Suits And Ties

I'm not a very good businessman.

Sure, I have a Masters in Business Administration, but that just means I could read books and pass tests. That doesn't mean I know anything about business.

About all I really know about business could be summed up in a single sentence in my first finance class by Professor Daneise: "Cash is King."

That's it. Assets, liabilities, balance sheets, project management, financing, mergers, acquisitions - all foreign to me.

I'm a simple guy really. Have a dollar, spend ninety cents, and I get to keep the dime - that's my profit for intervening in some process or product that someone else wants.

Big business is mystifying. Scale - it's all about scale. A small transaction, that dime, turns into billions of dollars if there are enough units generating that dime.

Which is why, I believe, the workers' compensation space is attracting outside investment.

The trend started a few years ago and doesn't appear to be waning yet - health care consolidating and moving into workers' compensation.

The medical care world is talking about the purchase of Helios pharmacy benefit management company by UnitedHealth Group subsidiary OptumRx.

The transaction has been estimated to be valued in the one and a half billion dollar range.

That's quite a few dimes.

Rumors of talks between the companies had been reported by Bloomberg Business news service as early as last October. The deal was confirmed earlier this month.

Optum purportedly did about $67 billion in business last year, and Helios, formed just a couple of years ago through the merger of Progressive Medical and PMSI Group, had been owned by private equity owners, Kelso & Co. and Stone Point Capital. Obviously those equity groups made a wise investment.

I'd often thought that the logical step for group health was movement into workers' compensation, and that it would be this progression that would foster, ultimately, the consolidation of institutions: general health and workers' compensation.

I've heard all the arguments about why workers' compensation can not be a part of the overall health system in this country: health knows nothing of how to deal with disability (and I'd argue that work comp isn't much better, but that's another blog post...), there's not enough money in comp, the market sector is too small, group health has deductibles and other tools to regulate access while work comp is "first dollar," etc.

To me, none of the excuses or reasons why a universal health system for employed people present much of an obstacle.

Really, the only thing that is in the way of a "get hurt or sick and get treatment regardless of cause" type of system is just the law.

Workers' compensation was the first health care system, getting traction after the United States Supreme Court blessed it in 1917. There wasn't any medical insurance around until the Blues were taken to task for price fixing between hospitals, so they decided to become insurance instead in the 1950s. Medicare was right around the corner then too.

The two systems grew up independently because they were created, by law, independently at different times due to different facts and circumstances - certainly nothing that was logical. No one could have predicted when these institutions were created that they would become as big or as pervasive as they are now.

All of the major health companies now have occupational divisions: e.g. Anthem Blue Cross, Kaiser On the Job, etc.

If the law (i.e. our legislators) doesn't eliminate the medical silos that developed, business will. Consolidations, mergers, acquisitions - all of these will continue as the blend of work comp into the health sector moves towards a universal care system.

Henry Loubet, a former CEO of UnitedHealthcare’s Western operations and chief strategy officer at Keenan, told WorkCompCentral the Helios acquisition fits in with UnitedHealth’s strategy of diversifying outside of health insurance plans.

“They’ve been looking for a much broader reach,” said Loubet.

All health carriers are looking for a broader reach. The Affordable Care Act is pushing the growth in scale. Lots of observers think that there's bleed and shifting in services between group health and workers' compensation, though no one has yet to actually back up any claims one way or the other.

And those concerns may be irrelevant anyhow. I think that's what is really happening as the health market moves into work comp.

It really just comes down to a simple fact: sick or injured person needs care - who's going to pay?

Take the patient out of that question and everything else is a back room argument between suits and ties.

The Moving Fulcrum

When I started in the workers' compensation field, medical treatment requests needed only a physician's opinion that it was reasonable and necessary. Virtually anything that a doctor wanted for the injured worker was ...

That led, of course, to abuses, and a long line of injured workers who didn't get better, who didn't return to work, who incurred intractable disability and a few medical providers that benefited from the liberality financially.

Along came guidelines.

Guidelines were first introduced by the general health insurance industry to assist meting out treatment dollars. While efficacy was a paramount concern, the primary consideration for the medical insurance companies was controlling the outflow of dollars - prescriptions, if you will, for what would and wouldn't be paid.

The health carriers provided appeals processes, largely in response to federal mandates, to allow for exceptions where the standard treatment protocol wasn't effective but where a technique or service that hadn't yet been fully vetted could be implemented and investigated. If it worked, super, and if not, on to the next thing.

It took a couple of decades for guidelines to merge into workers' compensation. Now virtually every jurisdiction uses some form of medical guideline to regulate the administration of treatment.

This works most of the time for most people.

Some people fall outside the bell curve of guidelines, though. For those people the usual remedy is to find other evidence either not recognized by the guidelines in place or for which the guidelines had not yet been updated and then convincing someone up the appellate process that the evidence sufficiently supports the treatment attempt.

An interesting debate occurring in Oregon demonstrates the forces at work.

The Oregon Workers’ Compensation Division isn’t impressed with platelet-rich plasma injections despite evidence that professional athletes have used the therapy as a way to heal injuries faster and get back on the job sooner.

At least not yet.

WCD and is moving toward renewing a policy that the treatment is not compensable in workers' compensation claims.

Platelet-rich plasma ("PRP") injections take a sample of the patient’s own blood and process it to produce a concentrate of platelets, cells best known for their role in blood clotting. The platelet-rich plasma also contains growth factors that can help with healing, the theory goes. A doctor injects the PRP into the injury site, repeating the treatment every few weeks as needed.

According to an information page posted by the American Academy of Orthopaedic Surgeons, PRP has been found to be most effective in treatment of chronic tendon injuries, such as tennis elbow. Although more evidence is needed regarding the therapy’s effectiveness for other injuries, AAOS says risks of the procedure are about the same as for cortisone injections.

The Medical Advisory Committee subgroup of the Oregon WCD evaluated PRP treatment and proposed a recommendation that platelet-rich plasma injections should not be compensable, at least yet, because there is inadequate published scientific studies supporting its use.

The committee, however, leaves the door open to reevaluating the policy in the future since research on the injections is continuing.

What this really means is that the financial risk of paying for a relatively innocuous medical treatment service outweighs the probability of medical efficacy. Since workers' compensation is a "first dollar" medical benefit system (i.e. the patient in the vast majority of jurisdictions doesn't have a co-pay, deductible or any other financial participatory obligation) the party that actually pays (i.e. the employer/carrier) has a say as to whether or not it is willing to assume the efficacy risk.

Whether this is right or wrong in the privatized public benefit system of work comp can be debated endlessly. It just is the way it is, and is part of the deal.

While PRP holds "great promise," says AAOS, it also notes, "Few insurance plans, including workers' compensation plans, provide even partial reimbursement."

At some point, all of the studies on professional athletes using PRP will have sufficient correlations to determine whether, in fact, it is a beneficial treatment that should be provided via workers' compensation.

Until then, the fiduciary component of workers' compensation - watching where the money goes - will remain conservatively based. There will be some cases where the therapy is approved on an industrial basis when the physicians provide sufficient evidence and argument in favor of approval, and those cases will be studied too.

It's not a perfect system. And some folks will get denied treatment that could help them move on ... or not. 

Balancing the interests of those who pay, and those who receive, is inherently vague. The fulcrum is always moving.

Cost Shifting Nonsense

The Workers' Compensation Research Institute hosted a webinar yesterday about cost shifting to workers' compensation from general health. The premise was that due to the Affordable Care Act, there would be an increase in moving health claims into the workers' compensation system.

