Beyond the Claim
Beyond the Claim

Episode 1 · 11 months ago

The Past, Present & Future Challenges in Workers’ Comp w/ Joe Paduda


The pandemic had a profound impact on workers compensation.  

Because of COVID, workers’ comp had to revolutionize how it addressed claim intake, claim triage, claim reporting, claim qualification, and medical management virtually overnight.  

And it’s still changing. Partially due to covid, but also a variety of other factors. In fact, the future of workers’ comp remains unwritten.  

Joe Paduda, Principal of Health Strategy Associates, joins the show to discuss how workers’ comp has changed and how it may continue to evolve into the future.  

In this episode, we discuss:  

- The effect opioids have had on claims costs  

- How the pandemic has changed workers compensation  

- What challenges and opportunities are lurking around the corner for workers compensation  

Resources mentioned during the podcast:  

- Check out Joe’s Blog at  

- Visit  

Need more claims strategy in your life? Check us out on Apple Podcasts, Spotify, or on our website.  

Listening on a desktop & can’t see the links? Just search for Beyond the Claim on your favorite podcast player.

What frustrates me most about this industry is the lack of basic understanding of the health character delivery system. This industry looks at health care as a line item, as numbers as dolls. You' re Listening to beyond the claim, the show for forward thinking, risk and claims professionals curious about the latest industry trends, winning strategies and stories from influential leaders. Let' s dive in! hello, everyone. welcome to beyond the claim. I' m your host, Marc Cunningham, chief sales and marketing officer for Broadspire. with me today, I Have Joe Padua. Joe is an industry expert in the Managed Care Space, Speaker, Media Resource, as well as author and Joe is president of Comp Pharma, as well as owner of Health Strategy Associates. Joe, you for bringing me on today. Thanks for the honor. absolutely. so Joe, for those of us out there, those folks out there that aren ' t familiar with the Managed Care space, What' s your take on this? is poke, stop and say What do you do over the years? What do you say? Well, I say I know an awful lot about very little. Very little. Agreeing game workers, CO, medical management, space- I' ve been doing this for thirty plus years was involved in the first workers. Count P PO WE BUILT FOR AIG way back in the day, but manage care is basically everything that has to do with managing the medical delivery. Part of the work rock work comply, but I' m also I sit on the board of a dual eligible Medicare medicate plan up here in New England, so I do a good bit of work outside of workers cop as well. So I have to ask you: I was a preparation for a conversation checking out some of your profile, and I saw you have a degree in anthropology. So tell me about your journey here. How do you go from that degree to the the managed Care Workers Conversation Space? Well, I was not much of a student at my allamater Syracuse and I was in the rolling team there and had a fraternity there. So anthropology was a way for me to get a degree while focusing on things that I thought were more important at the time but anthropology. I think it' s sort of the study of humanity and how humanity is of all, and I think it' s the best training you could have for working in any business or any organization, because it' s really all about trying to understand what drives people and what motivates people and what the taboos are. What how to how change occurs in cultures- and it also makes you sort of open up and understand that your perspective is your perspective and marks perspective is his and your watchers perspectives are there said you have to respect those those differences if you graduate from Syracuse and then so what was your? what was your next step? I assume you have some kids. I believe you had mentioned earlier. So what ' s that what did that journey go from Syracuse to today? Well, I went to graduate school and I was going to get into the whole corporate health promotion. Fitness business, I' m not halfway through or realize that there was no money in that. So I I I yes quickly over into what was called cost containment back then, and I got into health care, cost containment and ended up going to work for a subsidiary AIG that was involved in that business way back in the mid the late s went on to the travelers liberty usual as well, and then I had the opportunity to work for united health care, and after doing that, for about a year, I decided that I was not the kind of person who needed to work in a big organization. Actually, the organization is sort of mutually decided that so I went out of my own, and I' ve been independent for about twenty seven years now I remember or in freshman orientation. At the time. I think I wanted to do physical therapy or sports medicine. I can' t remember and that everyone stand up that was going to select that as a degree and half the half of the of the freshman population stood up is like. I got to find something else. This doesn' t make any sense, plus there' s no money, Joe. I know you' re out there in the industry extremely active. I know you do quite a bit of publishing and speaking engagements as as you look at the space today, you know...

