Everybody likes to win. It's even better when the win is a common win. But it's the best when it's a win, win, win situation!
My sales training guru, Jeffery Gittomer [www.gitomer.com/], discourages blatant sales pitches in marketing material and strongly encourages content that provides value to the reader. Well, I'm going to violate that rule, sort of, by telling you about our new advertising program because I truly believe that this is not just a sales pitch, but is an unbelievable value proposition that will make you a winner, makes WorkCompCentral a winner, and combined elevates our winning to an even higher standard!
I'm talking about our new FREE ADVERTISING program. Wow, FREE advertising! Hold on, skepticism just kicked in - nothing is REALLY free‚ right?
Okay DePaolo, what's the catch?
You're right reader, nothing really is free, but I got your attention!
Here's the basics: you buy a 6 month subscription for someone else, and you get to advertise on WorkCompCentral for no additional charge. The number of impressions allocated to your ad is based upon how many subscriptions you sponsor.
This is why this program is a win, win, win:
First, you really do essentially get free advertising because your only obligation is to buy a subscription for someone else.
Second, what an incredible opportunity for YOU to get in front of YOUR customer or prospect and provide them with VALUE. Can you think of a better way to build that crucial customer relationship? Everyone loves WorkCompCentral but many adjusters, attorneys, administrators and other professionals don't have individual access and must share this great resource with others, which creates access issues. When you give a WorkCompCentral subscription to a customer or prospect you are providing them with access to WorkCompCentral on their own terms - when they want, where they want, how they want!
Third, because the subscription is for 6 months this gives you a reason to contact and be in front of your customer or prospect routinely - every six months. What a great conversation opener and relationship builder!
Fourth, the more subscriptions you sponsor, the more advertising space you get, which means your customers and prospects see your message more often. It is an exponentially growing program of building relationships and getting your message to the people that need to see it!
Fifth, the more subscriptions you sponsor, the more WorkCompCentral grows its user base and usage statistics, which translates to more exposure for you to other new prospects and potential new customers!
All for the price of a six-month individual subscription.
So, as you can see, even though I violated Gittomer's rule in form, the substance of this article is genuinely a value proposition. Please call Christina Childers at 805-484-0333, x. 126 or email her at christina@workcompcentral.com to discuss this great new opportunity and get the details!
Tuesday, May 10, 2011
Monday, May 9, 2011
A Disability System with a Medical Component? Bad Argument
During one of the sessions at Thursday's NCCI Annual Issues Symposium (AIS) one of the panel presenters opined that work comp can not be part of a single payer/source medical system because work comp is a 'disability system with a medical component'.
I couldn't disagree more.
Medical costs now comprise the majority of every dollar spent on a work comp claim. This is true in every study of work comp costs regardless of which alphabet soup organization published the study.
Further, the thinking that work comp is a disability system is what has gotten this industry into trouble, and in fact may be why medical should be removed from work comp and left with the general health system.
Let's take the base argument that work comp is basically a disability system with a medical component - that right there tells us that medical has no particular reason to be a part of work comp other than the delivery of treatment.
The argument was made that work comp is different because general health just focuses on making the patient better, while work comp is focused on returning the injured worker back to work.
Sounds like an disingenuous argument at best. I frankly don't see the difference. If the patient is better, then the patient should be able to do what the patient did prior to injury, whether it's cooking, cleaning, participating in athletics, or working.
Most states use an edition AMA Guides to regulate the indemnity portion of the the system. The AMA Guides focus on "whole person impairment". Some states modify this impairment to come up with a "disability" (which simply means a measure for indemnity) and some don't. The point is that the standard for "impairment" exists whether one is in the work comp system or not. This point is clear in that the Guides are used for lots of other medical-legal issues other than work comp - e.g. auto accident litigation.
So, saying that work comp is somehow different than general medical because it is a disability system with a medical component does not stand the test of logic. If that were the case then all other tort systems that rely on medical-legal standards should also be separate systems.
I couldn't disagree more.
Medical costs now comprise the majority of every dollar spent on a work comp claim. This is true in every study of work comp costs regardless of which alphabet soup organization published the study.
Further, the thinking that work comp is a disability system is what has gotten this industry into trouble, and in fact may be why medical should be removed from work comp and left with the general health system.