Richard Victor, who is retiring as president of WCRI, made the case that this shift trend is underway, based on research that looked at "capitated" health plans, namely from Health Maintenance Organizations.

A capitated plan is defined as a health plan that pays a flat fee for servicing patients; as opposed to a fee for service plan that pays per procedure. It was theorized by WCRI that capitated health plans would grow under the ACA so health carriers could control costs better, and consequently there would be an increase in shifting care to work comp.

A study (not by WCRI) back in 1996 had looked at federal ship yards, and the correlation between HMOs and workers' compensation - what that study found was a strong correlation between them: ship yards with an HMO, which were presumed to be capitated plans, were highly correlated with shifting care to workers' compensation.

But that's not the end of it - the type of "injury" being shifted was more responsible than simply providing care under capitated plans.

Look at the moon...

WCRI's research shows that if the injury claimed is a soft tissue injury that there was a greater likelihood that it would be treated under a work comp system than general health.

Victor said this was because the initial treating physician has the first, and consequently, disproportionately large role, in determining causation of an injury or complaint.

Specific trauma cases provide much less discretion in determining causation because an event was much easier to identify - thus lacerations and fractures aren't so easily recategorized than those requiring a more subjective analysis.

An inference was made by Victor, though there wasn't any hard data to support it, that workers' compensation's mostly fee for service reimbursement schedules influenced subjective determinations towards work comp - assuming that physicians and their teams were more motivated by money than health outcomes.

But blogger and principal of Health Strategy Associates pointed out that about 1/3d of HMOs don't use capitation for groups or individuals, or at least not for all services, so basing the research on HMO experience was not an apples to apples comparison, in his opinion.

Paduda also said that capitation has NOT grown under ACA, and presented some data to support that conclusion.

And in fact, Paduda challenged that physicians would be so motivated to move claims from general health to work comp because of the extra paper work, stating, "documentation that is perceived by physicians as irrelevant to patient care is the discontent of doctors - seems to me that's the definition of workers' comp."

Paduda also challenged the status quo view, and said he's not sure that any reverse shift DOESN'T occur (i.e. likely that there is cost shifting or case shifting going both ways).

Frankly, though, this is all academic.

It really doesn't matter and is a discussion that is relevant only to insurance companies seeking to eek out a better profit from their programs, because at the end of the day the employer is still paying for insurance, and employee is still trying to get treatment, and if one belongs in a certain silo or another is of relevance to the injured worker only in terms of deductibles, co-pays and indemnity (and even then, there may be an indemnity option under a state disability program such as in California or New York).

Cost shifting is pointing at the moon, and the dogs (us) looking at the finger instead of the moon.

There are only two real issues: is there an employer paying for medical care? is the employee getting medical care?

Whether that care is paid for via one system or another is irrelevant to the big picture.

Which brings me to another point - and that is whether universal care, or 24-hour care, or whatever you want to call it, will ever become available.

Both Victor and Paduda said "no" because powerful entrenched interests will never let go of their fiefdoms.

But this ignores the single most compelling prospect of the opt-out movement: consolidation of care.

Opt out can operate outside of the silos because it is not constricted by workers' compensation laws; it is governed by ERISA, a much broader system of governing employee benefits. I see the opt out movement as having an advantage to both employers, AND their workers, by providing medical care via a single platform.

Let the guys with white collars and ties in the back room argue about who's going to pay for what. The injured or unhealthy worker should not be concerned with who's going to pay for what - if the care is delivered quickly, timely, effectively - the vast majority of care recipients are going to be just fine with that.

Opt out has been the brunt of criticism the past couple of years with all sorts of legal challenges in Oklahoma, all sorts of anti-opt out lobbying in Tennessee and South Carolina, and public media reports that the promises of injured worker care are illusory.

I suspect proponents are actually listening and learning, and that modern offerings will refocus the discussion towards the bigger picture: an employer paying for the care of its workers regardless of causation.

Sure, universal care as a national, or even a state, program may not ever be realized because of the pesky, well positioned and entrenched special interests.

But when opt out comes to your state you can bet that plans will be a universal care model.

THAT's how single payer/universal/24-hour care (or whatever label you want to use) will creep into the modern economy.

That's my opinion. Ought to be yours!

Sam vs. Jane

The Workers' Compensation Research Institute's latest study essentially states that financial incentives influence treatment considerations - that capitated systems will cause a case shift away onto fee for service systems, like workers' compensation.

Sometimes those incentives get reversed too - and it's all about who's paying, and who's receiving.

The following comparison that was communicated to me by a reader is anecdotal for sure, but it is illustrative, and alarming. The only real difference in the quantity of similar medical treatment rendered is an elderly man via Medicare versus a middle age woman on workers' compensation. Guess who loses?

************

Sam vs. Jane

What a contrast Jane's situation with Sam's dad's situation. 

We can't get the rehab people to stop treating Same's dad (Medicare), versus Jane (workers' compensation) who can't get anyone to treat her. 

Sam's dad, 97,  fell 4 times a few months ago and now the rehab people won't quit. They stop by with questionnaires (all the same) but 3 people have to fill out the same forms. They treat him with occupational therapy 3X/day. He does not want occupational therapy. He's 97, he wants to sit in his chair and read and at 97 he's entitled to do that. 

Sam had several meetings telling them to stop the rehab. Then coming up in the elevator after the last meeting to again tell them - NO REHAB for at least 2 weeks.... when the elevator door opened on the 4th floor ..... guess who was standing there waiting to come downstairs -- the rehab woman!  

Sam politely asked her if she wasn't possibly at his father's apartment and sure enough she had been -- she'd stopped by to "say hi" even though less than 1 hour earlier Sam had had a 20 minute conversation with her and never uttered anything other than "No, we do NOT WANT REHAB."

Contrast to Jane who fell and has had to beg for care. And has had DOZENS of denials of care for her witnessed, admitted, injury.

The rehab woman for Sam's dad gets paid per treatment, and probably an incentive bonus when she treats over 50 times/week, or something.

By contrast, utilization review, the adjuster and the defense counsel get rewarded for refusing care. Defense counsel gets paid more for every hour he works the file to deny care. UR gets paid per review, and they know the expectation is to deny care. The adjuster doesn't really care since the employer has, no doubt, a large deductible policy and they still get their Allocated Loss Expense. The vendors are allowed to run wild.

Sam's dad is in a high quality, expensive facility with vendors that are ruling the roost, running wild providing unwanted treatments. He was an Colonel in Army, and a university Dean, but is now treated like an idiot by the rehab people.

Jane, on the other hand, has had to find her own care, pay for it herself (including the lodging necessary because the only facility she could afford was too far away for a normal commute) and eventually ran out of money, and options.

Anyway, it's interesting to watch the two different systems and how, in different ways, they mistreat those they serve.

************

While the WCRI was focused on case shifting into or away from workers' compensation, the real take away is further confirmation, reprehensible as it is, that providers of medical care (and those responsible for managing them) will go where the dollars are, and unfortunately that's not always in the best interests of the patient or injured worker.

Business, after all, is business...

Change The Ride

I flew home anxious from the Summer California Applicants' Attorneys Association conference in Las Vegas Saturday; there were some tasty aftermarket parts to install on The Sewing Machine!

TSM is a 2011 Honda CBR250R. I bought it from a friend about 18 months ago with only 281 miles on it for a paltry $2,900. How could I go wrong?

