Beyond the Claim
Beyond the Claim

Episode 1 · 1 month ago

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

ABOUT THIS EPISODE

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 joepaduda.com  

- Visit healthstrategyassoc.com  

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 thisindustry is the lack of basic understanding of the health characterdelivery system. This industry looks at health care as a line item, as numbersas dolls. You're listening to beyond the claim, the show for forwardthinking, 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 JoePadua. 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 ofHealth Strategy Associates. Joe, welcome. Thank you for joining us today. RightMark, really appreciate you for bringing me on today. Thanks for the honor. Absolutely. So Joe, for those of us out there, those folks out there thataren'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 Iknow an awful lot about very little. Very little. Agreeing game workers, CO,medical management, space- I've been doing this for thirty plus years wasinvolved 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 themedical delivery. Part of the work rock work comply, but I'm also I sit on theboard 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 askyou: I was a preparation for a conversation checking out some of yourprofile, and I saw you have a degree in anthropology. So tell me about yourjourney here. How do you go from that degree to the the managed Care WorkersConversation Space? Well, I was not much of a student at my allamaterSyracuse and I was in the rolling team there and had a fraternity there. Soanthropology was a way for me to get a degree while focusing on things that Ithought were more important at the time but anthropology. I think it's sort ofthe study of humanity and how humanity is of all, and I think it's the besttraining you could have for working in any business or any organization,because it's really all about trying to understand what drives people and whatmotivates people and what the taboos are. What how to how change occurs incultures- and it also makes you sort of open up and understand that yourperspective is your perspective and marks perspective is his and yourwatchers perspectives are there said you have to respect those thosedifferences 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 hadmentioned earlier. So what's that what did that journey go from Syracuse totoday? Well, I went to graduate school and I was going to get into the wholecorporate health promotion. Fitness business, I'm not halfway through orrealize that there was no money in that. So I I I yes quickly over into what wascalled cost containment back then, and I got into health care, costcontainment and ended up going to work for a subsidiary AIG that was involvedin that business way back in the mid the late s went on to the travelersliberty usual as well, and then I had the opportunity to work for unitedhealth care, and after doing that, for about a year, I decided that I was notthe kind of person who needed to work in a big organization. Actually, theorganization 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 rememberand that everyone stand up that was going to select that as a degree andhalf the half of the of the freshman population stood up is like. I got tofind 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 abit of publishing and speaking...

...engagements as as you look at the spacetoday, you know what is what's the current state of affairs: Where do yousee there being opportunities still whether it relates to the pandemic ornot whether I be later related to Costantin or not? What really keeps youup at night? As you think you know, we've got to kind of move this needlefor 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 ratespremiums et C are still significantly higher than they should be, and it wasa recent C N CCI report that came out and essentially demonstrated that youknow Roveres erved, vice somewhere north of ten billion dollars, which, ineight five billion dollar industry is a lot in line, and I believe that that'sdue to and there's some data that actually backs this up, but I calledthe Opio and hang over. You know ten. Twelve thirteen years ago we were justgetting into sort of the Opio era and workers compensation. They were reallystarting to be over prescribed and at onee point you know about forty percentof drug cost were for opioids and similar drugs, but o boots, increasedclaim, duration, add to medical expenses, increase, indentity and andmedical costs. So there was this external exogenous factor that wasdriving workers, compensation, clean costs higher, and I think that was abig reason that medical cost we're going out. Medical inflation was goingout, 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 opioidswere having from a financial perspective, will leave aside thesociety and then pack etcetera over the last six seven eight years the industrysaid a great job in reducing unnecessary in appropriate use ofopiate. To the point now where it's about seventeen percent of of themedical stuff part in pharmacy, cal spent so what's happening. How isactual are still looking at the Review Mirror and they think that this andtheir numbers indicate that there's still this opio problem. Well, thatproblem is a lot smaller now than it was so that's. I think why you knowcombined Rictus are in the high eights, and you know when you look at totaltotal profits of the business. It's been historically I for a few years, somy sense is that clink coster still projected to be too high et ca becauseof this opio overhead. This is going to end, I would say, probably in the nextcouple of years or so, the takeaway from that is. The church rates arestill too high, because insurance carriers are looking at the review,mirror and don't understand the impact that the Redet, the great job they'vedone in reducing opioids, has has had that's a great impact of that as athinkin. This way so and our other people have differentopinions, which I certainly respect your race. You know the first question.The first thing, I would say, is: Have you guys factored in the overallreduction, no pois and how that's impact in our claims and how claimspictures different today than it was historically so, and you do think, there'll be a selfcorrection. Or do you think that it will require some kind of coordinatedcost containment initiative? Great Question? I think that employersbrokers, consultants need to push back on insurance carriers, stop lost,curious excess carriers and make sure that they are factoring in thefundamental 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 dothat. So I would encourage folks to to be proactive about that because, as Isaid, 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 pandemiccoid. It has touched every facet as of ourlives and, quite frankly, every corner of the globe has lasted much longer than anyoneprobably could have imagined in early two thousand and twenty. What have youseen within the the workers...

