.

It was brought to my attention by my fellow blogger, James Moore, of J&L Risk Management Consultants. I met James back in February at the NCCI 2017 Data Education Program in West Palm Beach.

Mr. Lipton is the Senior Actuary and Practice Leader, and his presentation was called, “Medical Cost Trends Then and Now.

Yesterday’s posts regarding the slight increase in the average medical costs for lost-time claims only scratched the surface of the subject. I hope this post will dive deeper into it, so that we can see the whole picture.

In my first post from yesterday, “Slight Increase in Average Medical Costs for Lost-Time Claims, Part 1”, I discussed how physician costs and prescription drug costs impacted medical costs for lost-time claims.

On the issue of physician costs, Mr. Lipton showed that there was a decline in the 2015 medical payments per claim due to physician costs, but as the following chart proves, despite this decline, physician costs contribute a larger share of the total costs.

Chart 1.

Chart 6.

Source: NCCI Annual Issues Symposium 2017

According to James, the main reason for the reduction in costs is the physician utilization per claim. Even though it is only a3% reduction, it is significant, James says, in a time of upward spiraling medical costs. Chart 2 bears this out.

Chart 2.

Chart 7.

Source: NCCI Annual Issues Symposium 2017

The second part of my post yesterday, “Slight Increase in Average Medical Costs for Lost-Time Claims, Part 2”, looked at the steady rise of the average medical cost for lost-time claim.

If we compare the chart from yesterday’s post to the one Mr. Lipton presented, we will see that his chart does show increases and decreases over time in the average medical costs per lost-time claim, but my chart indicates that ever since 1995, it has been rising steady.

Both charts, do show that the average medical cost per lost-time claim is hovering around $30,000, and if the numbers are consistent with ones for earlier years, represents almost 60% of the total claims cost.

My Chart.

Chart 2.

Chart 3.

Chart 4.

Source: NCCI Annual Issues Symposium 2017

To examine this in greater detail, Mr. Lipton broke down the Accident Years into three separate periods and slides, to show the change in medical cost per lost-time claim. He compared the change in Personal Health Care (PHC) Spending per Capita with the Medical Cost per Lost-Time Claim.

In the period, 1995-2002, the average growth rate (AGR) for WC was 9%, and the AGR for PHC was 6%. In the next period, 2002-2009, WC AGR was 6%; PHC AGR was 5%, and finally, in the last period, 2009-2015, the WC AGR was 1%, while the PHC AGR was 3%, as seen in chart 4.

Chart 4.

Chart 10.

Source: NCCI Annual Issues Symposium 2017

To understand what was driving the decline in Accident Year 2015, Mr. Lipton identified six different drivers, as indicated in chart 5.

Chart 5.

Chart 8.

Source: NCCI Annual Issues Symposium 2017

Finally, Mr. Lipton discussed how hospital costs contributed to medical cost per lost-time claims by highlighting the difference between inpatient and outpatient costs, which are rising.

The following chart looks at the four years prior to the 2016 Accident Year, 2012-2015.

Chart 6.

Chart 9.

Source: NCCI Annual Issues Symposium 2017

In 2012, Hospital Inpatient Paid per Stay amounted to $19,514, in 2013, it rose to $22,944 (18% increase), in 2014, it was $24,558, or a 7% increase, and last, in 2015, it was $25,320, or 3% increase over the previous year.

As for Hospital Outpatient Paid per Visit, the number are considerably lower for each year when compared to Inpatient Stays, but nonetheless have been rising.

So perhaps this, at the end is why the average medical cost per lost-time claim has been rising over a period of over twenty years, from 1995 to 2015.

I wrote to James last night when I saw his recent posts on this presentation, and he responded that we are both correct in our analysis, but looking at it from different points of view.

My conclusion after reading this presentation and my discussion with James suggests to me that there are two things going on here. One, when a worker is injured and receives medical care, unless and until he or she goes to a hospital, the best way to lower costs is through what James calls one of his six keys to reducing workers’ comp costs. One of those keys is medical control by the employer, which James said reduced cost by 75%.

But I also realized that when an injured worker goes to the ER or an Ambulatory Service Center as an Outpatient, has an Inpatient stay, that this is where the medical costs go up.

Naturally, Workers’ Comp medical spending is only a fraction of the overall health care spend of the US, and as costs for health care in general rise, so too does costs in workers’ comp.

So, while many have argued or shown that they can lower costs on the front end, from time of injury to return to work for most claims where no surgery is required, one of the largest reasons for the steady rise in the average medical cost per lost-time claims is hospital costs.

On this, both James and I agree. However, it is important that many in the industry see this as well. Keep thinking that it will change by doing this or that has not worked, the numbers prove that. Maybe it is time for something out of the box.

Washington State Workers’ Comp Accepts Foreign Medical Providers

Seven years ago, when I was working on my MHA degree, I wrote a paper which has become the basis of this blog.

During that time, I found the website of the Department of Labor & Industries for Washington State, and was surprised to find landing pages that listed physicians in Canada, Mexico, and other countries. These countries were mentioned in my paper, and I have referred to it in subsequent posts from time to time.

However, in the period since, I have noticed that the landing page for other countries was removed. I contacted WA state a while back and was told they were updating it. Yet, as of recently, it is still not been replaced, so I contacted them again yesterday.

I received a reply from Cheryl D’Angelo-Gary, Health Services Analyst at the WA Department of Labor & Industries. She indicated in her response that she is the business owner of the Find a Doctor application (FAD).

According to Ms. D’Angelo-Gary, “our experience showed that most of Washington’s injured workers who leave the country travel to one of these adjacent nations. Workers who travel further afield are advised to work with their claim manager to locate (or likely recruit) a provider. All worker comp claims with overseas mailing addresses are handled by a team of claim managers who have some extra training to help the worker find a qualified provider.”

I asked her to clarify this statement further in my next email by asking if this means that any claimant who travels outside of North America will have to ask the claims manager to find them a doctor.

She replied, “interesting questions!” She also differentiated between an injured worker who is traveling versus one who has relocated out of country.

She went on to say that, “a worker who is traveling and needs claim-related care would be instructed to seek treatment at an ER or urgent care clinic, where the providers do not need to be part of our network and would not be providing ongoing treatment. To be paid, the provider would have to send us a bill and a completed non-network application (available online). Under no circumstances should the provider bill the worker.”

However, she continued, “a worker who has relocated overseas must send in a change of address (required whenever a worker moves). That allows us to transfer management of the claim to a unit that specializes in out-of-country claims. The claim manager would work with the injured worker to help the worker find somebody in their new location. It’s critical (per state law) that the worker choose their own provider, though the provider must meet our requirements and standards of care. Proactive workers tend to handle this well, and find a provider in very little time; less proactive workers can find this challenging. We’re currently looking at this process to see how we can do this better.”

And in final emails to her last night, I tied the first scenario to medical travel, and the second scenario to ex-pats living abroad, but needing medical care. I also asked about workers who wanted to travel back to their home country for medical care, and said that I write about medical travel for workers’ comp.

As of today, I have not heard back, but it is early, and there is a three-hour difference between us.

It must be pointed out that WA state is what is termed a ‘monopolistic state’ in that the state does all the work of handling workers’ comp insurance and claims. Thus, when Ms. D’Angelo-Gary says that worker must work with the claim manager, the claim manager in question is a state employee, and not an employee of a commercial insurance company.

It may be possible, therefore, for medical travel to be implemented in workers’ comp, and it should be something that the medical travel industry and the state should explore together. Ms. D’Angelo-Gary did say they were looking at this process to do better. What better way to improve the process then by utilizing medical travel?