Archive for March, 2008

Cavalcade of Risk

Wednesday, March 12th, 2008

A fresh Cavalcade of Risk is posted and awaiting your perusal – it’s the 47th edition, and ably hosted by John Cogan at the Regulating Health Insurance blog. John is the Executive Assistant for Policy and Program Review for the Rhode Island Office of the Health Insurance Commissioner and his blog focuses on health insurance, health policy and health law issues.

The best health care plan in America

Tuesday, March 11th, 2008

In 1986, US workers’ compensation medical costs were 44% of total incurred loss dollars. Ten years later, the percentage had grown to 48%. By 2006, medical costs amounted to 58% of total loss costs. And today, nearly a third of the way through 2008, they hover around 60%. The annual workers’ comp medical cost rate of growth is nearly double the painfully steep rate of growth in the Group Health arena, and it has been so since 1996 (Source: NCCI and Insurance Information Institute).
And why not? Workers’ compensation health care is the best health care plan in America, maybe even the world. Injured employees pay no premiums, co-pays, or deductibles. Prescription drugs are free, and tax-free indemnity payments cover most lost wages. No wonder acute and traumatic injuries cost nearly 50% more than similar injuries in the group health world, according to an NCCI Research Brief (Workers Compensation vs. Group Health: A Comparison of Utilization.)
No wonder chronic, soft tissue, musculoskeletal injuries cost more than double similar injuries in the group health world. And the disparity is probably even more than that, because NCCI could only examine and compare cost data for the first three months following injuries. Why? Because workers’ compensation tracks injuries by claim numbers, but group health does not. Therefore, in group health, the further one gets from the date of injury, the harder it is to tie rendered medical services to a particular injury.
It’s no secret that over-utilization is the biggest reason that workers’ comp medical costs are so much higher than costs in group health. True, on the whole and with some notable exceptions, workers’ comp medical fee schedules have caused prices for individual medical services to be only slightly higher than individual services in group health, but in nearly every part of the country workers’ comp utilization dwarfs that of group health. Makes you wonder what the workers’ comp case management and utilization review companies are actually doing, doesn’t it?
The difference here is stark. The group health plans put systemic fences around utilization. Workers’ comp does not. If you twist your knee mowing the lawn out in the back forty on a Saturday morning and require arthroscopic knee surgery, your health plan will approve a certain number of visits to a rehab facility after surgery, normally six or seven. After that, you’ll need approval for any more. Of course, you can always choose to self-pay. But in the world of workers’ compensation, that’s one decision you don’t have to make.
Because health care utilization and costs have become such large issues in workers’ compensation, as well as group health, and because in this frenzied Presidential election season that seems to never end health care has become quite the political football, over the coming days I’m going to examine specific parts of it further. Next up – a bit of analysis of the current mantra all current presidential candidates seem to agree on (some might call it a “lie,” but I couldn’t possibly go that far), namely, that here in America “we have the best health care in the world.”
If only that were true.

News roundup: transportation fatalities, managed care, combustible dust, and common WC mistakes

Monday, March 10th, 2008

Transportation safety – Celeste Monforton at The Pump Handle talks about when a work-related traffic fatality is not a work-related traffic fatality in her thoughtful post When the Road is Your Workplace. The Bureau of Labor Statistics counts on-the-job traffic fatalities in its annual census of fatal occupational injuries – and last year, transportation-related fatalities represent ed 40% of all work deaths, or 2,413 deaths – the single largest source of fatalities. She raises an interesting question:

So, if transportation incidents are the single biggest cause of work-related FATAL injuries, does OSHA consider them work-related? No, not really.
Here’s why I say that:
OSHA’s reporting regulations for fatalities (29 CFR 1904.39) does not require employers to report to OSHA a worker’s death in a motor vehicle accident. Specifically, the regulation says:
“If the motor vehicle accident occurs on a public street or highway, and does not occur in a construction work zone, you do not have to report the incident to OSHA.”