...compensation environment that in thereaction to Ovid? And where do you see this type of pandemic and potentiallyfuture pandemics? How do you see that maybe changing how we approach work isconversation in the future boy, a great question if we have a couple of hoursto go through you neyer fee, for that the first all I got t understand whatworkers competition was coming from, and that was really coming from the theA perspective of for a hundred plus years, we were dealing with Musket Lessceleto conditions, which, for five hundred sand years, we've known whatmusketball skeletal conditions are: That's been workers compensation andnow, all of a sudden there's this new thing that came along just incrediblynew disease. That was a morphing and changing and we did not know how tohandle it. So workers cop that was this really static. Business, dealing with avery static type of medical condition, muscal skeletal stuff, is all of asudden now have to adapt and evolve not of valve like revolutionize, howaddress claim and take in triage clean reporting time qualification, medicalmanagement, all that stuff essentially overnight, and for an order for anentitate for an industry. That is, excuse me anything, but I M adaptableand you know, wrap good rapid change. I think the industry really did a verycredible job in adjusting this. Do we make mistakes? Oh Heck? Yes, we made aconomise, 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 mostemployers, most insurance companies or regulators et ce, have stepped out anddone what they could, where they could to to make the pandemic to mitigate itsimpact on employers. Ron An occupational mess in perspective,they've opened up formularies, they've enabled care fromthrough telle medicine, they've done as much as they could t to move in andmake these things happen. What has also been really interesting in us have beensome really good. Data coming out of CCI, indicating that claim denial ratefor Ovid is about the same as a cling Danira from musculoskeletal condition.So there was this concern really on that employers and trance companieswere going to sort a stiff arm and say no, that's not work related well forall the clans reported that were credible. In other words, there was apositive test, etc. The acceptance rate is about the same so that concern thatI 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 wouldlead to extensions of disability duration for non Covic claims, becausepeople just did not want to go to a healthcare provider. Well, that hasn'tbeen 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 isnot going to change. I mean you're working from quote unquote home likenon for thirty years, so it's easy for me, but a lot of other people have sortof moved away and- and I would expect that that is going to continue. Youknow clearly in a in a manufacturing construction. Othertype 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 isbeing done remotely today and shockingly people still work hard andstill get a lot of stuff done. So then the impact on workers cop is going tobe as much in in how workers compensation operates from a claimsunderwriting management executive world, then in actually how the the risk thatthat we actually handle have few follow questions so and they were probably indifferent areas that we go first, one in reaction to your last comment andI'll go back to a question around Covin...