All motorcycle owners modify and customize their machines. It's inherent in the gear-head mentality. It can't be helped - motorcyclists have an affliction called Compulsive Modification Disorder.

So I rode the heck out of it, resisting the CMD (though barely) until it was time to replace the tires at about 3,500 miles. I wanted to get a feel for the bike, understand its characteristics, and also understand what mission it would be fit for me.

Honda designed the CBR250R as a sporty beginner's bike, but in truth it has much more sport in it than beginner, particularly if you've been owning and riding bikes as long as me.

What I discovered was probably the PERFECT Malibu canyon carving bike. With only 24 rated horsepower this bike isn't passing anyone unless it's a really tight corner, but with only 320 soaking wet pounds to throw around there aren't too many bikes that can stay with it in the corners, except for bicycles - and they can't keep speed up hill!

The weekend before I had already installed some excellent Bridgestone Battleax BT 090 radial tires to replace the trashed stock IRC rubber. Waiting for me in the garage upon return from CAAA were a set of Woodcrafter Racing clip on handlebars (1.5 inches lower than stock) and rearset foot pegs from Yoshimura Racing that put the foot controls 40mm rearward and 30mm higher than stock.

Then I went riding on Sunday afternoon.

Yahoo!!

I had a different bike. Wow. An already competent canyon carver turned into a cornering cue ball. The confidence of the sticky tires in combination with the new riding position put more smiles per miles on my face than ever; and this bike had already attained status as one of my all time favorites in 45 years of riding.

Just a couple of minor, and inexpensive, tweaks, and the entire character of the bike, and the grin on my face, changed in huge proportions. I'm glad I waited to find out what I had, what I needed, and what was available before throwing solutions onto something that I didn't understand.

Which brings me to the CAAA convention.

The Sewing Machine when it was "new".

There was, unfortunately, a recurring theme with everyone that I talked to there - and that included attorneys (both sides), doctors and vendors: Injured workers' medical care continues to be delayed and/or denied for no logical reason.

Remember the statistics from the Workers' Compensation Insurance Rating Bureau's annual meeting just a few weeks ago? Dave Bellusci, the Bureau's Chief Actuarial, showed us that California leads the nation, by a long shot, in delayed care. And that delayed care equated to costs that were oodles above the rest of the nation directly and indirectly.

That unfortunate statistic was born out by the anecdotal evidence I encountered at CAAA; whomever I talked to had the same basic story - there is a real problem getting doctors to treat workers' compensation patients.

Eventually some treatment occurs at some level, but the amount of delay and procedural interference in getting to a treatment status is causing a huge increase in compensable consequences (and some consequences that aren't compensable, at least in the eyes of the insurance industry).

One story that seemed to represent that common theme was of an injured worker that had been receiving consistent medical care for years. Same medication, same procedures, same everything. All had been authorized, all had been paid for, all was dependably provided.

The treating physician then retires. A new physician, not as adept at comp as the original treating doctor, takes over the case and prescribes the same treatment as before, albeit not as skillfully, negating some documentation or some other minor defect.

The request goes to Utilization Review and gets denied.

During the time period of the UR procedure applicant's attorney notes the defect in the treatment request, and asks the doctor to correct it. He does, it gets submitted, and that passes UR.

On the day that UR approves the second request (remember, this is for the same procedure as the first), a denial is issued from UR for that first defective request.

Now comes the galling part - the claims adjuster assigns the matter out to defense counsel to contest the treatment request.

ARE YOU FRIGGIN KIDDING ME?!

So now, not only does the injured worker NOT get the treatment that he has been receiving as authorized treatment during the entire pendancy of his claim, but his attorney has to go to court to get the treatment authorized.

Folks - that's just plain wrong. If that adjuster were under my supervision, he'd be no longer. That's what I call in my rough manner, A-hole Adjusting. There's no reason for that behavior, and there's no excuse.

Yet I heard tale after tale of similar stories while at the CAAA conference, from attorneys, from doctors, from other vendors.

There seem to be several underlying reasons for this malevolent behavior.

First off, UR seems to be cook book programmed. I don't know whether this is true, but from the evidence I have to assume that there are computer algorithms out there that dictate what the UR decision is without any human intervention, and if any element is missing from that algorithm then denial occurs.

Second, and related, claims has increasingly been taken out of human decision making. The logic has been ascribed to computers that can not connect endpoints if a dot is missing.

Third, the old guard medical providers aren't adapting well. The old saying, "you can't teach an old dog new tricks" has some truth to it. They just can't adjust to this new paradigm of medical treatment review and authorization.

Fourth, the new medical professional is of the Millennial Age - they don't have the patience for this BS. If it's not a push button system then it isn't going to be in the treatment arsenal. And they're certainly not going to put up with multiple levels of review without compensation for the effort.

The doctors that are left, and who are doing it right, still won't see a patient if the claim is older than six months. I had one doctor specifically tell me that - the reason: she doesn't get paid to review volumes of medical records to figure out what is going on. So she just doesn't take on any patients with dates of injury more than six months prior to appointment.

Oh, and there has to be prior approval on procedure and cost before committing to that patient.

So as a consequence there really is a medical access problem! There are doctors. But the patients can't get to them. And when the patients actually do get to a physician the delays in treatment approval are ridiculously lengthy.

Here's what's going on - injured workers, bottom line, aren't getting the medical treatment they should, and as a consequence the vast majority of EMPLOYER'S costs (those that participate in the the insured market) are going up.

SB 863 was a radical reform. SB 899 was a radical reform. Both occurred just a few years from each other. Both were supposed to reel in costs while providing better benefits to injured workers. Both have not succeeded in that mission, in my humble, albeit anecdotal view point (with some quantitative support from the industry).

Instead of waiting for the tires to wear down, and to understand the character of what we have and our mission, we changed everything. And now we're finding out that there are attributes that aren't so savory.

You might argue that my sampling is a small cross-section of claims that is overrepresented because I was talking to litigators. But the truth is that if the injured worker were treated quickly, efficiently, and without unnecessary interference from procedure and process, then most of those litigators would not be telling me these tales.

The system pushes claimants to attorneys, who still can't help their clients. The cards are stacked, and in the wrong direction.

All of us, every single one of us, will ultimately act in accordance with what is in our own best interests. If the law provides a system where an insurance company can save money on a claim then that is what the carrier is going to do. If the system promotes excessive disability to determine compensation, then that's what will happen.

The next modification to TSM is some front suspension tuning. I now understand that how and where I ride my bike overtaxes the forks; they are both underdamped, and under-sprung.

California workers' compensation is both OVER-damped, and OVER-sprung. But I don't think we need more radical solutions.

We've ridden the machine now for nearly 3 years. We know what needs to be done.

But it will take everyone to set aside their own, personal, self-interests.

MPN Means Managed

Medical Provider Networks, introduced into the California workers' compensation system around 2003, are one form of managed care.

The purpose of MPNs was to reduce medical treatment costs.

But like anything "managed," success depends upon the actual management.

In particular management for the right reasons.

In the case of MPNs in workers' compensation, management just to reduce medical costs isn't a sufficient end goal because the medical component of workers' compensation affects all of the other components such as disability, indemnity, return to work, etc.

The California Workers' Compensation Institute has just released a report on MPNs that essentially concludes that well managed MPNs work, and those that aren't, don't.

Image from Total Managed Care, Inc.

The study reviewed claims pre-MPN (the Preferred Provider Organization model period), the period of transition around 2003-04, and then the period when full MPN implementation was realized (Accident Year 2009 and beyond).

