Insight, analysis & opinion from Joe Paduda


Don’t miss out

on WCRI’s 38th Annual Issues & Research Conference, March 16-17, 2022. Mid-March is a great time to be in Boston!  Then again, pretty much anytime is.

Register here.

on NCCI’s latest update on claim frequency and severity – spoiler alert, frequency is still declining, although it’s hard to unpack the influence of COVID from structural drivers. Hat tip to Carolyn Wise and Kevin Fernes for their helpful research and cogent explanation of the data.

More surprisingly, severity – which is workcomp-ese for costliness – declined last year – for non-COVID claims.

Also notable – and consistent with what I predicted last year COVID claims are way less costly – as in two-thirds less costly – than non-COVID claims (this isn’t about chest-pounding, rather pointing out that this was predictable – but few in the WC world have the health care/medical system insights to do so)

Also worthy of your attention, Chris Brigham MD is hosting a discussion of Post-Acute COVID via Webinar – registration is here and is complimentary.

Finally, in yet another example of the consequences of stupid, a physician who testified before Congress that Ivermectin would prevent COVID…wait for it…got COVID. As concerning, there have been 2021 1,810 cases of ivermectin poisoning in the U.S. in the first 10 months of this year, compared with 499 for the same period in 2019.

What does this mean for you?
Understanding healthcare would be really helpful for workers’ comp execs.


The giant of healthcare

UnitedHealth Group projects its 2022 revenues will be around $320 billion – that’s equivalent to 7% of total US healthcare spend. (around 80% of UHG revenues flow through as medical expenses.)

UHG is the largest of the health insurers, capturing 14.4% of total premiums – or one of every 7 premium dollars. (thanks to Jeff Kadison for the math correction)

The four largest health insurers capture 4 of every 10 premium dollars.

It also made the most profits through the third quarter of 2021 (most of CVS’ revenue is not from its health insurance business.)

For readers in the workers’ comp business, UHG’s projected 2022 medical spend  is about 8 times larger than total US workers’ comp medical spend.


Facts vs beliefs

The medical community is wrestling with ethical issues arising from vaccines.

Simply put, should unvaccinated people infected with COVID be treated differently than the vaccinated?

This isn’t just an academic exercise; here in the Upper Valley of New Hampshire and Vermont, emergency rooms, critical care units, ICUs and Pediatric ICUs are stuffed full of COVID patients, almost all of whom are unvaccinated.

The Governor has issued an Executive Order intended to give hospitals more flexibility in setting up overflow units. At least two NH hospitals have postponed or halted elective surgeries as a result of the latest COVID surge.

Michigan may be in even worse shape.

The implications are real and potentially tragic.  Parents, friends, children or neighbors in car accidents, struck by heart attacks or strokes, suffering from kidney failure or pancreatitis or appendicitis or anaphylactic shock may find their local hospital doesn’t have an open bed and/or is operating short-staffed.

The latter is worsening by the day, as nurses, support staff, physicians and other clinicians are exhausted, frustrated, angry and despondent over long hours and the need to treat unvaccinated COVID patients. That and a relatively tiny number of healthcare providers have also bought into the lies perpetrated by antivaxxers, exacerbating the staffing shortage as they lose their jobs.

The exception to this discussion is for populations that have been mistreated, lied to, abused and misled by eugenicists masquerading as researchers.

The arguments for NOT treating those adults who are unvaccinated by choice (rather than due to a medical exemption) go like this…

  • the “slippery slope” argument – once we do this, then we’ll
    • refuse to treat obese people for heart disease, kidney disorders, diabetes, hypertension etc; smokers for heart disease, cancer or COPD; drinkers for liver disease – as if individual decisions with repercussions limited to that individual are the same as antivaxxers’ potential to spread infections, contribute to variant development and possibly kill family members, kids, health care workers and co-workers in the process.
      • as long as we’re talking about obesity…it isn’t
        • communicable,
        • preventable by vaccination, or
        • filling ICUs to over-capacity.
  • the false equivalency argument
    • refusing to treat the “unvaxxed by choice”? than you shouldn’t provide care to women who have unplanned pregnancies – as if a one-time event is equivalent to a person’s brazen willingness to potentially infect dozens of us.
  • the “you are violating my freedoms” argument
    • if we can ban smoking in schools, restaurants, offices, airports and public transportation, we can certainly require immunization and penalize those without valid exemptions (if you think you should be “free” to smoke in a school or medical facility, that’s a whole different issue)
      • Oh, and pets are required to be immunized against dangerous diseases, as are kids.

Which leads us to the facts vs beliefs issue.