Let's take the base argument that work comp is basically a disability system with a medical component - that right there tells us that medical has no particular reason to be a part of work comp other than the delivery of treatment.
The argument was made that work comp is different because general health just focuses on making the patient better, while work comp is focused on returning the injured worker back to work.
Sounds like an disingenuous argument at best. I frankly don't see the difference. If the patient is better, then the patient should be able to do what the patient did prior to injury, whether it's cooking, cleaning, participating in athletics, or working.
Most states use an edition AMA Guides to regulate the indemnity portion of the the system. The AMA Guides focus on "whole person impairment". Some states modify this impairment to come up with a "disability" (which simply means a measure for indemnity) and some don't. The point is that the standard for "impairment" exists whether one is in the work comp system or not. This point is clear in that the Guides are used for lots of other medical-legal issues other than work comp - e.g. auto accident litigation.
So, saying that work comp is somehow different than general medical because it is a disability system with a medical component does not stand the test of logic. If that were the case then all other tort systems that rely on medical-legal standards should also be separate systems.
Friday, May 6, 2011
State of the Line - "Deteriorating"?
NCCI's CEO, Stephen Klingel, opened up yesterday's Annual Issues Symposium (AIS) by describing the state of of the work comp market as "deteriorating."
That's not what I, and 724 of my colleagues (record attendance) wanted to hear, but it was sobering nevertheless.
The question is - is "deteriorating" worse than last year's "precarious". The balance of the downside and upside as explained by the presenters at the AIS indicated to me that the situation is not dire as the adjective used would have one believe.
First off, while written premiums are near an all time low relative to volume and inflation, the trend was explained as having slowed significantly, if not actually having bottomed out. This is great news for brokers whose compensation is commission based on premiums.
In addition while the combined ratio has climbed dramatically to 115, one has to remember that this number is essentially a cash flow number - thus the combined ratio is reflective of the fact that reduced premiums (due to reduced payrolls) is intersecting with long tail claim elements. Also the data is affected by premium refunds (aka "dividends") because audited payrolls were less than what premiums were based on.
Other positive news was that indemnity claims lowered, and medical costs, though still up, did not increase nearly as much as in the past. Perhaps some state's reforms are actually producing savings on the medical front.
Finally, while the unemployment numbers are still high, new jobs are being added trending towards increasing payroll.
Work comp typically lags the general economy by a couple of years due to the effects of employment. What was reported gives me optimism that we are on the road to overal economic recovery, albeit slowly, and that the industry is relatively healthy.
The positive news was that the industry remains well capitalized, with very healthy surplus (in other words there's plenty of money available to meet claim obligations).
That's not what I, and 724 of my colleagues (record attendance) wanted to hear, but it was sobering nevertheless.
The question is - is "deteriorating" worse than last year's "precarious". The balance of the downside and upside as explained by the presenters at the AIS indicated to me that the situation is not dire as the adjective used would have one believe.
First off, while written premiums are near an all time low relative to volume and inflation, the trend was explained as having slowed significantly, if not actually having bottomed out. This is great news for brokers whose compensation is commission based on premiums.
In addition while the combined ratio has climbed dramatically to 115, one has to remember that this number is essentially a cash flow number - thus the combined ratio is reflective of the fact that reduced premiums (due to reduced payrolls) is intersecting with long tail claim elements. Also the data is affected by premium refunds (aka "dividends") because audited payrolls were less than what premiums were based on.
Other positive news was that indemnity claims lowered, and medical costs, though still up, did not increase nearly as much as in the past. Perhaps some state's reforms are actually producing savings on the medical front.
Finally, while the unemployment numbers are still high, new jobs are being added trending towards increasing payroll.
Work comp typically lags the general economy by a couple of years due to the effects of employment. What was reported gives me optimism that we are on the road to overal economic recovery, albeit slowly, and that the industry is relatively healthy.
The positive news was that the industry remains well capitalized, with very healthy surplus (in other words there's plenty of money available to meet claim obligations).
Thursday, May 5, 2011
Duncan On Calendar ... Finally!
