Archive for the ‘Research’ Category

2016 White Paper Evaluates Commonwealth Care Alliance

Monday, July 18th, 2016

In April, 2016, I authored a post about Commonwealth Care Alliance (CCA), a Massachusetts HMO dedicated to serving the Dual Eligible population. Duals qualify for both Medicare and Medicaid, and CCA has been the nation’s incubator for how to do that. The Boston-based HMO operates a Senior Care Option plan for Duals over the age of 65 and an Affordable Care Act demonstration project, called One Care, for Duals younger than 65. I’ve been a CCA Director since its inception in late 2003.

Now, with the support of the Robert Wood Johnson Foundation, JSI Research & Training, Inc., has published an extensive evaluation of CCA’s visionary and groundbreaking efforts to treat the nation’s sickest of the sick and poorest of the poor.

In JSI’s words:

The provisions in the ACA were designed to achieve the Institute of Health Improvement’s Triple Aim of improving patient experience of care and the health of populations while reducing the overall cost of health care.

The 22-page White Paper’s thrust centers around CCA’s “Social ACO” model of care. JSI describes the Social ACO approach this way:

These approaches are based on the idea that improving health and cost outcomes of vulnerable populations will necessitate incorporating health, behavioral health, and social services into the ACO model. Social ACOs serve populations with complex and often unmet social and economic needs that impact health outcomes and health system utilization, including needs related to housing, food security and nutrition, legal assistance, employment support, and/or enrollment assistance.

As I noted in April, Duals represent only 4% of the nation’s population, but consume 34% of its health care dollars. They present a societal problem begging for a solution. The Affordable Care Act offers revolutionary innovators like CCA the chance to prove their worth. So far, as the JSI paper suggests, CCA’s approach is spot on. Here’s JSI’s conclusion:

As a pioneer of the social ACO approach, its (CCA’s) story offers insights into the factors and processes that promote successful realization of the Triple Aim for other emerging ACOs focused on complex patient populations.

Payment and delivery reform promises to transform care for the nation’s most vulnerable citizens. This is needed more than ever given rising healthcare costs and continued fragmentation of the care system. CCA’s social ACO model represents one approach to caring for some of the highest risk populations, though even this approach has had to be adapted extensively for the dual-eligible population under 65. Given its longevity of refining a care model, a global capitation payment model and a culture of innovation to care for high-risk, vulnerable populations, CCA’s experience is relevant to any provider organization seeking to transform care for high-risk populations.

Achieving the Triple Aim of improving the health of America’s dual population while lowering the cost of doing so is a rabbit-out-of-the-hat trick of the first order, but, at least to this point, Commonwealth Care Alliance seems to be onto something that will do just that.

One final thought: On the eve of our two presidential conventions, it would be nice if, at some point in all the bloviation, a cogent discussion regarding health care were to be had. And I’m talking about something other than, “On Day 1 we’re going to repeal Obamacare.”

But I wouldn’t bet on that happening. Would you?

In Oklahoma, The Times, They Are A’Changin’

Tuesday, May 17th, 2016

In Oklahoma, we are now witness to a confluence of events, unintended consequences of perhaps misguided political and business decisions, that are shakin’ the windows and rattlin’ the walls, to paraphrase the great Bob Dylan. And I’m talking actual and metaphorical.

On the actual side, consider this. Prior to 2009, Oklahoma averaged two earthquakes a year of a magnitude greater than 3.0. Last year, there were more than two a day. Cornell University Seismologists studying this say the rise in earthquakes is unprecedented in terms of sheer volume as well as in how fast the number grew. A 60 Minutes investigation revealed that Oklahoma’s biggest industry, Oil and Gas production, is the likely culprit. Why? Because when oil is pumped out of the ground, wastewater comes with it. A lot of wastewater. Billion of gallons of the stuff. So, rather than put the state under water, industry pumps all that wastewater back deep into the ground where it seeps into and around the faults and techtonic plates causing plate shifting which results in all the earthquakes.

A 2015 earthquake study from Stanford University reported:

“Stanford geophysicists have identified the triggering mechanism responsible for the recent spike of earthquakes in parts of Oklahoma – a crucial first step in eventually stopping them,” wrote Ker Than for the Stanford Review.

“In a new study published in the June 19 issue of the journal Science Advances, Stanford Professor Mark Zoback and doctoral student Rall Walsh show that the state’s rising number of earthquakes coincided with dramatic increases in the disposal of salty wastewater into the Arbuckle formation, a 7,000-foot-deep sedimentary formation under Oklahoma.”

As I write this, the U. S. Geological Survey reports a 3.8 magnitude quake hit about 28 miles northeast of Oklahoma City on Sunday. And for good measure, two other slightly less severe quakes struck within eight hours earlier than the 3.8 quake.

On the metaphorical side, a different kind of earthquake, a political one. And by that I mean the abrupt turnaround of Oklahoma’s Governor Mary Fallon and the Republican controlled legislature regarding adopting Obamacare. Seems the state is nearly bankrupt in terms of funding health care. Hospitals and nursing homes face closure. It is a crisis of monumental proportion. But wait – there’s the Obamacare cavalry coming over the crest of the hill! Politicians now realize that federal funding for Medicaid expansion (Governor Fallos says it’s not an “expansion;” it’s a “realignment.”) looks like a pretty good port in the storm. Naturally, critics are lining up to decry the move, but the legislature appears to be coming around to it.