In summary the researchers found:

• Overall, network utilization increased from 55.4 percent in the PPO model period (AY 2000 – AY 2002) to 79.5 percent in the full MPN period (AY 2009 – June AY 2011), while for indemnity claims it more than tripled from 24.4 percent to 77.2 percent.

• The proportion of all network claims with attorney involvement increased from 12.2 percent in the PPO period to 17.4 percent in the full MPN period.

• The claim closure rate for network claims measured at 12 months post-injury decreased from 72.7 percent in the PPO period to 61.2 percent in the full MPN period.

• The percentage of network claims with at least one opioid prescription increased from 39.1 percent in the PPO period to 54.5 percent in the full MPN period.

• Differences in average risk-adjusted medical payments between network and non-network claims varied greatly by region, ranging from no difference in Los Angeles County to a 20 percent difference in San Diego County in the full MPN period.

• Average risk-adjusted medical payments on indemnity claims at 24 months post injury were 16 percent less for network claims than for non-network claims in the PPO period, but were only 3 percent less in the full MPN period. 

• Average risk-adjusted medical payments on indemnity claims with attorney involvement were 14 percent less for network claims than non-network claims in the PPO period, but were 2 percent more in the full MPN period.

• Average risk-adjusted medical payments on network claims with opioids were 16 percent less for network claims than non-network claims in the PPO period, but were 20 percent less in the full MPN period.

So, while the use of networks to medically manage treatment of work-related injuries has fulfilled the legislative intent to encourage network use (which increased from 55 percent of work injuries prior to MPN implementation to 80 percent in the fully implemented MPN period), over time the MPNs has not lowered the cost of medical care.

But this is on an overall model assessment. The researchers point out that there was considerable variation across the individual MPNs sampled, and that just as many networks had lower cost per claim outcomes as higher cost per claim outcomes.

What seemed to affect many MPNs are access requirements controlled by law and regulation - the more geographically diverse MPNs have a more difficult time fulfilling those mandates, and, ergo, experience greater diversity in outcomes.

In other words, the success of any one single MPN is highly dependent on how well managed it is - cutting medical treatment payments is not, and can not be, the sole reason for an MPN. Other outcomes need to be considered when a claims payer goes shopping, or decides to create their own, MPN.

This is evident in the findings that claim closure rates with MPNs takes longer, and that opioid prescription was higher - these are findings that are contradictory to good claims management and positive outcomes.

CWCI's Research Note, “PPO to MPN: Impact of Physician Networks in the California Workers’ Compensation System,” is available to members and subscribers in the Research section of the CWCI website.

WorkCompCentral will have a more detailed story on the report, with commentary, in the coming days.

Another Quake

I've been of the opinion lately that workers' compensation in 10 years is going to look much different than it does now, if it is even in existence as "workers' compensation."

A bill just introduced into the California legislature would take huge steps towards that vision by creating a "24 hour care" model for agricultural workers.

Assembly Bill 1170, by Assemblyman Luis Alejo, D-Salinas, would create the Care of Agricultural Workers Fund, financed by assessments on agricultural businesses based on the number of workers they employ and the total amount paid for workers' compensation medical costs for agricultural workers.

A primary motivation for the bill is to give agricultural employers a way to comply with the Affordable Care Act's requirements to avoid penalties.

Under the federal ACA, which became law in 2010, employers with 50 or more full-time employees, or a combination of full- and part-time employees that the Internal Revenue Service determines to be the equivalent of 50 full-time employees, can be subject to penalties for not making affordable health care available to their workers. The penalty provisions went into effect at the start of the year.

There are 2.8 million undocumented workers in the agricultural industry in California. They are not eligible for benefits under the ACA nor can they purchase health care from Covered California, the state-run health exchange established under the act.

Manuel Cunha, Jr., president of the Nisei Farmers League, the agricultural trade association that is sponsoring the bill, told WorkCompCentral the idea would be to have coverage that is at least as comprehensive as what is offered through Covered California for workers who "may have a document problem."

He said undocumented workers can't purchase coverage from a private carrier because they'd be required to provide a Social Security number and other information that could result in the carrier providing the employer with "constructive, actual knowledge" that the worker is in the country illegally, ultimately resulting in termination of the worker.

The bill does not state how to determine whether medical care is needed on an industrial basis or for other reasons. The methodology is left to the administration by the Division of Workers' Compensation.

DWC would be responsible for making assessments on agricultural businesses based on the number of workers they employ and the total amount paid for workers' compensation medical costs for agricultural workers.

DWC would then contract with one licensed health care service plan to be the exclusive provider of medical, surgical and hospital treatment for occupational and non-occupational injuries and illnesses incurred by its agricultural workers.

The bill further provides, "The health care service plan shall provide all occupational-related medical treatment coverage required by this division without any payment by the employees of deductibles, co-payments or any share of the premium."

But AB 1170 says nothing about whether the worker would be subject to a copay or deductible for non-occupational care. So there may still be an issue of "AOE/COE."

The bill would also require agricultural employers to make coverage available to workers' dependents, but would not obligate them to pay for that coverage.

Pacific Bell (before it became Verizon) ran a similar pilot program in 1996 and 1997. According to San Francisco-based Integrated Benefits Institute, the pilot reduced average medical costs by 21% and temporary disability costs by 41%.

Cunha told WorkCompCentral the plan is to provide coverage without a copay or deductible, but that will ultimately depend on how much it costs to put together a program that meets ACA requirements. There will be no cost of treatment of occupational conditions, but if the costs of the plan exceed the industry's total workers' compensation payments, the idea of deductibles or payroll deductions "might be an item of discussion."

There are many other unanswered questions for sure (not the least of which is how to deal with indemnity issues), and the success of getting the bill through the legislature and to the governor's desk is far from certain.

AB 1170 can't be scheduled for a policy committee hearing until 30 days after it was introduced. Alejo introduced the measure Feb. 27.

"24 hour care" has been explored before. There was a version that made its way through political circles during the Schwarzenegger Administration for workers enrolled in California Public Employee Retirement System, but ultimately died.

Still, the California Commission on Health and Safety and Workers' Compensation in conjunction with the University of California, Berkeley, managed that pilot project involving Service Employees International Union Local 1877, janitorial employer DMS Facility Services and Kaiser Permanente.

Their conclusion in 2008: the extent of integration is a significant factor when it comes to reducing costs and improving quality of care, but that lower medical costs and lesser disability is experienced the greater the integration.

How far will this go? I don't know.

It's estimated that the agricultural industry in California is $37 billion big, so there's some lobbying muscle available.

It's quite possible that this is a quake in the overall Seismic Shift that is going to shake the industry over time.

Cost of Being Society

I haven't yet checked into the Workers' Compensation Research Institute's annual conference in Boston this morning, but I'm sure the attendees will have the latest scathing reports about workers' compensation published by ProPublica and the other by the federal Occupational Safety and Health Administration on their minds and in their conversations.

Though both were released yesterday (the ProPublica is the first in series), the two publications were not coordinated, according to the lead author of the ProPublica article, Michael Grabell.

Yet, they both come to the same basic conclusion - workers' compensation nearly universally throughout the United States fails in its basic stated mission too often, and consequently is pushing the cost of taking care of injured workers onto governmental benefit systems, ergo costing the general tax paying public to take up the slack - according to OSHA, a lot of slack:

"Changes in state based workers’ compensation insurance programs have made it increasingly difficult for injured workers to receive the full benefits (including adequate wage replacement payments and coverage for medical expenses) to which they are entitled. Employers now provide only a small percentage (about 20%) of the overall financial cost of workplace injuries and illnesses through workers’ compensation. This cost-shift has forced injured workers, their families and taxpayers to subsidize the vast majority of the lost income and medical care costs generated by these conditions."