Yes I know I'm in Florida and at the NCCI Annual Issues Symposium (AIS), but WorkCompCentral News this morning reported that the California State Supreme Court has finally calendared oral arguments in Duncan vs. WCAB.
For those of you outside California, the Duncan case represents a potentially huge cost adjustment factor for employers exposed to life pension or permanent total disability claims originating after January 1, 2004.
The law was part of the "step reform" bill AB 749 and included modifications to Labor Code section 4659, creating a cost of living adjustment (COLA) to life pension or permanent total disability claims. The precise issue is when the COLA starts.
My black letter reading of the section, and the 2nd Appellate Court's reading (from whence the Supreme Court's review originated), is that the COLA adjustment started 1/01/2004, effective 1/01/2005, regardless of date of injury. The business/insurance community argues that the COLA is claim specific and does not start until the January 1st after the date of injury. This can make a huge difference in the starting indemnity rate for qualifying claims.
I believe the Supreme Court will affirm the 2nd DCA's interpretation. The purpose of a COLA is to keep an annuity current with the rate of inflation. Making the COLA effective after the date of injury means that indemnity for future injuries will fail to keep pace with inflation.
The Supreme Court will look to the intent of the legislature in this sloppily written piece of law, and I think the intent of the legislature is evident in Labor Code section 4453, amended by a different bill about the same time as LC 4659.
LC 4453 provides that calculation of average wages for purposes of determining the temporary total disability (TTD) indemnity rate "shall be increased by an amount equal to the percentage increase in the state average weekly wage as compared to the prior year" starting 1/01/2007. Since then the plaintiff in the Duncan case (the Division of Industrial Relations) has dutifully followed the statute and increased the maximum wages for TTD.
How is it that the same agency that promotes inflation protection factors for TTD opposes the same protection for life pension or PTD claims?
It's all politics.
Duncan is gone, Schwarzenegger is gone. The recession appears to be easing. How will the Supreme Court go?
I urge the Supreme Court to do the logical thing and uphold the 2nd DCA's ruling. If the legislature didn't intend for life pension and PTD claims to keep pace with inflation then it would have been very easy to say so right in the code section. In addition, starting the indemnity rate at 2004 levels makes no sense for a claim originating 10 or 20 years hence - all one has to do is look at the price of fuel in 2004 (about $1.70) to today (about $4.00) - inflation ravages the annuity.
For those of you outside California, the Duncan case represents a potentially huge cost adjustment factor for employers exposed to life pension or permanent total disability claims originating after January 1, 2004.
The law was part of the "step reform" bill AB 749 and included modifications to Labor Code section 4659, creating a cost of living adjustment (COLA) to life pension or permanent total disability claims. The precise issue is when the COLA starts.
My black letter reading of the section, and the 2nd Appellate Court's reading (from whence the Supreme Court's review originated), is that the COLA adjustment started 1/01/2004, effective 1/01/2005, regardless of date of injury. The business/insurance community argues that the COLA is claim specific and does not start until the January 1st after the date of injury. This can make a huge difference in the starting indemnity rate for qualifying claims.
I believe the Supreme Court will affirm the 2nd DCA's interpretation. The purpose of a COLA is to keep an annuity current with the rate of inflation. Making the COLA effective after the date of injury means that indemnity for future injuries will fail to keep pace with inflation.
The Supreme Court will look to the intent of the legislature in this sloppily written piece of law, and I think the intent of the legislature is evident in Labor Code section 4453, amended by a different bill about the same time as LC 4659.
LC 4453 provides that calculation of average wages for purposes of determining the temporary total disability (TTD) indemnity rate "shall be increased by an amount equal to the percentage increase in the state average weekly wage as compared to the prior year" starting 1/01/2007. Since then the plaintiff in the Duncan case (the Division of Industrial Relations) has dutifully followed the statute and increased the maximum wages for TTD.
How is it that the same agency that promotes inflation protection factors for TTD opposes the same protection for life pension or PTD claims?
It's all politics.
Duncan is gone, Schwarzenegger is gone. The recession appears to be easing. How will the Supreme Court go?
