Archive for May, 2017

Eight Essential Steps To Controlling Workers’ Compensation Costs: Steps Three Through Five

Wednesday, May 31st, 2017

Yesterday, we began our Eight Essential Steps series with Steps One and Two, making a commitment and focusing on lost time. Today, we’ll tackle Steps Three through Five.

Step 3 – Develop an injury action plan

Many employers think that when an injury occurs responsibility for getting the injured worker back to work shifts to the claims adjuster. Nothing could be further from the truth, and it is this basic misunderstanding that causes many claims to deteriorate with oftentimes negative consequences for both worker and employer.

The claims adjuster’s job is to determine compensability, coordinate benefits, follow the law and work within it and the workers’ compensation insurance contract to resolve the claim satisfactorily. And while adjusters play a vital role in the process, they can never be your human resource director.

Misunderstanding the role of the adjuster creates an atmosphere in which injured employees are left to drift, groping their way through a quagmire of medical services, uncertain benefits and a cloudy future. In fact, a truism in workers’ compensation is, “When a claim goes south, costs go north.” As the employer, you need to structure a clearly defined path from the moment of injury through early return to work and back to full employment. What you do or don’t do in the first few hours after an injury has a significant impact on your ultimate costs.

Employers need to create a turnkey action plan – a clear set of policies, procedures and expectations with supporting tools and documentation. The plan must include a way to stay in continuous contact with injured workers throughout the recovery process, keeping employees connected to the organization and motivated to return to work.

Step 4 – Establish relationships with high-quality medical providers

A close relationship with medical providers of exceptional quality who understand work-related injuries is essential to managing costs. The pivotal emphasis should be on quality, not price. This sounds paradoxical in these times of higher and higher medical costs, where medical treatment now accounts for nearly 60% of workers’ compensation loss costs and where a bazillion companies unleash an army of people to reign in those costs in so many different ways (NCCI reports 13% of medical costs are devoted to lowering medical costs – go figure). However, ample research shows that doctors who specialize in occupational medicine with a sports medicine approach and who follow ACOEM (American College of Occupational and Environmental Medicine) guidelines, consistently provide injured workers with high-quality treatment while shepherding them back to the workplace in a compassionate and caring manner. Board-certified occupational medicine physicians know a worker should remain out of work no longer than is medically necessary. This leads to an active recovery and lower costs.

Take the time to shop for providers who offer the highest-quality care with an active sports medicine philosophy. Look for physicians who will take the time to understand your needs, perhaps through actual work site visits. Once you have identified potential providers, develop a written agreement that sets explicit procedures for handling workplace injuries. Be sure that each provider is willing to identify specific restrictions resulting from injuries and work with you to accommodate appropriate modified duty placements.

Now, admittedly, this approach can be difficult in the 21st century workers’ compensation medical environment. Large medical networks have enrolled more physicians than there are entries in the New York City telephone directory and have wrung out of each a discounted rate for service. This arrangement might be good for the networks, but not necessarily for you. In workers’ compensation, like in most everything else, you get what you pay for. So, our suggestion is that you should be prepared to negotiate higher payment for the good service you expect. We’ve found it worth it in the long run.

As with any valued vendor, you should provide positive feedback to physicians who take the time to care well for your injured workers. However, while everyone appreciates praise for a job well done, you should always remember a physician’s first responsibility is to the patient. The more the physician understands you have the same outlook, the more the physician will trust you and work with you to accommodate the injured worker’s needs appropriately.

Step 5 – Stress early return to work

Time away from work can be frightening and debilitating for injured workers. Their physical, emotional, and financial well-being are often in turmoil. They are worried about their job and how they will pay their bills, particularly so in today’s economic climate. They often begin to think of themselves as “disabled.” The longer they are out of work, the harder it becomes to get them back into the work routine. Consequently, it is crucial to speed recovery through the use of modified duty, one of the most important tools an employer has to reduce lost time and costs.

Modified duty is a bridge back to full duty, keeping workers active and part of the team. Instruct your medical providers to focus on what employees cannot do while injured, clearly delineating work restrictions.

For a moment, put yourself in the skin of the injured worker and imagine you are talking with your doctor about your injury. Would you want the doctor to list for you the potentially countless physical tasks you could actually still do while injured? Or, would you want the doctor to tell you the realistically few things you should not do? The latter approach is the one doctors prefer, too.