Wow, that's a strong statement, and perhaps that conclusion is erroneous in the gross amount that the public is actually picking up, but nevertheless, even if that amount is half what the government says then it is too much.

But, are these reports an attack on workers' compensation, or do they reflect something deeper, something more problematic, something more complex?

The truth, in my mind, is that ProPublica and OSHA are both evidence that not only have the times changed, but that more change is necessary, on a much grander scale.

When looked at as a silo, the deep vertical we know as workers' compensation may be problematic. After all, these reports say that state legislatures have trimmed so much from work comp programs, have excluded so many types of injuries or illnesses from coverage, and have imposed so much regulatory burden, that while costs have been fairly well contained as measured by the work comp industry and the governmental bodies that regulate it, the ultimate beneficiaries - injured workers - bear an unreasonable burden.

Lives and families in the cases that fall outside the bell curve of medical only or limited indemnity claims are ruined, human dignity thrown aside, resulting in broken people, broken relationships, broken families - plights that none of us would want on our mothers, let alone ourselves.

Okay, so let's assume that workers' compensation is the bogey man. And let's assume that the industry's relentless drive to reduce the cost of taking care of injured workers is behind this shift in costs onto the general public.

This doesn't mean that workers' compensation itself is bad, broken or defunct. The system is a reflection of the laws that create it - remember that workers' compensation is a complete fiction, a product of politics, a system of statutory law and regulation that has no basis in common law, no deep tie to culture beyond the late 1800s.

Workers' compensation, as many have picked up from this blog in the past, is simply a reflection of society. It is a microcosm of what is good, bad and ugly in our overall function as a "civilized" nation.

The fact of the matter is that these two publications actually tell us that our entire system of taking care of people, regardless of social program, be it public or private, is completely deficient.

The cost of workers' compensation, after filtering through the insurance company to the employer and ultimately to the consumer in the price of the cost of goods or services, is borne by all of us - the general public.

The cost of public social services, whether it is Social Security, Medicare, state disability or government sponsored health plans, is after all is said and done, borne by all of us - the general public.

We can look at what the cost of providing goods and services is in workers' compensation, but that continues the silo view of taking care of those who can no longer do so.

The truth of the matter is that workers' compensation itself is not the problem. The truth is that our system of laws and regulations, as they have evolved over the past 100 years, and in particular the past 30 years, has contributed to the tension between "haves" and "have nots" to the point that we may be on the cusp of another social revolution.

What's missing from politician's big picture view is that every injured worker who is not making wages at or near the level they were when working can not buy goods and services, and when people can not buy goods and services the overall economy is harmed.

So what these reports REALLY tell us is that a whole new way of thinking about how to provide for people who can't provide for themselves needs to be discussed, needs to be studied, and needs to be changed.

I'm a very fortunate "have." That was very poignantly made to me when the line man, Rob, at my airport was fueling 41M the other day and I was whining about my work schedule or making some other stupid comment. Rob reminded me that he was putting fuel into MY AIRPLANE, that I had achieved a level of success that most would envy, and that I got to work my schedule.

That last point had the most impact - I was working. Not only working, but making money doing my own thing.

In other words, I'm archetypical. I'm not the average working person getting by day to day ... fueling airplanes for a living.

If Rob got hurt at work and had to miss his paycheck for an extended period of time, he'd be SOL, so to speak.

There are lots of Robs out there.

The theme of the WCRI conference this year is "Resilience or Renovation" and many of the lectures ultimately have to do with costs.

And that's fine and dandy for the silo of workers' compensation to talk about.

But eventually there are only two outcomes for a full silo: the product in the silo gets drained away, or it rots.

I think that's where workers' compensation is at in its evolution on the grand social scale. We can talk about costs. We can talk about impact on society. We can talk about the broken workers. We can talk about the profiteering vendors.

Or we can talk about how the laws of this great nation need to change once more so that all of the social care silos are broken down, so that there is a seamless system to take care of those who can't take care of themselves, so that there is an integration of services and benefits without blame or fault.

Perhaps its true that the cost of workers' compensation is shifted onto other public programs, and we know there are way too many people left in desperate situations as a consequence of work injuries (and other unfortunate occasions in life).

Ultimately we all pay for it one way or the other. The monocular view of workers' compensation needs to be stereoptic - we live in a three dimensional world. Work comp is only one small part of the bigger picture.

The conversation needs to change. It's not about the cost to or of workers' compensation.

It's about the cost of being a society.

Perhaps ProPublica and OSHA will foster that change.

Why It Is The Way It Is

A couple of weeks ago Joe Paduda in his Managed Care Matters blog posted that there was a suspicious upcoding of physical therapists billings by some networks using the "59 modifier."

It seems there are some medical networks that are adding the 59 code to bills without a) telling the actual provider of the services, and b) automatically and systematically without supporting documentation.

And they have been getting away with it.

Paduda states that there is a concerning lack of appreciation for what this means - the actual providers, the physical therapists, aren't too concerned as long as they get paid, despite the fact that someone or some entity is modifying their billing without their knowledge against professional protocol.

The modifier is typically used when two procedures are used on the same patient within 15 minutes. In some cases, those services would be bundled together and reimbursed as one item. But for others, the provider appends the number 59 to the code to indicate that they should be reimbursed separately.

Paduda, a principal in the firm Health Strategy Associates, says that some of his clients have seen modifiers on more than 40 percent of their bills, but also notes that there is some official documentation floating around that indicates that the 59 modifier shouldn't be seen on more than 10% of the bills.

Something is amiss.

"I think I'll take a mile..."

One commentator to Paduda's blog post states, "I am in CA and this is on my radar. I am concerned. Several of my colleagues can confirm what you are saying is 100% true. I have seen the smoking gun. In this case, the gun is still red hot and has not come even close to cooling down. The gig is up…"

What is the gig?

The motivation on the part of the networks and the third party administrators they are tied to, it seems, goes to their marketing and reimbursement practices whereby the TPA gets a percentage of billings saved.

Inflating bills creates the illusion that the network is saving payers more than it actually is. Because a network might reimburse for 80% of a bill, it would show the payer that it saved $20 off a $100 bill for physical therapy. But if the bill was $120 because of a 59 modifier, the network would report to the payer that it saved $24.

In an interview with WorkCompCentral, Paduda wouldn't identify who is doing what, and clearly these bad apples are the exception.

And it comes down to transparency, which is tied to the number of entities through which a bill is passed until payment is rendered.

“The only way we could show that this has been done is if we were able to get the bill that was sent on to the third-party administrator or the employer and compare it to what we've originally sent in,” Jeffrey Hathaway, president of the Physical Therapy Business Alliance, told WorkCompCentral. “So there's no transparency. We have no idea what the network is getting paid, we have no idea what the network is telling the third-party administrator.”

So, once again, give someone an inch and they'll take a mile - which is exactly why work comp is the way it is today: because people can't behave themselves without someone overlooking them with baseball bat in hand to keep things in check.

You don't have to wonder why work comp is the way it is. Just open your eyes (ears and wallets).

Ebola and Work Comp

As the Ebola scare was developing there was speculation about the applicability of workers' compensation to such cases.

Now that 2 nurses have contracted the disease from occupational exposure the debate is not about AOE/COE, but how far this is going to go.