...what is what' s the current state of affairs: Where do you see there being opportunities still whether it relates to the pandemic or not whether I be later related to Costantin or not? What really keeps you up at night? As you think you know, we' ve got to kind of move this needle for it or that there is risk or exposure, but in this within the space. So I think there' s a couple things one is. I believe that workers can' t rates premiums et C are still significantly higher than they should be, and it was a recent C N CCI report that came out and essentially demonstrated that you know Roveres erved, vice somewhere north of ten billion dollars, which, in eight five billion dollar industry is a lot in line, and I believe that that' s due to and there' s some data that actually backs this up, but I called the Opio and hang over. You know ten. Twelve thirteen years ago we were just getting into sort of the Opio era and workers compensation. They were really starting to be over prescribed and at onee point you know about forty percent of drug cost were for opioids and similar drugs, but o boots, increased claim, duration, add to medical expenses, increase, indentity and and medical costs. So there was this external exogenous factor that was driving workers, compensation, clean costs higher, and I think that was a big reason that medical cost we' re going out. Medical inflation was going out, but actuaries were looking in the review America as they do, of course, and it took a while for them to sort of catch up to the impact that opioids were having from a financial perspective, will leave aside the society and then pack etcetera over the last six seven eight years the industry said a great job in reducing unnecessary in appropriate use of opiate. To the point now where it' s about seventeen percent of of the medical stuff part in pharmacy, cal spent so what' s happening. How is actual are still looking at the Review Mirror and they think that this and their numbers indicate that there' s still this opio problem. Well, that problem is a lot smaller now than it was so that ' s. I think why you know combined Rictus are in the high eights, and you know when you look at total total profits of the business. It' s been historically I for a few years, so my sense is that clink coster still projected to be too high et ca because of this opio overhead. this is going to end, I would say, probably in the next couple of years or so, the takeaway from that is. The church rates are still too high, because insurance carriers are looking at the review, mirror and don' t understand the impact that the Redet, the great job they' ve done in reducing opioids, has has had that' s a great impact of that as a thinkin. This way so and our other people have different opinions, which I certainly respect your race. You know the first question. the first thing, I would say, is: Have you guys factored in the overall reduction, no pois and how that' s impact in our claims and how claims pictures different today than it was historically so, and think that it will require some kind of coordinated cost containment initiative? Great Question? I think that employers brokers, consultants need to push back on insurance carriers, stop lost, curious excess carriers and make sure that they are factoring in the fundamental change in opioids and how that' s affected claim durations et ce, because I don' t I haven' t heard of anybody really making an effort to do that. So I would encourage folks to to be proactive about that because, as I said, you' re paying too much right now and if not then just copse and shure. So you know it' s fall, two thousand and twenty one we can' t escape the pandemic coid. It has touched every facet as of our lives and, quite frankly, every corner of the globe has lasted much longer than anyone probably could have imagined in early two thousand and twenty. What have you seen within the the...