Once you have the medical restrictions, work with your supervisors to develop progressive, short-term transitional jobs and tasks. You don’t want the injured worker to sink roots into what should be a short-term job. Most important, make sure employees and supervisors carefully follow the physician’s restrictions. The goal is to speed recovery, not aggravate the condition and make things worse. As medical treatment continues and your medical provider gradually lifts restrictions, increase job demands to ease the employee back to his or her original job.


That’s it for now. We’ll be back with the last three steps Friday morning.

Eight Essential Steps To Controlling Workers’ Compensation Costs

Tuesday, May 30th, 2017

Many US companies have recognized two basic truths about workers’ compensation:

  • The workplace is the best place to control loss costs; and,
  • They, as employers, more than any other group, are best positioned to reduce and control loss costs.

These employers do not hand the problem off to their legislators, their insurers, their TPAs or their attorneys; instead, they manage workers’ compensation as a controllable expense, an accountable business program providing a competitive advantage. They partner with their insurers and TPAs to get the most out of everyone.

You would think 17 years into the 21st century this kind of business intelligence, really nothing more than Management 101, would be so widespread we’d never need to talk about it. But such is not the case. Many employers of all sizes and shapes continue to find themselves paying more than their industry peers, and we still have myriad conferences every year where anyone and everyone pays good money to hear “experts” impart the secrets to safe workplaces and low workers’ compensation costs.

But there really are no secrets. It’s pretty much common sense and sound management. I should know. For more than 30 years, our company, Lynch Ryan, has been privileged to assist many of America’s leading corporations as they attacked this issue. Here’s what we’ve learned after all that time: There are eight essential strategies that help progressive employers turn workers’ compensation liabilities into assets. The principles are simple, founded on basic human values. They involve a concrete action plan and sound management. More important, they work.

Today, we’ll focus on the first two steps. Tomorrow, we’ll post three through five, and Friday finish up with the last three.

Step 1 – Make a commitment

Harder to do than you’d think. C-Suite leaders are busier than the Ed Sullivan Plate Spinner. However, as with any major corporate endeavor, commitment starts at the top. You’ll need a pithy and cogent argument to convince your leadership team that workers’ compensation should be afforded priority status throughout the organization. You’ll also need to educate the team that realistic and attainable goals should be set and communicated to the organization from the top down and then measured religiously.

If you approach injury management simply as the “idea of the month,” you will certainly fail. Commitment involves building safety and injury management into the very fabric of your organization. You should never lose sight of your goals. And you should never compromise your commitment to safety by drifting toward expedient, short-term objectives that place production quotas above the safety of your people.

Corporate commitment should be in writing, signed by the CEO and communicated to the entire organization.

Step 2 – Focus on reducing lost time

Chances are, your company has been working to create a safe working environment. That’s good. Safety is essential in controlling workers’ compensation, but it’s only half the equation. Good safety programs have a positive effect on the frequency of injuries, but the best safety program in the world will not eliminate all accidents. People being human, injuries will happen. Try as we all do, work conditions change and we make mistakes.

To really attack workers’ compensation costs, you need to focus on reducing severity: the length of time injured employees stay out of work. Severity is the real cost driver in workers’ compensation. Every day that an employee is off the job costs you money.

When your machines break, you fix them immediately. Think of something as simple and common as the department copier. An out of commission copier slows everything down. When you purchased or leased that machine, you insisted that prompt maintenance or even replacement was part of the deal. You need to treat your most important resource, your employees, the same way. The goal must be to keep days away from work to an absolute minimum. You need to focus, laser-like, on the goal of returning every injured employee to work, through modified or transitional duty, and thereafter to the original job as quickly as possible. That’s good for you and it’s also good for the injured worker.

Many will argue severity is no longer the prime mover, medical expense is. While it is true that we spend a lot more on medical expense than on indemnity, consider this: The longer someone stays out of work, the more medical costs they incur. And often, this medical expense is nothing more than justification to extend absence beyond what is medically necessary. Focusing on severity reduction significantly reduces the growth of medical expense.


That’s it for today. If you’re interested in the other six strategies, numbers three through five will be right here tomorrow morning. Come back Friday for six through eight.

Hope you have a good day.