This brings to mind the old management maxim of what gets measured gets done. Monforton expresses dismay that public safety agencies aren’t counting these incidents as work-related because the omission may mean a lack of focus on how to prevent at least a portion of these deaths.
Managed care – Joe Paduda offers a great market overview of the managed care side of workers comp. He notes that the workers comp medical market totaled about $27 billion in 2007 and is increasing at around 8% per year. He breaks down the medical spend into various segments and lists key players and issues. It’s well worth a read.
Web 2.0 workplace safetyOSHA Underground tells us that so far in 2008, there have been 9 combustible dust-related explosions or fires at workplaces, and harnesses the advantages of Web 2.0 technology to plot these combustible-dust related incidents out on Google map. It’s a great visualization tool that might help to increase public awareness.
Common mistakesAmerican Printer features a good article on 8 major workers comp mistakes by Frank Pennachio. It highlights common errors that employers make in overseeing their workers comp program, including confusing lower premium rates with cost reductions, focusing on direct costs only, separating workers compensation from employee retention, and measuring the wrong thing. We agree with many of these points. Many employers think of workers comp as a financial issue but we disagree. It is really a people issue, and when you manage the people component well, you will generally have a far more favorable financial outcome.
Risk manager’s role – Just what does a risk manager do? Rita Schwab of MSSPNexus discusses the hospital risk manager’s role using the Yale School of Medicine / Yale New Haven Hospital’s definition of the role. She notes that roles can vary considerably from organization to organization.
March is Workplace Eye Health and Safety Awareness MonthPrevent Blindness reminds us that every year, 800,000 eye injuries occur on the job, including 36,000 that require time off from work. It’s a good month to review your workplace eye safety programs.

Wonk, Wonk: Health Wonk Review is Here

Thursday, March 6th, 2008

Health Wonkery runs a wide gamut this week: we have big Pharma front and center with cowardly marketing, poison in the pills and a controversial study that finds a racial factor in whether meds are taken properly; we have extremely divergent views on health care reform, from single payer and a big role for government to status quo and no role for government; we have Canada backpedaling on a call for fewer doctors; and finally, a story about bad boys (and girls) being bad: incompetent agent, inattentive insured, aggressive insurer. Never a dull moment in wonk world!
Let’s get to it.
Taking the “S” out of STDs? Fard Johnmar, writing at Envisioning 2.0, focuses on an interesting side of the Gardasil debate: Merck’s unwillingness to use “sex” to sell its new product for preventing sexually transmitted diseases (STDs). Fard speculates that fear of the “abstinence only” crowd may be behind the strategy. It’s ironic, of course, that we live in a culture willing to use sex to sell everything from cars to shampoo.
Terror in small places:Here are two terrifying posts (one and two) from Roy Poses, which raise the issue of what’s in those little pills we routinely swallow:

The story began with a sudden increase in the rate of severe adverse effects occurring after the administration of heparin, a 70+ year old anti-clotting drug. Attention first focused on a Baxter International facility in New Jersey, but then it turned out the heparin was not really made there, and was traced to a factory in China, which, it turns out, was never inspected by the US FDA or any government agency from the US or China. Furthermore, that factory actually didn’t make the heparin either, but obtained heparin from middle-men in China, who in turn apparently got the heparin from a number of suppliers, including tiny “workshops,” where conditions were unsanitary and primitive, and which were never inspected by anyone. And the top leaders of the American companies involved denied they actually knew where the heparin was coming from. This sorry tale of mismanagement raises doubt about the most basic quality of the US (and world) drug supply, so in some ways is even more serious than most of the cases heretofore reported on Health Care Renewal.