...in a second when you change the workenvironment, you change the risk fact or you change the exposure. So I, asyou shift to a work at home environment, doesn't not complicate what one doesn'tdoesn't it reduce the the traditional kind of slipping falls? You know youmight see in some industries and and exposures to certain aspects of thework environment being at home. Do do unit, anticipate that you may see atrend that will lower risk from just a change in environment alone, entirelypossible. It's also. If you know, if you slip and fall at home, how are you going to demonstrate thatthat is occupationally involved? I think that's difficult to do and youknow to their credit. I think most employers are doing what they can toknow put in place of Ergonomics and equip people with the right workingenvironment within the house to to to enable that. I think there will also bea reduction in certainly a production in claims associated with the workplace because you're, just not at the workplace, you're not walking to you'renot driving from there to go some place else et ce, so that I think there willbe a reduction, but that was a Rin. The low frequency low of severityindustries now, like you, know, paper pushers, like I do so that I don'tthink it's going to be that significant. I think, from to sort of push thisthing along and I'm going to go ten gentil here on you, sorry, I think thebiggest impact on workers cop in the not to dis a future potential impact isgoing to be if the infrastructure bill goes forward, there's going to be a lotmore construction, a lot more heavy industry, a lot more on shoring ofheavy industry and those are high frequency, high severity type ofbusinesses that you know just this whole development of greeninfrastructure. If improving the electric rate, all the stuff, wedesperately need to do if those if that stuff becomes a reality. Two to threeyears from now, I think we're going to see a bump up in claim frequency andclaim severity from those industries which will far outweigh whateverhappens to those of us who don't work with their hands. That's a fantasticpoint, especially when you think the fact that we don't necessarily trainindividuals in a vote either of vocational or trade way, as we did sothat you have that transferable skill, so that, if you are in a heavy andindustry environment, well, maybe it's transferable from what you're doingpreviously. Now you may be bringing the visuals into that environment that I'venever done that before great, that we have a job and a career path andability to earn, but maybe not so great for your body being prepared and equipfor that type of work and labor and may be exposing you to injuries that youknow you maybe wouldn't have seen in years past. So it's a fair point forsure. comety agree on that completely great yeah. I know it. I speak to itfrom even just seeing it within my own, my own family. You know individualsgoing from a: U K, O White Collar type of environment, to opening up the youknow their own type of a business that more heavy labor and tent and seeinginjuries associated with that that they have occurred. Otherwise, you know,regardless of that, but seemed to be related to the fact that this is just anew request from their body to move and act and be prepared than they were atsitting in a cubicle so and on coved you'd mentioned you mentioned kind of the durations being more in line than what youexpected and I'm curious with the data that you've seen around either combinesor the the long Holler Syndrome that we that we hear about. Has it beenanything to say at one? Is there a correlation with is a push back on thecorrelation with it being the workers cop event that it was claimed to beoriginally a D and Two are even seeing that data in a in a prevalentstandpoint, or is that more media driven from what you're saying so Iwork the biggest issue, I think with coved is there's so much misinformationout there about you know is a dangerous. Is it notdangerous? Is The vaccine dangerous? Is it? Is itnot dangerous? So...

...you know the most important thing Ithink is the folks need to go to the sources that are highly credible andget their own information. CDC is clearly one of them. Most of the majornews outlets are also. You know very incredible whether it's you know CBSNBC et ce, big newspapers, but so a couple things about coved one is thatwhat we're seeing today is representative of. What's happened inthe recent past and up until the delta area blew up in India, we thought wewere on a really good pace to get back to normal delta. Varia came along andall of a sudden, it's the same stuff. It's like it's ground, Hawk Gang, andnow we have the mew variant, which is even more problematic, so I just hesitate to tortof up Pine based on looking historically at this, because the biggest problem we have right nowis 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 atinfecting people. That's just what it does. It's a living quote, unquote athing and that's how it it succeeds. So what really scares me is that we willget 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'sgoing to happen, but given what we seen but delta in the view area that doesscare me. So what I would suggest is employee of his managers need to belooking forward and saying: okay. This is where we are today, but we need tounderstand that we could well be in a different place. What would we havedone eight months ago off? We knew Delta was coming okay, let's thinkabout that, and let's take those lessons and- and let's apply him to towhere we're going forward and the potential applications for that are notgoing back to work any time in the reasonable future mandating vaccines,which a lot more employers are doing, which I completely and totally supportenabling people who have had ovid to continue to work wherever that's possible, but alsounderstand that we do not know about long hall and what the issues are. Iwas just talking to my barber the other day and he has still has not got his sense oftaste 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 tohave a really significant impact on your ability to continue and that'sjust sort of one tiny example. There's also incident reports of you now socalled 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 scienceperspective, which is what is a science say, but unfortunately, there's a verylittle 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 becauseit's there's no science to back it up or are we going to say hey? This couldwell be related to Covin. Let's go ahead and help this patient. I wouldsuggest that the latter makes more sense, because otherwise, eventuallyyou since will probably catch up and you're going to be responsible to mostof those claims, anyways and it'll, be a heck of a lot more expensive to payfor them retroactively than if you've gotten involved in the first place donethe medical management help that that person get care and get get full backto work, so that my perspective is that you got to be prepared for rapidevolution of this for rapid change of this, and we just don't know where it'sgoing. So, let's look at what happened when Delta emerged, but we should havedone them and I think we'll be in a much better spot. You had me andtransit, I mean you said some some fantastic things there that I thinkthat we I can see that the good news for us, at least from my perspective. Ido see organizations evolving in adapting to this, and I do see manythat, were you know very adamant about. Let's get back to what was the norm asquickly as possible. Saying we've...