The Iceman Cometh

Thursday, May 25th, 2017

This will be hard.

For a moment, squeeze yourself into the tight shoes of one of America’s 11 million unauthorized immigrants.

Eight million of you are working. You make up 5% of the civilian workforce. Twenty-six percent of you work in farming; 15% in construction. A lot of people complain you and your unauthorized, undocumented, illegal alien brethren are taking jobs from Americans who need them, although you haven’t seen a lot of those Americans lining up to pick the fruits and veggies in the hot sun.

You have a job. It’s in construction. Not important how you got it – phony papers, no papers, whatever. You live in one of the 14 states that expressly allow workers’ compensation coverage for unauthorized immigrants. There are another 24 where coverage is allowed in practice, but not expressly allowed in the statute. And, every once in a while some state legislature will try to expressly exclude you and all the others. But those attempts are always beaten back by, of all things, the business community, because adopting a law like that might lead to unfair competition.

You’re married with three children, all born in the USA. You’ve been here for seven years, although two-thirds of all unauthorized immigrants have been here for at least a decade. You’ve never been in trouble. With anyone. You own a car, but no one will ever mistake it for a Tesla. It gets you around, though. It especially gets you to work.

Last week, you fell off a ladder at work and broke your leg. First time you’ve ever been hurt at work. A Supervisor took you to an Urgent Care Center where a doctor set your leg. Unfortunate, but you’re going to be out of work for eight weeks. Can’t be helped, but, because you live in one of the magical 14 states, you’ll get workers’ compensation.

Two days later the owner calls to tell you not to worry about anything. He says he wants to make things easier for you and the family. He thinks it would help if he gave you some cash to tide you over until the workers’ comp kicks in. Why not come into the office tomorrow at, say, 11:00, so he can do that? You’re grateful, and, in your broken English, you thank him and tell him you’ll be there.

Tomorrow comes. Eleven AM and you’re hobbling in the door to the office, broken leg and all, which is when the train comes off the rails. The owner’s not there, but ICE is. Immigration and Customs Enforcement, ICE, come to arrest you. And that’s what happens.

Two weeks later you and your broken leg are sitting in the county house of correction waiting to find out what will happen to you. You’re worried deep in your bones for your wife and three kids. Worried? No, you’re terrified. So, there you sit.

How’d that feel? Having a nice day, are we?

That story’s not fiction. It happened last week in Massachusetts. The man in whose shoes you were walking is 37-year-old Jose Flores who, with his wife Rosa Benitez, fled gang violence in Honduras seven years ago. Flores now has two lawyers, one for workers’ comp, the other for ICE. The lawyers know he’s entitled to workers’ compensation coverage, but wonder how he’ll collect it if he’s deported to Honduras. So far, the Iceman hasn’t come calling for Rosa Benitez, but that could change anytime. She and the kids are living in constant fear.

What about that owner who called ICE to come get Flores? He is Pedro Pirez. His company, Tara Construction, employs roughly ten people, and, so far, he has no comment about any of this. We do know one thing. On the day Flores fell off the ladder Tara Construction was not insured for workers’ compensation.

So, who’s committing the bigger fraud? Flores or Pirez? Something to think about.


A fresh Health Wonk Review for your perusal

Thursday, May 18th, 2017

Jason Shafrin, our favorite Healthcare Economist, has posted a fresh collection of health policy punditry, the “I will build a great Health Wonk Review . . . and nobody builds Health Wonk Reviews better than me, believe me”  edition. Want the scoop on AHCA, national drug policy, pharma, bundled payments or other current topics in the policy arena? Check out this post. If you don’t follow the health arena on a daily basis, Heath Wonk Review is a great way to keep up with the important news.

If you are feeling particularly wonky or would like to follow back issues, got to Health Wonk Review’s home page.


Workers’ Compensation Performance Measurement: Keep The Bull’s Eye Simple

Wednesday, May 17th, 2017

For the last decade, injury frequency has been trending steadily lower. There are a number of reasons for this: automation, loss of manufacturing jobs, better safety engineering, etc. Injury severity, however, has not followed suit despite technological gains in claim administration and medical management and an ever so slow move to the use of predictive analytics.