White Collar Racketeering: New York Personal Injury Attorney offers two hits (one and two) with anti-Kudos all around: Allstate, along with doctors and medical consulting companies, was sued for for racketeering for doing rigged “independent” medical exams to cut short payments to treating doctors. This suit follows by one month a similar one against State Farm.
What consumers want: Jane Sarasohn-Kahn at Health Populi finds much wisdom in a Deloitte survey regarding health insurance. Most Americans are looking for a consumer driven product – as opposed to the industry-driven products currently available.
Heart Failure and Race: Jason Shafrin at Healthcare-economist explores the causes of high chronic heart failure in racial minorities. A paper by Emilia Simeonova claims that 5% is due to differences in doctor quality, 20% is due to differences in socio-economic factors, but vast majority of the mortality differences are due to the fact that blacks are less likely to take their medication than whites.
Medicare Advantage (or Disadvantage): David Harlow at health care law blog examines the question of whether higher costs for Medicare Advantage plans are excessive or worthwhile.
Bad Boys and Girls: Henry Stern at Insureblog presents “Bad Boys, Bad Boys, Whatcha Gonna Do When They Come for You?” He asks, “what do an incompetent insurance agent, an unscrupulous client and a possibly negligent insurer have in common?”
Aids in Africa: GrrlScientist at Living the Scientific Life reviews the book The Invisible Cure: Africa, the West, and the Fight Against AIDS. The book, by Helen Epstein, is a clear-eyed look at the African AIDS epidemic and the West’s often misguided attempts to assist in this battle. Grrlscientist highly recommends the book. We highly recommend her review, which summarizes the aids crisis in its most potent environment.
Frivolous Lawsuits: Jose DeJesus MD presents Discouraging Frivolous Malpractice Lawsuits posted at Physician Entrepreneur.
Single Payer System: Ian Welsh at Firedoglake explores the ethics and politics of a single payer system and opines that, one way or another, we are all in this together.
Too Many/Too Few Docs? From our neighbor to the north, Sam Solomon of Canadianmedicineblogspot ponders the Canadian shift from “too many docs” to “not enough.” He finds a muddied logic in the twists and turns of Canadian public policy.
Policy Debate: Jane Hiebert-White of Health Affairs Blog hosts a debate between Rep. Jim Cooper (D-TN) and Rep. Paul Ryan (R-WI) on the rapidly rising health spending projections–is it a market issue or government problem? Ryan and Cooper could hardly be further apart in their views – in itself an indication of how far we are from solving the national health care problem.
Not All Policies are Alike: Louise at Colorado Health Insurance Insider Blog challenges the notion that health insurance is a digital switch, where people either have it or do not. She finds many variations in coverage and deductibles. In the current market, there are many sizes and some don’t fit anyone at all.
Local Solutions? Which leads us to Drew Weilage at Our Own System. Drew thinks a global solution is simply out of reach. He recommends solving problems locally. (After reading the two congressional entries above, you might be inclined to agree.)
That’s it for this week. Assuming all these problems will not be resolved in the next few days, Health Wonk Review will back at it soon. Stay posted.