...workers compensation environment that in the reaction to Ovid? And where do you see this type of pandemic and potentially future pandemics? How do you see that maybe changing how we approach work is conversation in the future boy, a great question if we have a couple of hours to go through you neyer fee, for that the first all I got t understand what workers competition was coming from, and that was really coming from the the A perspective of for A hundred plus years, we were dealing with Musket Les sceleto conditions, which, for five hundred sand years, we' ve known what musketball skeletal conditions are: That ' s been workers compensation and now, all of a sudden there' s this new thing that came along just incredibly new disease. that was a morphing and changing and we did not know how to handle it. So workers cop that was this really static. Business, dealing with a very static type of medical condition, muscal skeletal stuff, is all of a sudden now have to adapt and evolve not of valve like revolutionize, how address claim and take in triage clean reporting time qualification, medical management, all that stuff essentially overnight, and for an order for an entitate for an industry. That is, excuse I think the industry really did a very credible job in adjusting this. Do we make mistakes? Oh Heck? Yes, we made a conomise, but in any situation like this, that is going to happen. I think, if you look at the data, what was what' s been pretty obvious is that most employers, most insurance companies or regulators et ce, have stepped out and done what they could, where they could to to make the pandemic to mitigate its impact on employers. Ron An occupational mess in perspective, they' ve opened up formularies, they' ve enabled care from through telle medicine, they' ve done as much as they could t to move in and make these things happen. What has also been really interesting in us have been some really good. Data coming out of CCI, indicating that claim denial rate for Ovid is about the same as a cling Danira from musculoskeletal condition. So there was this concern really on that employers and trance companies were going to sort a stiff arm and say no, that' s not work related well for all the clans reported that were credible. In other words, there was a positive test, etc. The acceptance rate is about the same so that concern that I think a lot of folks, including myself had was, was not about which, which is great a couple o other things is that I had thought that Covin would lead to extensions of disability duration for non Covic claims, because people just did not want to go to a healthcare provider. Well, that hasn' t been the case and that' s been proven from data from C R I and CCI Etcetera. So once again, I' m really happy to be wrong on that that that care continue going forward. I think the the move to to work places outside the office is not going to change. I mean you' re working from quote unquote home like non for thirty years, so it' s easy for me, but a lot of other people have sort of moved away and- and I would expect that that is going to continue. You know clearly in a in a manufacturing construction. Other type of you know: Health Care Delivery. Those things are different, but offices, the way workers compensation claims are going to be handled. A lot of that is being done remotely today and shockingly people still work hard and still get a lot of stuff done. So then the impact on workers cop is going to be as much in in how workers compensation operates from a claims underwriting management executive world, then in actually how the the risk that that we actually handle have few follow questions so and they were probably in different areas that we go first, one in reaction to your last comment and I'...

...ll go back to a question around Covin in a second when you change the work environment, you change the risk fact or you change the exposure. So I, as you shift to a work at home environment, doesn' t not complicate what one doesn' t doesn' t it reduce the the traditional kind of slipping falls? You know You might see in some industries and and exposures to certain aspects of the work environment being at home. Do do unit, anticipate that you may see a trend that will lower risk from just a change in environment alone, entirely possible. It' s also. If you know, if you slip and fall at home, how are you going to demonstrate that that is occupationally involved? I think that' s difficult to do and you know to their credit. I think most employers are doing what they can to know put in place of Ergonomics and equip people with the right working environment within the house to to to enable that. I think there will also be a reduction in certainly a production in claims associated with the work place because you' re, just not at the workplace, you' re not walking to you' re not driving from there to go some place else et ce, so that I think there will be a reduction, but that was a Rin. The low frequency low of severity industries now, like you, know, paper pushers, like I do so that I don' t think it ' s going to be that significant. I think, from to sort of push this thing along and I' m going to go ten gentil here on you, sorry, I think the biggest impact on workers cop in the not to dis a future potential impact is going to be if the infrastructure bill goes forward, there' s going to be a lot more construction, a lot more heavy industry, a lot more on shoring of heavy industry and those are high frequency, high severity type of businesses that you know just this whole development of green infrastructure. If improving the electric rate, all the stuff, we desperately need to do if those if that stuff becomes a reality. Two to three years from now, I think we' re going to see a bump up in claim frequency and claim severity from those industries which will far outweigh whatever happens to those of us who don' t work with their hands. That ' s a fantastic point, especially when you think the fact that we don ' t necessarily train individuals in a vote either of vocational or trade way, as we did so that you have that transferable skill, so that, if you are in a heavy and industry environment, well, maybe it' s transferable from what you' re doing previously. Now you may be bringing the visuals into that environment that I' ve never done that before great, that we have a job and a career path and ability to earn, but maybe not so great for your body being prepared and equip for that type of work and labor and may be exposing you to injuries that you know you maybe wouldn ' t have seen in years past. So it' s a fair point for sure. comety agree on that completely great yeah. I know it. I speak to it from even just seeing it within my own, my own family. You know individuals going from a: U K, O White Collar type of environment, to opening up the you know their own type of a business that more heavy labor and tent and seeing injuries associated with that that they have occurred. Otherwise, you know, regardless of that, but seemed to to move and act and be prepared than they were at sitting in a cubicle so and on coved you' d mentioned you mentioned kind of the durations being more in line than what you expected and I' m curious with the data that you' ve seen around either combines or the the long Holler Syndrome that we that we hear about. Has it been anything to say at one? Is there a correlation with is a push back on the correlation with it being the workers cop event that it was claimed to be originally a D and Two are even seeing that data in a in a prevalent standpoint, or is that more media driven from what you' re saying so I work the biggest issue, I think with coved is there' s so much misinformation out there about you know is a dangerous. is it not dangerous? Is The vaccine dangerous? Is it? Is it not dangerous? So you know the most important...