I urge the Supreme Court to do the logical thing and uphold the 2nd DCA's ruling. If the legislature didn't intend for life pension and PTD claims to keep pace with inflation then it would have been very easy to say so right in the code section. In addition, starting the indemnity rate at 2004 levels makes no sense for a claim originating 10 or 20 years hence - all one has to do is look at the price of fuel in 2004 (about $1.70) to today (about $4.00) - inflation ravages the annuity.
Wednesday, May 4, 2011
NCCI's Annual Symposium & State of the Industry
I'm writing this in the terminal of Los Angeles International Airport (Gate 4B by the way!) awaiting my flight to Orlando, Florida for this week's annual presentation by NCCI on the state of the industry.
Being from California I have a distorted view of workers' compensation. California represents about 20% of the total workers' compensation market - certainly not an insignificant amount considering there are 49 other states out there, the District of Columbia, and a few territories that provide workers' compensation systems. So going to NCCI Annual Issues Symposium (AIS) gives me perspective on the industry that can't be obtained anywhere.
I learn something new every time I go to the AIS, which is one of the reasons I go. While California has some unique aspects about its work comp system, we have plenty to learn from other states.
Another reason I go is because there are 700 other very high level executives and state administrators who attend, so the networking is fantastic. And sharing thoughts about work comp, understanding the issues, and sharing our common passion for work comp just can't be beat. Plus this is usually the only time out of the year that I can get together with my colleagues.
I certainly will post my color commentary about my experience at AIS and anything new I learn. Of course, my impressions can't replace professional journalism, which is why we will have our Senior News Editor and head of the News Department at WCC, Jim Sams, covering the event. To get the full story be sure to read Jim's pieces following AIS.
And if any of you reading this are going to be at AIS be sure to drop me a line - I'll see you there!
Being from California I have a distorted view of workers' compensation. California represents about 20% of the total workers' compensation market - certainly not an insignificant amount considering there are 49 other states out there, the District of Columbia, and a few territories that provide workers' compensation systems. So going to NCCI Annual Issues Symposium (AIS) gives me perspective on the industry that can't be obtained anywhere.
I learn something new every time I go to the AIS, which is one of the reasons I go. While California has some unique aspects about its work comp system, we have plenty to learn from other states.
Another reason I go is because there are 700 other very high level executives and state administrators who attend, so the networking is fantastic. And sharing thoughts about work comp, understanding the issues, and sharing our common passion for work comp just can't be beat. Plus this is usually the only time out of the year that I can get together with my colleagues.
I certainly will post my color commentary about my experience at AIS and anything new I learn. Of course, my impressions can't replace professional journalism, which is why we will have our Senior News Editor and head of the News Department at WCC, Jim Sams, covering the event. To get the full story be sure to read Jim's pieces following AIS.
And if any of you reading this are going to be at AIS be sure to drop me a line - I'll see you there!
Tuesday, May 3, 2011
AZ's Unique Drug Control Prescription
Friday Arizona Governor Jan Brewer signed into law a unique twist to the various attempts to control prescription drug costs with HB 2616.
Under the new law, which takes effect July 18, an insurance carrier or self-insured employer is not required to pay for office visits when a physician fails to provide justification for narcotic prescriptions or fails to comply with a request to consult with the Controlled Substance Prescription Monitoring Program (a database of prescriptions for controlled substances that was created by lawmakers in 2008 to prevent patients from doctor shopping to obtain multiple prescriptions) before writing a prescription. The bill also allows the insurer or employer to request a change of physician.
Under the new law, which takes effect July 18, an insurance carrier or self-insured employer is not required to pay for office visits when a physician fails to provide justification for narcotic prescriptions or fails to comply with a request to consult with the Controlled Substance Prescription Monitoring Program (a database of prescriptions for controlled substances that was created by lawmakers in 2008 to prevent patients from doctor shopping to obtain multiple prescriptions) before writing a prescription. The bill also allows the insurer or employer to request a change of physician.
This is a unique approach because it incorporates several elements that various other states have implemented or are attempting to implement.
First there is the bureaucratic hassle factor of additional reporting and forms by requiring physicians to provide justification and/or failure to comply with the "program".
Second there is the financial incentive (or disincentive) tied to failure by not getting paid for office visits.
Finally there is the possibility of losing the income stream tied to ongoing patient treatment.