The first nurse, identified several days ago by friends and family as Nina Pham, was in “clinically stable” condition, and in isolation at Dallas’ Texas Health Presbyterian Hospital, where she helped treat another Ebola patient, Thomas Eric Duncan.

We now have two nurses who have Ebola.

The second health care worker also cared for Duncan and was immediately isolated at Texas Health Presbyterian Hospital, the Texas Department of State Health Services said in a statement.

“Health officials have interviewed the latest patient to quickly identify any contacts or potential exposures, and those people will be monitored,” the department said.

This second nurse case apparently traveled back and forth from Cleveland, Ohio before showing symptoms, which officials say indicates she likely was not contagious at that time, but nevertheless precautions are being taken to reduce the risk of transmission to others, such as taking one of the planes out of service and contacting all passengers and crew members.

A total of 78 healthcare providers at the hospital treated Duncan. Up to 48 other persons were exposed to Duncan.

I read a commentary a couple of days back that basically concluded that there was no workers' compensation risk from Ebola because a disease, to be compensable, must be a unique exposure for a worker - the author comparing Ebola to the flu.

Ebola, is far, far different than the flu because it is basically fatal; the flu might be fatal but more often than not one just feels lousy. The fatality rate in the current Ebola outbreak, however, is about 70 percent according to reports.

Health care workers, medical waste workers, indeed, any person involved in the business of medical care is uniquely exposed.

“It’s really concerning that health workers wearing full personal protective equipment have developed Ebola,” said Raina MacIntyre, a professor of infectious diseases epidemiology at the University of New South Wales in Sydney in a Reuter's report yesterday.

But is the workers' compensation system ready to deal with Ebola? And I don't mean from a claim severity or frequency standpoint.

I mean from the point of providing quality medical care in such a specialized situation - because there aren't too many medical professionals, or facilities (as demonstrated by infectious disease handling failures at Texas Health Presbyterian Hospital) that are trained, have adequate protocol (indeed even the Centers for Disease Control has been rapidly changing guidelines as this situation unfolds), or have the equipment to deal with this disease; ergo, this is a disease for which there likely is no fee schedule, likely no good treatment guidelines, likely nothing to give claim departments any guidance whatsoever.

Workers' compensation medical treatment has devolved into fights about utilization and other reviews which ultimately delays (though it's not supposed to) the delivery of care, if not outright denial of care; but dealing with Ebola requires immediate action. There is no time for utilization review or independent medical review. Protocol is lacking, and risk of spreading the disease increases exponentially with every single contact.

And forget about workers' compensation - the entire medical delivery system is proving incapable of dealing with the disease, from the CDC on down.

We will likely see more Ebola cases from among the other healthcare providers who treated Duncan.

I worry about the spouses and children of the healthcare providers.

I also worry about Ebola spreading to schools in the event one or more of the children on the hospital staff contract the disease.

More than 8,900 people have been infected with Ebola in the three countries, with more than 4,400 deaths, the World Health Organization said. The number of new Ebola cases in three West African nations may jump to between 5,000 and 10,000 a week by Dec. 1 as the deadly viral infection spreads, the WHO said.

There’s no cure for Ebola, which jumps to humans from animals such as fruit bats and chimpanzees. The virus spreads from contact with bodily fluids such as blood, vomit and feces.

If ever there was a situation where there should be no distinction between workers' compensation medical treatment and general health, the current Ebola situation is it. Delivery of medical care in workers' compensation is just fine for broken bones, even for something like black lung disease.

The way medical care in workers' compensation is delivered creates a real, and significant, national health problem when confronted with a potential pandemic like Ebola.

Work comp is woefully, in fact dangerously, inadequate for something as radical as Ebola.

Get On Your Bike and Ride

Yesterday, after posting about mental health and its importance to the overall workers' compensation claims process I went for my morning bicycle ride.

Those of you who know me, or who have followed me for a while, know that I'm obsessed with cycling. I don't "follow" the sport like most sports aficionados because I can't sit long enough to "watch" anything, but I like to ride.

I have always been that way - I'm one of those "doers" - and I've been "doing" pretty much anything related to 2 wheels since I could ride without training wheels.

That also means that I have had more experience with the downside of two wheels than most people - aka crashing, or at least falling.

That's just a part of life on two wheels; eventually you WILL go down. Hopefully it is not that traumatic of an event, but it is a fall, and it does hurt.

I'm also fortunate (or maybe not) to have a very high tolerance for pain. Pain doesn't affect me as much as most people. Yep, things still hurt when I'm stupid and fall off my bicycle, but for the most part I just pick myself up, utter a few curse words, try to wipe up the blood as well as possible, and carry on.

Sometimes, like when I ended up in intensive care for a week due to a host of serious internal injuries after a particularly bad get-off, I endure a bit more pain than normal. In those situations it's just my body telling me that, yep, it really IS bad this time! I was thankful for the Demerol drip that time...

But for the  most part injuries are just part of my life. Which means pain is also just a part of my life.

Bowzer crashed into a wall, but dealt with the pain.

My wife can't tolerate any pain. She is a s frail a flower as I know. She complains of the slightest discomfort. Any minor bruise, burn or laceration causes her great irritation and misery.

The sight of blood terrifies my wife and she goes into shock - like the time I was riding "trials" on the rock jetty in front of my house on my mountain bike a few years back. I missed a step and got gored in the leg by a piece of rebar. Blood was spurting everywhere and of course I knew I needed stitches (and a tetanus shot), but my wife was so overwhelmed by the sight of blood that she couldn't drive me to the emergency room - she had to sit shot gun while I operated the throttle and brake with my left foot.

What is it that makes some people so resilient and able to deal with adversity, pain and suffering only to come back better, stronger and ready to take on more?

And others who can't tolerate nearly any pain or get set back by seemingly minor issues?

I was reminded of this yesterday after, serendipitously, posting about mental health. Took a little spill on my bicycle after only about seven or eight miles of what I had planned to be about a fifty mile ride.

The worst part is that I wasn't even going fast, which made me mad - there's nothing worse than an active person sustaining injuries in a relatively non-active way...

After picking myself up off the pavement I assessed my injuries: blood gushing from my right hand, blood all over my left calf and thigh, left shoulder abraded but thankfully no damage to the new cycling jersey I was wearing.

I hosed myself off with the water bottle, cursed a whole bunch for being stupid, saw that blood was spurting out everywhere ... and got on and rode to complete that fifty miles.

The injuries sort of hurt - I mean, lacerations, abrasions and contusions eventually induce some pain. But what I noticed most is that the cut on my right thumb wouldn't stop ejecting blood and that damned red stuff was getting all over everything.

To my compulsive way of thinking this was a huge inconvenience. I had a mission - complete my ride! But blood was getting in the way of that mission.

I was reminded of the time I went windsurfing in some big surf before work one day, ended up "biting" the sail boom on my first tack out through the waves and spit out my broken front tooth. Most rational people would call it a day, head back to shore and get an emergency dental appointment.

Not me! No sirree ... give up premium wave sailing just because of a broken tooth, cut lip, and enough blood to attract an entire school of sharks?!

And so it was with my thumb ... what do I have on me that I could tourniquet that thumb so I can complete my ride? Sunglass bag in my pocket! Wrapped it up, tied it up, thumb throbbed and wasn't much good for griping the handlebars, but I could still ride.

In the good old days when I was less tolerant of others I could not understand why some injured workers couldn't just wrap it up and still ride. I didn't have any compassion for those people who were unable to overcome a little pain and discomfort.