...thing I think is the folks need to go to the sources that are highly credible and get their own information. CDC is clearly one of them. Most of the major news outlets are also. You know very incredible whether it' s you know CBS NBC et ce, big newspapers, but so a couple things about coved one is that what we' re seeing today is representative of. What' s happened in the recent past and up until the delta area blew up in India, we thought we were on a really good pace to get back to normal delta. Varia came along and all of a sudden, it' s the same stuff. It' s like It' s ground, Hawk Gang, and now we have the mew variant, which is even more problematic, so I just hesitate to tort of up Pine based on looking historically at this, because the biggest problem we have right now is because of the large number of people who still are not vaccinated. The The virus is going to evolve in a way that makes it more efficient at infecting people. that' s just what it does. It' s a living quote, unquote a thing and that' s how it it succeeds. So what really scares me is that we will get something that a is more infectious than Delta, which is terrifying and be, is more deathly or has more side effects. We just don' t know if that' s going to happen, but given what We seen but delta in the view area that does scare me. So what I would suggest is employee of his managers need to be looking forward and saying: okay. This is where we are today, but we need to understand that we could well be in a different place. What would we have done eight months ago off? We knew Delta was coming okay, let' s think about that, and let' s take those lessons and and the potential applications for that are not going back to work any time in the reasonable future mandating vaccines, which a lot more employers are doing, which I completely and totally support enabling people who have had ovid to continue to work wherever that' s possible, but also understand that we do not know about long hall and what the issues are. I was just talking to my barber the other day and he has still has not got his sense of taste and smell back. Well. If you' ve got ovid- and let' s say you know, you' re a florist or a perfumer or a chef or something that' s to is going to have a really significant impact on your ability to continue and that' s just sort of one tiny example. There' s also incident reports of you now so called brain fog, anxiety, other issues that we have to be be very sensitive to, and I think workers comfo have to approach this from a from a science perspective, which is what is a science say, but unfortunately, there' s a very little science around long hall, so antitetanic have to make the decision. How are we going to approach these? Are we going to fight these claims because it' s there' s no science to back it up or are we going to say hey? This could well be related to Covin. Let ' s go ahead and help this patient. I would suggest that the latter makes more sense, because otherwise, eventually you since will probably catch up and you' re going to be responsible to most of those claims, anyways and it' ll, be a heck of a lot more expensive to pay for them retroactively than if you' ve gotten involved in the first place done the medical management help that that person get care and get get full back to work, so that my perspective is that you got to be prepared for rapid evolution of this for rapid change of this, and we just don' t know where it' s going. So, let' s look at what happened when Delta emerged, but we should have done them and I think we' ll be in a much better spot. You had me and transit, I mean You said some some fantastic things there that I think that we I can see that the good news for us, at least from my perspective. I do see organizations evolving in adapting to this, and I do see many that, were you know very adamant about. Let' s get back to what was the norm as quickly as possible. Saying we' ve benefited to some... by accelerating you know the art, Our adaption to this environment. Let ' s continue to focus on the future and not necessarily going back to the way things were- and I think you know, even outside of from a work environment perspective, some of the positives that we' ve changes that we ' ve seen is just more acceptance of environments that we wouldn' t have seen otherwise. So a great example for me is on a a large call and as some of the individuals had their children one having new born in her arms as we' re doing president you would not have. That would not have, unfortunately, would not have been accepted in years past, and so I think it' s allowed