“Beliefs” – that you are a better driver than anyone else so should be allowed to drive at twice the speed limit through a school area and your child doesn’t need to be in a child safety seat and you don’t need to wear a seatbelt and you can hold your liquor so driving buzzed isn’t a problem for you; that you know more than 99% of the experts so you won’t get vaccinated, that children don’t die of COVID are NOT facts.

And when those beliefs are demonstrably false – as the anti-vaxxers’ arguments clearly are – the moral dilemma becomes more complicated.

“Freedom” isn’t free – if you want to be free to be unvaccinated, then you – no one else but you – have decided to accept the consequences of that decision.

Actually, that’s not right – because your decision is directly affecting your neighbors, family members, and co-workers. It is directly affecting my family members who work in healthcare, people you will infect, and lives you will disrupt.

In fact, freedom from disease, from economic disruption, from grief when loved ones die – comes at a cost – and that cost – however slight – is all of us getting vaccinated.

What does this mean for you?

Spare us the false equivalencies, the slippery slopes, the my freedoms nonsense, get the damn vaccination and wear a damn mask.

And when you get COVID, stay home and don’t interfere with our freedom to be free of COVID.

A more comprehensive discussion of the arguments against vaccination is here.



I’m thankful for

The many, many good friends I’ve made over 30+ years in this business…people I would not have met if I hadn’t somehow stumbled into and stayed/got stuck here.

The passion many have to do the right thing and the privilege it has been and is to work with companies and organizations with that central objective.

Readers who challenge, confront, correct, applaud, cheer, and debate and have been doing so for 17 (!) years.

The mistakes I’ve made over the last few decades, for what they have taught me about hubris, assumptions, lack of diligence, and the power of experience.

My family – Deb, the most positive, joyful person on the planet who’s somehow tolerated me for 34 years; Erin who’s become an amazing mom, fierce advocate for her patients, and incredibly strong person; Molly whose intensity in competition is matched only by her love for and dedication to family; and Cal who has persevered in the face of overwhelming difficulties, always pushing through and never giving in.

A lot about our world is less than great these days, so it’s more important than ever to keep the good front and center.

Be well.




COVID conversations, curiosities and cures

Three-quarters of a million of our friends, family, neighbors and coworkers have died of COVID.

That is a mind-blowing number, made personal because all of us know of someone who died of the disease or has a family member that did.

Remember 9/11 killed about 3,000 of us.

Of course, the unvaccinated are dying at a far higher rate than the vaccinated, and the vaccine divide is becoming more partisan by the day. Unvaccinated English people were 47 times more likely to die of COVID than those who had been fully vaxxed for more than three weeks. 

KFF’s survey reports the race/ethnicity vaccination gap has shrunk significantly, while the partisan divide has grown over time.

Today, the most significant factor determining vaccination status is political affiliation. 

What’s sad beyond belief is this

That said, 6 out of 10 of those who identify as leaning or Republican have received at least one dose.

Thanks to Broadspire’s Marc Cunningham for hosting me on the Beyond the Claim podcast; Marc and I spoke about the impact of COVID on workers’ comp, the need for deeper understanding of medical drivers, and what the future holds.

Advocate Healthcare Aurora’s Teresa Clarke took the stage in the second episode, and dove deeper into COVID and healthcare. Teresa manages AHA’s work comp program, and has been in the trenches since day one of the pandemic.

Hat tip to Broadspire’s Chris Stephenson for handling all the heavy lifting on the pod.

Two new medications show a lot of promise in treating COVID. And no, neither are Ivermectin.

Pfizer’s Paxlovid is in the Emergency Use Authorization process; the Federal government is expected to contracted to buy 10 million doses of the medication.

When given within three days of symptoms, Pfizer’s antiviral reduced the rate of death and hospitalization by 89 percent for those at high-risk of developing severe illness.

Merck’s drug “reduced the risk of hospitalization and death by nearly half among higher-risk people diagnosed with mild or moderate illness.”

What does this mean for you?

Get vaccinated, because you might die if you don’t.


Infrastructure = jobs = premiums and claims

Three days ago President Biden signed the Infrastructure Investment and Jobs Act, a notable accomplishment coming after bipartisan support in Congress.  Pretty remarkable that this happened at all; past Administrations  – both Democratic and Republican that enjoyed majorities in Congress were unable to pass this desperately needed legislation.

There’s lots of good news in the Act; including: (source Business Facilities)

  • US$47 billion in climate resilience measures to protect buildings from the storms and fires that result from climate change
  • $65 billion to repair and protect the electric grid, build new transmission lines for renewable power and develop nuclear energy and “green hydrogen” and carbon capture technologies
  • $39 billion to continue and expand current public transit programs, including help that allows cities and states to buy zero- or low-emission buses
  • $66 billion to fix Amtrak and build out its service along the Northwest Corridor, in addition to building tens of millions for high-speed rail and other commuter rail
  • $7.5 billion to build electric vehicle charging stations;
  • $25 billion to repair airports to reduce congestion and emissions, encouraging the use of low-carbon flight technology

States are already targeting the funds for much-needed projects; North Carolina is getting $1.5 billion for bridge repairs,  broadband expansion, and transportation upgrades – and more dollars for other projects.