This creates challenges for employers, especially of the small and middle market variety, and, to a certain degree, even for a few national, enterprise accounts who find themselves pretty much where they were ten years ago in terms of style and policy with respect to workers’ compensation. One reason for this is the deep rooted legacy mentality and resistance to change of many insurers and Third Party Administrators. In many ways, these organizations remind me of flies circling around a light in a lampshade, mistaking movement for progress.

However, employers still foot the bill and are still in command. Keeping in mind that the workplace is the best place to control workers’ compensation costs, employers still need to build and maintain solid programs to prevent and contain loss. Case in point is Bob Oberosler, Vice President of Loss Prevention for Rite Aid, a national pharmacy chain. At the New Jersey Self Insurers Association’s Annual Meeting a couple of weeks ago, he described his company’s work to craft a forward thinking loss prevention and workers’ compensation management program and communicate it to employees who are far and wide, indeed. But before that could happen, Mr. Oberosler said, he faced an even more daunting task – getting management’s commitment and buy-in to the effort. The good news is this happened and Rite Aid has been enjoying some spectacular results because of it.

This got me thinking. In order to sustain C-Suite commitment, a risk manager, or Loss Prevention VP, such as Bob Oberosler, needs to provide the Leadership team a steady, easily understandable Performance Measurement Results Dashboard. So, what should be the characteristics of such a Dashboard?

Performance measurement should have four characteristics: It should be simple, it should be meaningful, it should be consistent and it should be continuous.

By simple, I mean easily and quickly understood by senior management. Meaningful means that it should sit in senior management’s sweet spot; it should be something that is anticipated and valued by leaders. It should be consistent, because those leaders, once trained to view performance in one way, do not appreciate abrupt course changes. And to be effective over the long term, it has to be a continuous and routine process. The mantra should be: What is consistently well-measured is highly valued.

With this framework in mind, I usually recommend that monthly or quarterly reports to senior management measure two things religiously: Incurred losses per full time equivalent employee (and this should be done by department, division and company) and incurred losses per every hundred dollars of payroll (again, split out by department, division and company). Before any measurement occurs, however, management should settle on targets, which should be a bit of a stretch, but attainable. And target selections should be set against actual performance in the prior three or four years. For instance, if costs per FTE have been in the $200 to $300 range in the last few years, a good target would be a reduction of 30% to 40% in the current year.

Senior managers have finite attention spans. Therefore, workers’ compensation performance measurement should fit on one page, a Scorecard that senior management can assimilate in no more than a few minutes. If the information is pithy enough, that’s as long as it should take, but it should also lead to fruitful discussion about management actions to enhance performance, discussion that comes out of knowledge.

There are many other solid and valuable workers’ compensation metrics, but, in Lynch Ryan’s experience, these two are the ones that senior managers appreciate the most.

All of this assumes, of course, that, as at Rite Aid,  a serious and ongoing safety, workers’ compensation and injury management program is humming along and that all parts of the organization have been trained in how to keep it that way.

Reactions To “Pharma’s Nine Words”

Monday, May 15th, 2017

We received a lot of thoughtful feedback to last week’s post on drug company Direct To Consumer (DTC) television advertising. I thought I’d share a couple that are representative of the whole.

This from a doctor in Florida:

You have acutely illustrated the challenge that allopathic physicians now battle with every day. In short, big Pharma has found a way to circumnavigate the drug salesperson and physician and go directly to the end consumer
Every physician feels significant pressure to satisfy their patients even when the request for certain pharmaceuticals is unreasonable; if the patient walks out of your office empty-handed chances are they won’t come back, so at the very least most patients have some prescription in hand upon their exit.

And this from a C-Suite Chief of Marketing:

I must confess upfront that I was one of those “DTC advertisers” in the early 2000s, having worked with Eli Lilly, Boehringer Ingelheim and Pfizer to name a few former clients.

Over the years I’ve read conflicting studies on DTC’s effectiveness and impact.  This said, there is typically a relationship between the largest category spender and market share.

You may also be interested in a dated survey from the FDA on the subject.  While there are definitely some “pro’s” associated with these efforts, including but not limited to patient empowerment (more prepared for doctor’s appointment, asking thoughtful questions, generally being more involved in one’s health, and better conversations about one’s condition and possible treatments). But there are also some “con’s,” including but not limited to:  overpromises/over statements of a drug’s potential benefits (and a corresponding downplay of possible side effects); pressure on physician’s part to prescribe a patient-requested drug, among others.  (But let’s not forget that there were physicians who were also in pharma’s pockets long before DTC, prescribing certain drugs based on lucrative relationships with companies.  Certainly not all of them… but unfortunately there were – and likely still are – some “bad apples.”)