I've matured now, and understand that a lot of people can't tolerate pain like I can. And that's just part of the mental profile of being human - the variance in which we perceive and deal with pain is huge.

This is what makes the issue of "pain" in workers' compensation so controversial. Some people, like me, have something going on either psychiatrically, or psychologically, or both, that minimizes the perception of pain. To those of us, pain is an inconvenience but we adapt.

There are others, like my wife, who perceive pain in a much different way and for whom pain is a major concern, interferes with nearly all daily living activity, and which has no place in life.

In workers' compensation schemes we try to account for pain. There are pain scales. Some doctors specialize in treating pain. Impairment tries to adjust for pain.

For some people accounting for pain is over-compensation. For many others there isn't any adequate compensation.

In the civil world a jury awards money based on "pain and suffering." It's up to a dozen people of the community, with their collective experience, judgement and knowledge, to determine if someone is really experiencing pain and what that pain is "worth."

In workers' compensation we have disability guidelines and statutory schedules that tell us what an impairment is worth, and sometimes there is a factor to adjust for pain perception.

We know now that prescribing certain medications, e.g. opioids, is more risky and has worse effects on the pain patient than the pain itself.

And there will always be injured workers for whom the remedy is inadequate. There is no adequate answer for them, unfortunately, other than perhaps providing as much emotional and psychological support as possible to assist those persons in dealing with pain.

Mental health treatment is as much a part of workers' compensation as physical health treatment.

As for me, I'm going on my bike ride now.

My Industrial Injury

Well I did it.

I had an occupational/industrial "injury."

Thursday afternoon I arose from my desk, turned to one side in a slight twisting motion, and my 54 year old back let out a little "tick."

You know, that sort of minor catch where you get a bit of a twinge in the low back; where it doesn't really hurt just at that time. But I knew I would have some pain in the day or days to follow.

[One of my problems (yep, I have many) is that I have a high tolerance for pain. Part of that tolerance is due to the multiple injuries I have sustained "growing up" (if the stupidity to injury scale is utilized, I didn't really grow up until about age 48), part of that is due to my hyperactivity, and part of that is due to Mom's lack of empathy for my fatuity ("your shoulder is going to bother you for the rest of your life!" was the first thing I heard when I came home with a radical shoulder dislocation after a 35 mph skateboard fall).]

I carried on the for rest of the work day in a relatively normal fashion, partly aware of the increasing level of pain in my lower right back.

I didn't report it to my employer, and I didn't fill out any forms.

Bowzer: "Ooh .. that hurt..."

When I got home I did tell my wife about "pulling a muscle" in my back at work. The pain and tightness in the injury area had increased. She prepared an ice pack to help reduce the swelling and inflammation, and I had a beer.

Sleeping that night was fitful - the stiffness and soreness increased in the supine position. Laying on my stomach, though, was worse. Time for Advil.

The next day at work my movements were guarded and slow. Riding my bicycle in the morning before work didn't exacerbate the condition, and actually made it feel a little better.

At work I could get up out of my chair and walk, but the injury area was tender and more painful than the day before, and required guarded movements.

Still, I put on my game face, didn't report the injury to HR, didn't fill out any forms, didn't tell anyone.

Sing the following phrase in a descending baritone: "I'm too tough to care...".

Because I've experienced the "pulled back muscle" situation before, as I'm sure most of us over the age of 50, or even 40 have, I knew that this incident would resolve on its own eventually.

Sure enough, I awoke Saturday and the intensity of the symptoms had indeed decreased. Some minor vestiges of pain and soreness remained, but I cycled 73 miles with 4,600 feet of elevation gain, trimmed the hedge in the back yard (which includes using a ladder and power trimmer), mowed the lawn, cleaned the floors, washed the motorcycle, and did all sorts of other household chores involving medium to heavy physical activity.

But now I face a conundrum: I am admitting here, publicly, in this blog, that I have committed fraud on multiple counts.

I sustained a work injury. I was at work. I was doing my job. The injury, though minor, arose out of, and occurred in the scope of my employment. Perhaps it required only first aid, but who's to determine that? I didn't report the injury and I didn't fill out the required form. I didn't follow The Law. There are penalties for not following The Law.

Worse yet, as an employer I witnessed a work injury! But I didn't provide the employee with the injury claim form. I didn't complete the Employer's Report of Injury. I didn't tell the insurance company about it. I didn't refer the employee to medical care. As an employer I too didn't adhere to The Law, and likewise face consequences.

On both accounts I simply hoped that the incident would just go away.

And if it didn't go away I would probably just go to my personal general health doctor and tell him I experienced an unknown source of back pain at home anyhow.

Which is not, as it turns out, an unusual reaction from someone intimately experienced in workers' compensation.

In the panel session in which I participated at the California Coalition of Workers' Compensation 12th conference in Anaheim, CA last week, I asked the audience of over 400 work comp professionals by a show of hands if they would they seek treatment within the work comp system for any disease or injury, regardless of origin (industrial or not).

One hand went up, and I suspect that was from a self-insured, self-administered employer.

All other 399+ hands stayed down.

How can we put people through the work comp system if we, people that are intimate with work comp, professionals that deal with the system day in and day out and KNOW people within it to get things done, have no faith in it ourselves?

Was I wrong in not reporting my injury to my employer?

And as an employer who actually witnessed the injury, was I wrong in failing to provide a Claim Form for benefits or failing to get the employee to a physician?

What if this injury ends up being more than a sprain? Will I be denied benefits if I later claim an injury? Do I even want to bring this into the work comp system? And if I decide to stay out of the system, am I committing more fraud by telling the physician that I'm not sure how the injury occurred but that it happened at home? And is it even right that I knowingly shift the cost of this incident out of work comp and into the general health sector?

I'm guilty on so many counts.

When you send over the prosecutor please take it easy on me. My back hurts...

Memory And Work Comp

After Dad died my siblings and I made arrangements for Mom at the best memory care facility we could find.

My eldest sister has worked in the elder care industry for years and has extensive education, training and experience in the field. Fortunately she knows who the players are, what their reputations are, who the owners are, care policies etc.

Placing your parent into a memory care facility is a bit alarming - as my brother observed, first visit is a scene right out of One Flew Over the Cuckoo's Nest; people wandering about with various emotions expressed on their faces clearly indicative of cognitive impairment.

Mom has moderate to advanced dementia.

I can't say that I ever really appreciated what dementia was until Mom was at the moderate stage.

For years Dad would complain about Mom's behavior - that he would have to coach her in the simplest of activities; walking for example. As her disease progressed I noticed that even eating was not simple - there was this sort of vacant look to her eyes as she tried to make the fork find her mouth.

Mom's standard response when asked to recite something of recent history would be "I don't recall" and she would complain that "my brain doesn't work like it used to."

But she could regal us in stories of the past, often several iterations in a single sitting (she would remember the past event, but forget that she already told the story ... three times already).

And she always seemed happy. If she didn't recall who you were she would at least carry on like she did, and smile.

Always smiling.

Always smiling.

At last weeks California Workers' Compensation Institute's annual meeting Terry Bogyo (pronounced "Bo-show"), an independent researcher who formerly was the Director of Corporate Planning and research for WorkSafeBC (the Workers' Compensation Board of British Columbia) gave a presentation mostly comparing California work comp to Canadian work comp.

A big part of Bogyo's talk was about demographics, and how changes to the population affect the work force and, ergo, what impact that has on work comp.

I was surprised to hear from Bogyo that Alzheimer's Disease, a subset of dementia, was the third leading cause of death.