Wyoming’s roads, dams, water systems and bridges will get $2.5 billion in repairs and upgrades.

Arizona’s rapidly expanding population desperately needs new infrastructure – and big improvements to utilities especially water as well as ports of entry along the border. 

The federal Transportation Department “plans to open competition for the first round of port infrastructure grants funded by the bill within 90 days, as part of a broader effort to ease supply chain bottlenecks slowing down the delivery of goods.”

That will impact Long Beach, Savannah, Houston, Los Angeles, Miami, Mobile, Seattle, Norfolk and other critical ports.

The question is – how fast will these dollars translate into employment? I’d say next summer we will see a noticeable impact as plans that are already under development get funding commitments.

The Federal Highway Administration projects each billion dollars in highway funding supports 13,000 jobs.

S&P estimated a:

 $2.1 trillion boost of public infrastructure spending over a 10-year period, to the levels (relative to GDP) of the mid-20th century, could add as much as $5.7 trillion to the U.S. over the next decade, creating 2.3 million jobs by 2024 as the work is being completed.

The Act is about $1.7 trillion in spending, so we’re looking at about 1.9 million jobs. 

Of course, that is an estimate – it could be higher or lower. However, there’s no question workers’ comp will see:

  • higher premiums;
  • more claims; and
  • higher severity.

What does this mean for you?

Prepare for some much-needed growth. 


Medical drives everything

The “claim-centric” approach to handling workers’ comp claims is misguided.

Hear me out.

You’re a parent of a sick child. Her pediatrician wants her to get ear tubes and an antibiotic. The insurance company’s claims rep denies the request, instead requesting an X-Ray and Tylenol, telling you to call back in a few days if that doesn’t work.

Of course, the claim rep thinks she’s doing the right thing and has decades of experience – but no medical training, no RN or any other designation.  You appeal to your daughter’s case manager, who agrees with the pediatrician.

And the claims rep rejects the case manager’s recommendation.

24 hours later, your baby daughter has a fever and is hoarse from screaming and you are at the local ER, about to lose your mind.

This is how almost every workers’ comp payer “manages” medical treatment.

Claims reps/adjusters/examiners with zero formal medical training decide what medical care your claimants get.

They approve opioids and spinal cord stimulators because they don’t want to hear from an attorney.

They deny surgeries because, well, because they don’t think they are necessary.

They refuse to pay for behavioral health because they don’t want to “own the psych.”

They “certify” 24 visits of PT because, well, because…

Medical drives claim outcomes. Medical drives claim costs.  Medical drives recovery and return to work. Medical drives litigation. Medical drives everything.

What does this mean for you?

Would you let a claims rep determine the care your baby or grandbaby gets?

Then why do you have claims reps determining the care your claimants receive?

(shout out to an anonymous good friend who got me thinking more about this)


for hospitals, Cost ≠ Quality

Some hospitals are efficient – defined as delivering excellent care at relatively low cost, while others are quite inefficient – high cost, not great care.

Then there are the high cost and unknown quality of care facilities – but the net is this – cost ≠ quality, and quality does not cost more.

The Lown Institute has done some great research on this, and identified the nation’s 10 most efficient hospitals – the criterion being how much Medicare was charged compared to how many patients died 30 and 90 days from admission. OK, that isn’t by any stretch a comprehensive definition, but the results were revealing.

Costs ranged from $9,000 to $27,000 per patient…and if all hospitals operated as efficiently as the top 10, we taxpayers would save $8 billion each year.

Of course private payers are charged more, and pay more than Medicare. Nonetheless, efficient hospitals are going to be efficient for all payers.

Here’s the top ten.

  1. Pinnacle Hospital (Crown Point, Ind.)
  2. Saint Mary’s Regional Medical Center (Reno, Nev.)
  3. MercyOne Dubuque Medical Center (Dubuque, Iowa)
  4. Encino Hospital Medical Center (Encino, Calif.)
  5. Park Ridge Health (Hendersonville, N.C.)
  6. Oroville Hospital (Oroville, Calif.)
  7. Saint Michael’s Medical Center (Newark, N.J.)
  8. UnityPoint Health-Meriter (Madison, Wis.)
  9. East Liverpool City Hospital (East Liverpool, Ohio)
  10. Maple Grove Hospital (Maple Grove, Minn.)

Curious about another hospital?  Click here to find out how it ranked.