It will be interesting to see how this debate evolves as baby boomers age.  Let’s hope that the patient is the ultimate winner here!

We can all agree with that last bit about hoping the “patient is the ultimate winner.”

We welcome responsible, thoughtful comments from our readers.



Pharma’s Nine Words

Thursday, May 11th, 2017

Any idea what the nine most frequently spoken words on US television are? How about:

My doctor said…

Tell your doctor…

Ask your doctor…

These words come at the beginning, “My doctor said,” the middle, “Tell your doctor,” and the end, “Ask your doctor,” of Direct To Consumer (DTC) television advertising with which Big Pharma bombards Americans every day. This is especially true during the morning network shows between 7:00 and 9:00 AM, the evening news hours and the occasionally funny prime time sitcoms that follow. The ads also feature a swell story with great looking actors and sweet music that plays as someone doing a voiceover tells us all about the 25, or so, ways the drug being pushed can kill us.

DTC ads come in many forms, but in 2015  69% of them were television ads with about a third of those coming from Pfizer. These ads have been allowed since the mid-1980s, but gained momentum in 1997 when the FDA relaxed the rules regarding television. Since then, it’s been Katy bar the door.

According to Pharmacy and Therapeutics (P&T), a peer reviewed journal for managed care and hospital formulary management:

The average American television viewer watches as many as nine drug ads a day, totaling 16 hours per year, which far exceeds the amount of time the average individual spends with a primary care physician.5,23,27

Since beginning the recovery from the Great Recession, television DTC has seen staggering growth:



According to Kantar Media, 72% of the commercial breaks in the CBS Evening News now have at least one pharmaceutical ad in them. These ads have a specific demographic target: Baby Boomers. Until 2012, they were mainly aimed at conditions such as dry eyes, erectile dysfunction, smoking cessation, chronic pain, constipation, heartburn, allergies and cholesterol. But in the last five years, they’ve made a deep dive into cancer, rheumatoid arthritis, and other illnesses to seniors. And, a reflection of our time, Opioid Induced Constipation hit the field during the 2015 Super Bowl. I can still hear the collective national gasp from that one.

Kantar Media reports Pharma spent $6.4 billion on DTC in 2016, with television garnering more than two-thirds of the spend. Since 2012, television spending is up 62%. During that time, the number of drug companies annually spending more than $50 million and the number spending more than $100 million has doubled. For example, last year, makers of Viagra and Cialis spent a combined $306 million convincing older (and increasingly younger) men that without those magic little pills their once prodigious sexual prowess, rapidly approaching Wooly Mammoth-like extinction, will never rise again, literally (but watch out for that 4-hour thing).

And when a new drug hits the market, first year spending can be breathtaking. Consider Opdivo, which debuted in 2015. The drug treats a certain kind of end-stage lung cancer (non-small cell lung cancer), which has a US patient population of less than 200,000. Yet Bristol-Myers Squibb, Opdivo’s maker, spent $93 million marketing it in its first year.

All this money begs an obvious question: Does it work? Well, even Pharma’s not sure, saying ROI is only one measure of a brand’s marketing success. Who is sure? The American Medical Association, which, in 2015, saying it was a colossal waste of money, called for an “outright ban” on Direct To Consumer advertising. The AMA also said doctors felt pressured by vulnerable patients who were looking for relief from one thing or another and that older drugs often work just as well, or even better, than the newer high-priced brands. Of course, it is preposterous to think we’ll ever return to to good old days of the 1980s before DTC advertising became more than a gleam in a marketer’s eye. The drug lobby is nearly omnipotent and there is the  little matter of commercial free speech. Moreover, drug makers claim they are providing valuable information with which consumers can make informed choices. Yet, according to the World Health Organization, “DTC is used to drive choice, not to inform it.”

America is one of only two countries in the world that allow Direct To Consumer drug advertising, the other being New Zealand, a country with a population of less than 4 million. The medical community doesn’t like it there, either.

Pharma has long had a wish to bring DTC to the European Union. That’s not going to be happening, however, as last year 22 of the 27 members rejected the idea.

