Fortunately I'm the last speaker before lunch so I will have the attention of the audience because I will hold the key to their timely lunch break!
The issues I will be addressing are not foreign to those who read WorkCompCentral News or this blog. In order:
- Prescription drug abuse
- Pharmaceutical fee schedules
- Repackaged drugs and physician dispensing of drugs
- Financial health of the industry
- The economy
- and how Texas compares to the national trends
Honestly, there isn't any mystery as to what the current issues are that confront the industry nationally.
The difference is what various states and/or systems are doing to confront these various issues.
Texas is unique - not just because it is the only state where workers' compensation coverage is optional, or because it is one of the few states where the workers' compensation line has profitability, but because state laws mandate that system performance and "customer" satisfaction be measured and reported by the Department of Insurance.
The "report card" process involves measuring sometimes disputed performance criteria based on mandatory data reporting by carriers to come up with a basic grading system for insurance companies writing and adjusting the line. Results are published and one can drill down into the data used for the rankings to see specific performance measures. This ranking is intended to assist consumers of workers' compensation insurance products choose coverage and theoretically increase competition among carriers to boost overall system performance.
So how DOES Texas compare?
If you're a carrier then Texas is a good state to write business in. Compared to other states carriers in Texas have a very low combined ratio meaning that investments don't have to work as hard in order for carriers to experience profitability.
If you're an employer in Texas then the latest statistics available aren't bad as premiums follow the national trend of declining, record numbers of employers are participating in the system, and more workers who received temporary income benefits return to work within 6 months - how much all of this is actually due to the economy as opposed to actual system performance is up for debate.
If you're an injured worker in Texas the data is less clear because the report card process doesn't go to the injured worker - nor was it intended to do so by statute. So it is difficult to gauge Texas work comp performance from the worker perspective.
But the one universal trend that Texas can not claim superiority over other states is rising medical costs that outpace even the Medical Consumer Price Index rate of inflation. Texas faces the same issues that other work comp systems face - medical inflation that threatens work comp affordability.
I've opined before that I believe that the solution to the cost of medical inflation requires a different mind set and that rather than trying to control costs work comp should focus on trying to deliver value - and this is done by measuring outcomes versus the cost of delivery - there are methods that really smart people have figured out how to accomplish this task. See earlier posts.
The process of delivering value in the work comp system is not complicated, but it is labor and data intensive and requires a completely different way of looking at health care delivery and outcomes.
One way the Texas Department of Insurance may be able to improve its report card system is to take a look at how it can measure and report value - if Texas can do this it will be a model for the rest of the states that struggle with controlling costs while still delivering meaningful benefits to injured workers.
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