What does this mean for you?

Knowledge is power – but only if you use it.


Big doings! and natural immunity vs vaccination

Well. that was welcome indeed.

Looks like the Dems in Congress have reached a deal on controlling (some) drug prices. As with all legislation, it is far from perfect, no one is particularly ecstatic, but then again, politics is the art of the possible, and the deal WILL help control drug price increases. Especially for older Americans who now get out-of-pocket spending on drugs capped at $2,000 a year and diabetics who will get a cap on insulin at $35.

Will this effect workers’ comp? Unlikely. WC drug fee schedules are based on AWP except in Cali, where it is based on Medicaid.

The Labor Department’s jobs report this morning showed over half a million people were hired last month, a major jump over prior months. Over 5 million (!) have been hired since January.

This means – higher payrolls = more people insured, more payroll, more consumption.

I expect employment will be a topic of conversation at WCRI’s annual meeting, slated for March 16 – 17 in Boston. Save that date and make sure you are on their mailing list as this always sells out.

All things COVID

Two drug manufacturers reported positive results for their new COVID treatment medications.  Just-released data from a clinical trial indicated Pfizer’s Paxlovid cut the risk of hospitalization or death a whopping 89 percent when administered within three days after the start of symptoms. Paxlovid won’t be widely available for several months, and then will likely be prescribed mostly to high-risk people.  Treatment will cost about $700 per patient.

Merck’s  molnupiravir will cost about the same; it has been approved for use in the UK and the manufacturer has applied for an Emergency Use Authorization (EUA) here in the US.  As reported in the Economist, research

“found the interim results of a trial found that patients with a risk factor for covid-19 were 50% less likely to be hospitalised or die if the oral antibiotic was taken in the first five days after symptoms.”

While neither is available just yet, expect both to get EUA approval shortly.  BTW, remember the vaccines were also administered under EUA.

We are learning more each day about long COVID, and much of what we are learning isn’t good (note that’s not surprising, as first we need to understand the problem and only then can we work on solutions). Significant GI problems are one issue, and the more severely affected patients also present with anxiety and sadness. That’s not surprising either, as nothing makes you more miserable than a severe GI problem.

BUT… one of the report’s authors noted “We do not know whether the psychiatric symptoms are a cause or a result of the GI symptoms, but we suspect it is likely to be both,”

About 20 million of us have experienced symptoms such as difficulty breathing, pain, hypertension and fatigue that are consistent with long COVID. Get the latest on November 17 at noon eastern when the National Institute for Health Care Management hosts a time of a webinar on the “Implications of Long COVID for patients and the health care system.” Register here.

Alert for some readers advocating “natural”immunity… A new study found “unvaccinated US adults who previously had COVID-19 contracted the disease at more than five times the rate of those who were fully vaccinated.”

What does this mean for you?

Get the shot.



Reimbursement is changing – nerd alert…

CMS – aka Medicare – has published details on the pending cut to physician reimbursement and some physician groups are howling.  The cuts aren’t uniform; Any changes to the fee schedule done via rulemaking must be budget neutral; if some payments go up, others must go down.

Overall reimbursement is slated to drop by about 4%.

Surgery and radiology are two of the specialties especially vocal about the changes, which MAY be altered or retracted if Congress passes a law revising the reimbursement change.

(Details on this are here…)

A couple other things of note…

  • Of interest to workers’ comp are new codes (CQ and CO) and payment for services rendered by PTAs and OTAs supervised by PTs and OTs at 85% of the PT/OT rate. there are modifiers and time requirements, so make sure your BR entity has got this coded correctly.
  • The CPT Codebook listing of bundled services are not separately payable.  I’d note that this is NOT universally understood by work comp bill review entities; yes it is complicated and yes it changes, so payers would be well-advised to make darn sure they are handling these bills correctly.
  • Critical care services may be paid separately in addition to a procedure with a global surgical period if the critical care is unrelated to the surgical procedure. Again, this is why reviewing provider notes is key, because facilities/practices often bill these separately in the hope that the payer won’t catch the “unrelatedness” issue. Separately, a denial of payment for critical care services should NOT result in an additional fee to the payer; that is basic bill review – or should be. Also, watch out for PPO fees attached to those separate charges – BR and PPO companies make money on those “reductions” while they DON’T make more $$ on just denying the critical care service as part of a code review.

So, what does this mean/what are the implications?

Watch out for creative billing/increased utilization as providers look to make up for lost revenue/lower reimbursement from Medicare and Medicaid.

Ensure that A)  your bill review program is prepared to handle these changes and B) you aren’t paying extra for that “management.”

(for more on the issue of how Sequestration effects reimbursement, go here.)


Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



© Joe Paduda 2021. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

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