Bullshit as Science: A Test for Malingerers

Wednesday, March 5th, 2008

Paul Lees-Haley, PhD, is a psychologist who has come up with a 43 question test to separate the truly disabled from malingerers. Lees-Haley is either a genius or a pompous fraud right out of Mark Twain. Read on and decide for yourself. (This posting is based upon an article by David Armstrong in the Wall Street Journal, which limits access to subscribers.)
Lees-Haley studied the Minnesota Multiphasic Personality Inventory (MMPI), a standard tool for determining personality characteristics. He isolated 43 questions that he believes, taken together, clearly separate the truly disabled from malingerers and frauds. Lees-Haley’s brainchild, dubbed the “Fake Bad Scale” test, was developed in 1991 and is finding its way into courtrooms around the country. Lees-Haley is available to testify in person on behalf of insurance companies as an expert witness. He charges $3,500 to evaluate a claimant and $600 per hour for depositions and testimony. Worth every penny, I’m sure, if his testimony results in the denial of benefits to a claimant.
Testing the Test
Below you will find a sample of questions from the test, requiring a “True” or False” response. A “T” before the question indicates a “true” response is indicative of malingering. Likewise for “false.”
F My sex life is satisfactory.
T I have nightmares every few nights.
F I have very few headaches.
F I have few or no pains.
T I have more trouble concentrating than others seem to have.
T I feel tired a good deal of the time.
F I am not feeling much pressure or stress these days.
You don’t need a PhD in psychology to identify the ambiguity and unfairness in these questions, which are typical of the test as a whole. In the aftermath of an injury, someone might well feel stressed out, have difficulty concentrating, be tired much of the time and have frequent headaches. These responses do not necessarily indicate malingering. They can just as easily be valid indicators of post-traumatic response to injury. The “Fake Bad Scale” fails to account for anything that might have happened in the real world. Using this corrupt measure, every survivor of the 9/11 attacks would be deemed a “malingerer.”
Fortunately, the validity of the test has come under fire. A number of courts have thrown it out. That’s the good news. The bad news is that untold numbers of people who have answered these questions honestly have ended up being labeled (and libeled) as “malingerers.” Shame on the attorneys who rely on this phony science, and shame on the insurance carriers who retain them. And double shame to the originators of the MMPI, who have formally given their stamp of approval to this inept tool. To be sure, we all know that there are malingerers out there: but the “Fake Bad Scale” is no help whatsoever in singling them out.
Revised March 10, 2008.

Farewell to a Management Guru

Tuesday, March 4th, 2008

Joe Juran died this week, at the ripe age of 103. You may or may not know him by name, but his remarkable contributions to management are visible in worksites around the globe. In 1937, he coined the Pareto Principle, also known as the 80-20 rule, which states that 80% of effects come from 20% of causes. As a theory it achieved a sort of universality that could be applied to almost anything, from 20% of customers buying 80% of products, to 80% of production errors being made by 20% of workers, or 80% of the medical costs deriving from 20% of the patients.
Juran’s story, summarized nicely by Claudia Luther in the Los Angeles Times, is so classically American, it seems a cliche. He was born Dec. 24, 1904, in Braila, Romania, the son of a cobbler. When he was 5, his father left for the United States to try to improve the family’s financial situation. (Had his father stayed put in Romania, Joe would have perished in the Holocaust, his name – and his contributions – erased from history).
Small, wiry and smart, Joseph went to work when he was 8, driving a team of horses, selling shoes and bookkeeping for a local icehouse, among many other jobs. The first in his family to attend college, Juran earned a bachelor’s degree in electrical engineering at the University of Minnesota and a law degree at Loyola University. In 1924, he went to work for Western Electric’s Hawthorne plant in Cicero, Ill.
At that time Joe entered the workforce, quality control generally meant inspection: the products were made, inspected and, if they didn’t make the grade, rejected. Juran thought this was backward, that quality should be instilled long before the product got made.
In centuries past, “the typical craftsman was his own customer, over and over and over again,” Juran told Jane Gaboury in an interview for the Institute of Industrial Engineers.
“That is to say, because the craftsman himself performed every step of the process of, say, barrelmaking, he could see and correct whatever mistakes he made along the way, and avoid them the next time,” Juran said.
That ability was lost as manufacturing became compartmentalized. Juran’s solution was to re-empower the managers and workers who had been disempowered by the manufacturing process.
The Making of Japan
Joe was part of the team of consultants who revolutionized manufacturing in Japan. Along with W. Edwards Deming, Philip Crosby and Armand Fiegenbaum, Joe helped transform “made in Japan” from an insult to the highest possible compliment.
“The Japanese found they couldn’t sell their products because they had a very bad quality reputation,” Juran told Industrial Engineer magazine in a 2002 interview. “Of course when you can’t sell your product the chief executives are going to move in, and that’s what happened.” With the help of Juran and the other consultants, senior management embedded the “quality” message in every aspect of the manufacturing process.
Juran brought a uniquely practical perspective to his work. He believed that the human factors in production were paramount, especially the work of managers, and that quality problems should be solved systemically. Juran focused on the fundamental sequence in production management: market research, product design, product development, production and sales. He believed that quality work had to be properly valued by everyone involved – from the lowest-level worker to the CEO.
Joe Juran’s business education began behind a set of horses when he was not quite 10 years old. It ended, finally, after nearly a century of paying attention in his idiosyncratic and brilliant way. If the goal of life is to be of use, then Joe Juran lived a very good life indeed.