Other states are trying to control physician dispensing prescription medicine abuse with just bureaucracy (Oregon), caps (Texas), outright bans (Florida), and utilization review (California). Some states allege much higher costs to work comp systems as justification for new regulation of physician dispensing of drugs, while other states seem more concerned with social reform.
Regardless, the wave of new ideas on controlling prescription drugs in the work comp market will be interesting to monitor over the long term to see which, if any, solution actually makes a difference. The alphabet soups (NCCI, CWCI, WCRI, etc.) will all be watching.
Monday, May 2, 2011
Cuiellette Case Highlights the Legal Fiction of Disability
When California’s 2nd District Court of Appeal ruled April 22 handed down its decision in Rory Cuiellette v. City of Los Angeles last week, affirming a $2.7 million verdict against the City for FEHA discrimination, it highlighted the legal fiction of disability, and that is why an employer can not rely on a court ruling that an employee has any certain level of disability.
Cuiellette was injured on duty and requested an assignment to the court desk of the fugitive warrants section when he returned from medical leave. He worked the job for less than a week when he was dismissed because his workers’ compensation claim resulted in a 100% disability rating.
The case is important to me in several respects:
First, the case very powerfully demonstrates the vulnerability of business to employee law suits that go far beyond the liability exposure employers experienced when workers' compensation was first born.
Second, in a very graphic way, this ruling highlights the fact that a disability award, impairment rating, etc. is pure legal fiction with no basis in reality whatsoever.
Item two above is special to me because the counter-argument I hear all the time, when I propose that workers' compensation is no longer relevant to modern society (i.e. taking medical out of work comp, so all that is left is an indemnity component), that the determination of disability is so deeply connected to the medical component of work comp that the two can not be separated.
I have always argued that the system of "disability" that we have in work comp is pure fiction, has no basis in reality, and is there simply as an accommodation because we have to have some system of measurement to base compensation on.
My problem with this system is that the current system rewards disability - the wrong incentive is placed before everyone that engages in the work comp disability determination.
My argument is that we should change the system to reward productivity. How would we do that? Sharper and more creative minds will have to help with that answer.
But how we end up rewarding productivity is not the point of this post - the point is that the Cuiellette case demonstrates that disability in the work comp system is a legal fiction at best. We have been tweaking and twisting how to compensate disability for 100 years so we have lots of experience doing that.
There's no reason we can't change the formula to reward productivity - doing so would not entail any more legal or medical fiction that is currently in place, and may shift societal expectations towards the betterment of all. Disability is a fiction that the system has "learned" and there's no reason that productivity could not be "learned" as well.
Cuiellette was injured on duty and requested an assignment to the court desk of the fugitive warrants section when he returned from medical leave. He worked the job for less than a week when he was dismissed because his workers’ compensation claim resulted in a 100% disability rating.
The case is important to me in several respects:
First, the case very powerfully demonstrates the vulnerability of business to employee law suits that go far beyond the liability exposure employers experienced when workers' compensation was first born.
Second, in a very graphic way, this ruling highlights the fact that a disability award, impairment rating, etc. is pure legal fiction with no basis in reality whatsoever.
Item two above is special to me because the counter-argument I hear all the time, when I propose that workers' compensation is no longer relevant to modern society (i.e. taking medical out of work comp, so all that is left is an indemnity component), that the determination of disability is so deeply connected to the medical component of work comp that the two can not be separated.
I have always argued that the system of "disability" that we have in work comp is pure fiction, has no basis in reality, and is there simply as an accommodation because we have to have some system of measurement to base compensation on.
My problem with this system is that the current system rewards disability - the wrong incentive is placed before everyone that engages in the work comp disability determination.
My argument is that we should change the system to reward productivity. How would we do that? Sharper and more creative minds will have to help with that answer.
But how we end up rewarding productivity is not the point of this post - the point is that the Cuiellette case demonstrates that disability in the work comp system is a legal fiction at best. We have been tweaking and twisting how to compensate disability for 100 years so we have lots of experience doing that.
There's no reason we can't change the formula to reward productivity - doing so would not entail any more legal or medical fiction that is currently in place, and may shift societal expectations towards the betterment of all. Disability is a fiction that the system has "learned" and there's no reason that productivity could not be "learned" as well.
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