I didn't know that any form of dementia was a direct cause of death.

The Alzheimer's Association says however that 500,000 people in America each year die directly from the disease and that it is the 6th leading cause of death, 5th if over age 65 is accounted for and the only cause of death in the top ten that can not be cured, prevented or slowed.

According to the National Institute on Aging, over 5 million people in America have Alzheimer's. The disease disproportionately affects women, though men are not impervious; and typically the disease is not apparent until after age 60, though it can begin as early as age 30.

Bogyo brought this up because the age of the work force is changing. There are more people over age 60 who continue to work past retirement age, and in surveys a majority of people say they will continue to work past retirement age regardless for various reasons.

And, I suspect, the health care industry, representing trillions of dollars in the American economy, will be disproportionately represented in the workers' compensation statistics.

For instance, according to the Alzheimer's Association, caregivers to Alzheimer's patients rack up about $9.3 billion in additional health care costs on their own in 2013 due to the physical and emotional burden of taking care of the patients. They say that caregivers rate the emotional stress as high or very high and more than one-third report symptoms of depression.

The facility where Mom lives has a very high proportion of caretakers to patients, and residents are highly engaged - Mom is woken at 7:15 every morning and typically keeps moving until bed time around 8 or 9 (in the past she would sleep in until as late as 11...).

But her facility is atypical. It costs a lot because it provides a lot. Most facilities have a much lower ratio of caretakers to patients putting additional pressure and stress on that work force.

I would expect that the facility where Mom is at does not experience the same level of changes to employee count or work place accidents as other facilities.

Nevertheless, this is just a small example of changes the economy is undergoing. More obvious are the changes we have seen in the shift from manufacturing to information.

I can't say that I fully comprehend what all these changes mean to workers' compensation, or frankly whether they are even relevant to what we all do day in and day out. Clearly the risks are different, and how we deal with those risks may take on different tones.

The ACA Is Our Opportunity

As I said yesterday, one of the more exciting things to me about attending the Workers' Compensation Research Institute's annual conference was to learn more about the Affordable Care Act and what folks more well studied on the subject than I (not hard to achieve) feel the impact will be on our industry.

The morning started off full speed ahead on the ACA with a presentation by WCRI president Dr. Richard Victor followed by a panel consisting of David North (Sedgwick), Donald Hurter (AIG) and Christopher Cunniff (Liberty).

First the WARNING per Dr. Victor - what was presented was preliminary and inconclusive; as has been reiterated ad nauseum, no one really knows what the impact of the ACA is going to be, but eventually the WCRI will publish a study with more conclusive findings.

I will jump to my conclusion, which basically is a restatement of Mr. North's comments - the immediate impact of the ACA to workers' compensation is that for the first time in a very long while that workers' compensation can be included in the conversation about health care.

And I completely agree.

For most of the history of workers' compensation it has been dealt with completely separately from general health even though the basics of both systems - providing treatment to the ill and injured - is the same.

In other words, the ACA is going to cause conversations about all of the things that we care about.

"Tremendous opportunity to have a voice," Mr. North said, about how health care is delivered in this country and how we in work comp need to have new and different ways to have access to health care in the county.

When we started talking about health care costs in work comp we took the managed care model and made it so much a part of our industry that we let managed care BECOME health care and consequently we have forgotten that health care occurs at the point of treatment.

Instead we have piled on post care services to cover the fundamental fact that we didn't provide good treatment right up front.

That's a serious indictment of our industry from one of our own industry leaders. The system has taken away what matters most in the delivery of benefits because in our quest to define and measure we have lost sight of the when and where that makes the most difference.

Dr. Victor used the metaphor of a hurricane when he introduced his presentation: right now the hurricane of the ACA is out over the Eastern Caribbean and building intensity. But like an early stage hurricane we can not predict its trajectory over the long haul, and the intensity of the storm depends on the trajectory and whether it picks up more moisture by hanging out at sea before hitting land, or whether it goes more direct and does not pick up so much damaging power.

And I agree - the impact of the ACA is going to be different in different states because of numerous factors and it is also unrealistic to believe that the ACA will be successfully implemented as written without further changes in the coming years.

Remember that this is a volatile political animal and essentially anything can happen over the course of the next three to five years as this thing matures. There are so many variables that depend on psychology and human behavior that it is nearly impossible to predict that any part of the ACA will survive without some amendment.

For instance, nearly all of the experts agree that one of the reasons why US health care costs are greater than the rest of the world is because the US subsidizes the cost of innovation - the US innovates, we pay for the research and development, the testing, the practical application, and then once that's done our technology is exported to other nations without those pre-distribution costs.

The current system is rife with conflicts of interest because our system of regulating prices is seen as unfair by providers and tends to undermine values.

And I agree with Dr. Victor that the ACA has the potential to affect so many people both financially and personally that it is an order of social adjustment along the same magnitude as the Vietnam  War draft, the Great Depression, and other huge social and cultural alterations to American society.

So this is big. Really big.

Some of the perplexing questions:

Will the predicted expansion of demand create shortages on the work comp end and if so will there be delays in care which will increase costs? And if so, where are the shortages likely to occur (or not) and how will work comp adjust?

At least in the general health model, adjustments are made by increasing the use of non-physicians and increasing reliance on technology, outsourcing to other countries, and ultimately adjusting (usually increasing) prices to meter demand.

Affecting supply and demand are different state laws that, for instance, handle the licensing of different medical professionals differently.

If one were to compare to Canada, which has a single payer health care system for both general health and work comp, there is an impact on access. In the US about 6% of the patient population wait 2 months to see a specialist; in Canada that figure is 29%.

And at least in Ontario, work comp pays more to providers for expedited access but this raises questions of fairness, implying that providers in the US (where there is greater free market enterprise available) would raise prices to allow easier access since medical treatment directly affects other parts of  the work comp equation (e.g. indemnity).

Perhaps a benefit to most system participants, employers, and workers - states may have to alter their systems to alleviate the "hassle factor" physicians complain of in order to compete for access to care.

Either way, Dr. Victor opined, the ACA will increase the cost of work comp in some fashion, at least in the short term.

There were, of course, many citations to examples and studies in the past to support Dr. Victor's cursory conclusions, and since he's analytical and I'm not I'd venture to put my betting money on his outlook.

Except if Mr. North's opinion is followed and this industry is able to take advantage of this rare opportunity to educate the rest of the medical world, and in particular the politicians behind all of this, about how things work in the workers' compensation system and find ways to make the ACA and work comp exist beneficially to each other.

And we start with altering the fundamental question, because if you don't ask the right question you can not get an answer that is going to help.

We have been asking how the ACA is going to affect work comp. That is an incorrect, as Mr. North points out.

What we should be asking is how is health care going to affect work comp? Because the ACA affects health care, not work comp. Health care affects work comp...

Its not the legislation that is going to affect us, but the "conversation." Health care affects the things that we do care about - wellness and comorbidities. We complain about how we don't have access to the tools to deal with these issues: medical records, data and studies from the general health market, effecting quality care on the front end rather than Monday Quarterbacking with reviews and other cost control features built into the law.

Now we have people who have to make a judgment about something that they don't have real good information about or a good handle on, which influence the cost of what we deal with - not just medical itself, but social, economic, health and welfare, relationships, etc.

With the ACA we now have a rare opportunity to think about medicine holistically - we are on just one component. We have the opportunity to raise the conversation and participate in the dialogue and help make work comp and medical care rational to the way people live their lives.