The Most Dangerous Job in Philadephia?

Monday, March 3rd, 2008

If you were to guess which jobs for the city of Philadelphia resulted in the most workers comp claims, you’d probably start with police and fire. These are high risk jobs, for sure, but the losses in these departments pale beside those of the Parking Authority. Patrick Kerkstra at provides the numbers on the cost per claim:
: Firefighters $1,084
: Police $833
: Parking Authority $1,558
The Authority’s risk management director, Allen Dunkelberger, thinks that they have a culture problem. “Sometimes people don’t want to work.” The agency has spent $5.8 million settling comp claims over the last four years. At this point, Dunkelberger cannot tell how much of that was spent on legitimate claims.
He told of one “frequent flyer” who filed claims for being bitten by a spider. Four times. Try as they might, they could not find any spiders in the building where the employee worked.
To be sure, there are significant risks in work performed by the authority: motor vehicle accidents; long hours on foot; slips and falls on icy sidewalks. To which we might add the open-ended risk of motorist rage, where parking enforcement officers (formerly known as “meter maids”) are assaulted after vehicles have been tagged.
Any review of the risks in authority jobs must also take into account the stress: the work of the authority is generally despised by the public, who have to pay the fines for exceeding time on meters and who have to retrieve their towed vehicles from remote parking lots. These are stress jobs with a capital “S.”
A Culture of Abuse
Kerkstra’s article presents images of a work culture run amok. At the top of the food chain, you have problems in the administrative ranks, with the extensive use of high-priced consultants, high salaries and a fleet of SUVs. This type of conspicuous consumption does not go unnoticed by the rank and file. They want their piece of the action; if it involves extending vacation time through the use of workers comp, so be it.
Then there is the authority’s attempt to reduce losses through the use of temporary modified duty. It’s not a model program, to say the least:

The program is reviled by rank-and-file authority workers, and little wonder. It typically consists of standing watch outdoors at authority impoundment lots, often during late-night and early-morning hours.
“Basically you sit there in the cold, in the rain, from 8 pm to 4 am doing nothing,” said an authority parking-enforcement officer, who asked to remain anonymous out of fear of retribution. “It’s a punishment.”
Dunkelberger knows that the..alternative duty is loathed, but he makes no apologies.
“There are some people here who’ve had literally a dozen workers’ comp claims,” he said. “They’re going to be inherently negative about any method we have for trying to deal with them.”

Note to Dunkelberger: Alternative duty should never be used as a punishment. A punitive program simply reinforces the negative work culture. The authority needs to learn from Ohio State University, whose exemplary program we blogged just last week. Use alternative duty as an incentive for full recovery. Place injured (even allegedly injured) employees into useful positions where their time is valued and their contributions are real. You cannot punish people into recovering; you have to support and nurture them. Modified duty without respect and compassion is ultimately worse than no modified duty at all.
The high cost of comp is symptomatic of much larger culture issues within the organization. There are many paths to improvement, but punishing injured employees by isolating them at night in parking lots is certainly not one of them. That’s a “solution” that will make the problem worse.
The work culture needs improvement, so fix it. Good employees need to be rewarded; the bad eggs need to be terminated. Senior management needs to clean up its act. Once these fundamental changes take place, workers comp will no longer be an issue. Under a positive work culture, modified duty will no longer be viewed as a punishment. It will be what it is supposed to be: a clear, well-lit path for returning valued employees as quickly as possible to their full duty jobs.