...benefited to some degree byaccelerating you know the art, Our adaption to this environment. Let'scontinue to focus on the future and not necessarily going back to the waythings 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 moreacceptance of environments that we wouldn't have seen otherwise. So agreat example for me is on a a large call and as some of the individuals hadtheir children one having new born in her arms as we're doing president youwould not have. That would not have, unfortunately, would not have beenaccepted in years past, and so I think it's allowed us to re, evaluate ourpriorities in a way that we wouldn't have and to your point as anorganizations as well look at themselves to say one was right by ouremployees to do. We want to look forward- and you know get ahead of thisin a way that we can understanding. This is continuing to evolve. So thankyou for that last question, for you would be youknow. Probably one of the one of the the softer balls: If you had a this magic wand of things that yousomething that you just wished, you could change or wish that would be inplace within the space. Is there anything that comes to mind and say youknow 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 soI've got a bite. Seventeen, but I'll. Try to Harry with that. I so I think we have to look at the successeswe've had and so, for example, workers cop is an offen the line for goodreason in some cases, industry, but look this industry has done andreducing over use of Obis we've cut out, probably a billion dollars in obiitspend which, in an industry as tiny as ours, which is less than one percent ofUS 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 andsocieties and towns and everything else. So I think it's a very difficult timeon workers. Compensation because of code, because of a bunch of things, butevery now and then I think we have to look over our shoulder and say hey, youknow what we're pretty darn good. We really took on this really difficultchallenge, though Fed and we handle it correctly. We did the right thing andthe vast majority of cases- and I have no problem pointing Olaf. That isn'tthe case, but in the vast majority of cases we've done the right thing samething with coved. In most cases we have done the right thing. Does that mean wecannot get better? Of course not. So then, one of the thing I would say isthat what frustrates me most about this industry is the lack of basicunderstanding of the health characterise system. This industrylooks at health care as a line item as numbers as dollars, and that is justtotally wrong from my experience. Working with a medicatus plan, thelevel of sophistication and medical management, the plan on which, on theboard of directors has is about fifteen years in front of walkers compensation,just in terms of value base care, understanding the application bevenspace, conical medicine, the apt of the you know, what's happening withhospitals and health systems and how they're incredibly sophisticated whenit comes to billing and they very much recognize. WARPERS COMP is a very softtarget and I think, to a large extent, at I'll point the finger at theindustry. We have been lazy and lackadaisical about that, because theamount of profit that hospitals and all systems are making off workerscompensation is unconscious. If we as stewards of our employer customers,money, I think, need to do a much better job and really fundamentallyunderstanding the scare delivery system and the impact that that has because ifwe had known that back when both pelts were emerging, we would have been onthat even faster down being more. So I just look at that and say: How does itcautionary statement for me we weren't prepared for Obelis, okay. So what'sthe next thing, that's going to hit us in terms of cost shifting, it'sdefinitely going to be hospitals and facilities. We got to be aware of thatgreat excellent. Thank you Joe. Thank...

...you very much so joe. If folks want toreach 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 formsthere any particular area that would be best sure, so the blog is joe fordotcom. Not a lot of JOE is out there, so it's the only one there and thewebsites health strategy ass, occom, and really appreciate the opportunityto engage with you mark great to see young professionals in this business asopposed 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 thisepisode of be honest line. You've been listening to beyond theclaim, a podcast for risk and claims leaders to ensure you never miss anepisode. Please subscribe to the show in your favorite podcast player. If youuse apple podcast, we love for you to give us a quick rating for the showjust tap the number of stars that you think the Podcastt deserves until nexttime stay curious and keep innovating.

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