us to re, evaluate our priorities in a way that we wouldn' t have and to your point as an organizations as well look at themselves to say one was right by our employees to do. We want to look forward- and you know get ahead of this in a way that we can understanding. This is continuing to evolve. So thank you for that last question, for you would be you know. Probably one of the one of the the softer balls: If you had a this magic wand of things that you something that you just wished, you could change or wish that would be in place within the space. Is there anything that comes to mind and say you know we' re missing this or if we had this, it would transform. You know this, this current environment or any environment quit frankly. Well, it' s so I' ve got a bite. Seventeen, but I' ll. Try to Harry with that. I so I think we have to look at the successes we' ve had and so, for example, workers cop is an offen the line for good reason in some cases, industry, but look this industry has done and reducing over use of Obis we' ve cut out, probably a billion dollars in obiit spend which, in an industry as tiny as ours, which is less than one percent of US medical spend. That is a ton of dollars way. More importantly, though, is the positive impact that that has had on families on MOMS and DADS and societies and towns and everything else. So I think it' s a very difficult time on workers. Compensation because of code, because of a bunch of things, but every now and then I think we have to look over our shoulder and say hey, you know what we' re pretty darn good. We really took on this really difficult challenge, though Fed and we handle it correctly. We did the right thing and the vast majority of cases- and I have no problem pointing Olaf. That isn' t the case, but in the vast majority of cases we' ve done the right thing same thing with coved. In most cases we have done the right thing. Does that mean we cannot get better? Of course not. So then, one of the thing I would say is that what frustrates me most about this industry is the lack of basic understanding of the health characterise system. This industry looks at health care as a line item as numbers as dollars, and that is just totally wrong from my experience. Working with a medicatus plan, the level of sophistication and medical management, the plan on which, on the board of directors has is about fifteen years in front of walkers compensation, just in terms of value base care, understanding the application beven space, conical medicine, the apt of the you know, what' s happening with hospitals and health systems and how they' re incredibly sophisticated when it comes to billing and they very much recognize. WARPERS COMP is a very soft target and at the industry. We have been lazy and lackadaisical about that, because the amount of profit that hospitals and all systems are making off workers compensation is unconscious. If we as stewards of our employer customers, money, I think, need to do a much better job and really fundamentally understanding the scare delivery system and the impact that that has because if we had known that back when both pelts were emerging, we would have been on that even faster down being more. So I just look at that and say: How does it cautionary statement for me we weren' t prepared for Obelis, okay. So what' s the next thing, that' s going to hit us in terms of cost shifting, it' s definitely going to be hospitals and facilities. We got to be aware of that great excellent. Thank you Joe. Thank you...

...very much so joe. If folks want to reach out to connect or to reach out for potentially a speaking engagement, which I know you have a blog and you know like Dan and other other forms there any particular area that would be best sure, so the blog is joe for dotcom. Not a lot of joe is out there, so it' s the only one there and the websites health strategy ass, occom, and really appreciate the opportunity to engage with you mark great to see young professionals in this business as opposed to us all white haired, guys, ee think that we' re gonna be okay. Thank You O. Thank You. Thank You again and thank you all for listening to this episode of be honest line. You' ve been listening to beyond the claim, a podcast for risk and claims leaders to ensure you never miss an episode. Please subscribe to the show in your favorite podcast player. If you use apple podcast, we love for you to give us a quick rating for the show just tap the number of stars that you think the Podcastt deserves until next time stay curious and keep innovating.

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