The P&T white paper, mentioned above is presents an excellent analysis of DTC advertising, and has a nifty for-and-against page regarding DTC advertising. They’re both worth a look.

Health Wonk Review: the Groundhog Zombie Goes Back to the Future Edition

Thursday, May 4th, 2017


It’s quite the day to be going to press with a new Health Wonk Review. We were trying to think of  a movie themed metaphor for today’s edition but can’t decide between Back to the Future, Groundhog Day or a zombie flick, so we’re going for a mashup.   Suspense is in the air as we await a vote later today on the revised AHCA. Or at least that’s what the media has been predicting as the bill suddenly sprang back to life late  yesterday after some arm twisting and deal sweetening in the corridors of power. One wonders what the hurry is since the Congressional Budget Office has not had sufficient time to weigh in and a quick vote would seem to violate the pledge of a minimum three-day public review. But maybe avoiding those pesky details are are seen as features not bugs. Our wonks submitted posts from the past week, so most were submitted before yesterday’s frantic hubbub of activity, yet still make trenchant observations about the revised bill. And of course, even though this topic is currently dominating the news, many of our wonks have healthcare observations on topics other than repeal-and-replace so if you are tired of the ongoing legislative goings on, read on.

Joe Paduda has kept an eye on the repeal & replace movement with his series of posts on the ACA deathwatch at Managed Care Matters. In his most recent post, he talks about flaws that plague the current bill and why it is destined to fail: ACA Deathwatch: No, AHCA is not going to pass Congress

At blog, Harold Pollack warns us to get ready for the uncomfortable questions with AHCA. Currently, an estimated 27 percent of American adults have been diagnosed with declineable preexisting conditions. Rollback of protections for those with pre-existing conditions means health insurers will again be rummaging through your health history.

Think the $8 billion that the revised AHCA bill earmarks for preexisting conditions solves that problem? Timothy Jost explains why that is unlikely at Health Affairs Blog.

One drum that Roy Poses of Health Care Renewal continues to beat (thankfully) is pointing out how health care organizations are increasingly run by a network of insiders who often put self-interest ahead of patients’ and the public’s health. As we head into today’s vote, he points out another vivid example: How Legislators rigged the repeal of the ACA to keep their own health insurance affordable.

Vincent Grippi points us to a post by Care Centrix CEO John Driscoll at The Homefront blog examining the recent struggle of the American Healthcare Act and highlighting why value-based care is an important part of the solution in his post Coal Mining Isn’t Coming Back and Neither is Fee-for-Service Medicine. It makes great points in light of recent congressional goings on.

Louise Norris of Colorado Health Insurance Insider looks at what’s next in Colorado for health care reform noting that, lately, it’s been a whirlwind. A bill to help out people over 400% of FPL just failed, disappointing many; there is uncertainty about Anthem BCBS staying in the exchange; insurers don’t have an exit clause if Cost Sharing Reduction funding is eliminated; rates will be filed late this year due to market uncertainty, and there is a bill to eliminate the exchange still in progress.

InsureBlog‘s Bob vineyard highlights the financial challenges of actually *paying* for even minor health care in his post Buddy, Can You Spare a Dime?

It’s tough being a cancer patient. New urgent care clinics designed specifically for cancer patients help ease the burden and could be a model for the rest of healthcare. David Williams of Health Business Blog talks about what distinguishes these clinics and wonders why such services aren’t available to all healthcare consumers.

Brad Flansbaum of The Hospital Leader has a challenge to physicians: How often do you ask this (ineffective) question? A recent study calls into question the effectiveness of a widely accepted practice.

Healthcare Economist Jason Shafrin looks at the hedonistic treadmill and asks if it works in reverse when it comes to acclimating to deteriorating health conditions. (Don’t know what the hedonistic treadmill is? We sure didn’t but it is our nomination for concept of the day). He cites an recent study on the topic.

Here at Workers Comp Insider, we recently commemorated Workers Memorial Day, a time remember those who were hurt or killed on the job. In conjunctions with that event, the National Council for Occupational Safety and Health issued The Dirty Dozen, highlighting employers who put workers and communities at risk due to unsafe working conditions.

Next up to bat: May 18, 2017 – Jason Shafrin – Healthcare Economist.