Who knew? Perhaps when next I look out my 3rd story window pigs will be flying by.

The Sickest Of The Sick, The Poorest Of The Poor

Tuesday, April 5th, 2016

They comprise less than 4% of the nation’s population, yet consume nearly 34% of health care dollars. Sixty percent are age 65 or older. About 40% are younger people with ADL-qualifying disabilities. More than half fall below the federal poverty level. Almost half never graduated high school. Nearly two-thirds are female. Fifty-eight percent are white/non-hispanics.

They are America’s “Dual Eligibles,” our fellow citizens who qualify for both Medicare and Medicaid benefits. Technically, because they’re Duals, they are not the “uninsured.” Still, they sit smack dab in Obamacare’s bulls eye.

In 2003, here in Massachusetts, a pioneering visionary decided to create a non-profit HMO that would offer as its sole product a Senior Care Option plan aimed at the over-65 Dual population. As a former head of the Long-Term Care Division within the Commonwealth’s Medicaid Program, Mass Health, Dr. Bob Master knew a lot about the Duals and the many challenges they presented. Somehow, he convinced a few academics and business people to join his brand new Board of Directors for his Quixotic quest. I was one of them.

In the early days, the hunt for funding was all-consuming, but against considerable odds, funding was found, and, with the support of CMS and Mass Health, an incubator for the nation was born – Commonwealth Care Alliance.

Bob immediately set out to prove that Duals could achieve significantly better health and well-being at lower cost if they were cared for in a home-based regimen by highly trained teams of providers. And between 2003 and 2014, CCA produced eye-popping proof of concept results. For example, thirty-day hospital readmission rates for these sickest of the sick and poorest of the poor consistently beat Medicare’s overall rate. CCA achieved annual Medicare star ratings of 4.5 or better (Because of Senior Care Option demographics, it is statistically impossible for the company to achieve a higher rating).

CMS took note. And when medical, academic and political luminaries were crafting the Affordable Care Act, Bob was instrumental in convincing them Duals were a target not to be missed.

Consequently, the Affordable Care Act created demonstration projects in nine states from California to Massachusetts to see whether it’s possible to improve the health of all Duals, those over the age of 65 as well as under it, while reducing their health care costs. A tall order, indeed, because it had never been done before.

CMS and Mass Medicaid issued a humongously big RFP. Commonwealth Care Alliance answered it and won the right to play in the new sandbox, called One Care. The year 2014 was spent in preparing. For example, in order to be ready, the company had to double the size of staff (there are now more than 800) and train the newbies to successfully manage CCA’s unique model of care. That was not easy.

In early 2015, we opened the floodgates to the state’s thousands of Duals under the age of 65. Since then, it’s been a thrilling ride, because throughout 2015 CCA had a few near-death-experiences. But with the help of both CMS and Medicaid we were able to negotiate the potholes and speed-bumps, and now, after more than a few sleepless nights, the company cares for more than 17,000 Duals with Medicare and Medicaid premium of more than $850 million. In essence, CCA is beginning (barely) to do well by doing good. To my mind, if the Affordable Care Act, Obamacare, does nothing more than significantly improve the lot in life of the nation’s Duals while lowering their cost of care, it will be a success of the first order.

Now, it’s time to turn the reins over to a new era of leadership. Last Friday, we had a retirement party for Bob Master where CCA employees who could free themselves from work for a couple of hours came to Boston to say hail and farewell. Many came on their own time. There was a great big cake and a lake-full of diet soda and coffee, but no dignitaries, just current staff and a number of Directors. The Chair of the Board said nice things about Bob and the ride we’d all been on. I described how, after all this time, Bob and I had discovered less than a year ago over lunch that, in addition to growing up in the next town to each other, we had been comrades in arms back in the late-60s in Vietnam; in the same Division, even, at the same time. Funny, that.

Many employees read stories they’d prepared for the occasion. Honest tears were shed. Bob gave an extemporaneous speech that was heartfelt and touching. He thanked all who had joined in the noble quest, many by name. Then he rode off into the sunset.

But the work goes on.

 

 

 

 

Some Final Thoughts Following WCRI’s Annual Conference

Wednesday, March 16th, 2016

 

This year’s conference was an interesting blend of hard data and subjective debate.

On the hard data side we learned the preliminary results of some studies addressing what most in the business consider to be the key issues of the day, and they are all medical (a position with which I do not agree, but, admittedly, I am a minority of one). Some of the studies produced  results that validated what I like to think of as the “Duh!” conclusions. These are conclusions that seem totally logical and predictable, conclusions reached by mere intuition. Trouble is, policy, at least good policy, should be based on verifiable evidence, the kind that these “Duh!” studies produce, and not by intuition.

For example, workers’ compensation pays providers better than group health, in some states way better. So, it is logical and intuitive to believe that providers in those way better states would categorize soft tissue injuries as work-related rather than group health if given the chance. And, what do you know? Preliminary results from one of the studies put “You betcha” to that one.

So, cost shifting happens, and now we have proof, proof that policymakers can cite as they suggest system improvements.

Subjective debate was alive and well in the two Opt-Out panels. There were eight panel presenters, and only one of them, Elizabeth Bailey, from Waffle House, Inc., produced any data. As I wrote during the conference, Ms. Bailey presented data on cost savings Waffle House achieved since Opting-Out of Texas workers’ compensation in 2002. The savings were impressive, indeed, but, as attendees pointed out during the question period, Waffle House has made other workers’ compensation, safety and employee involvement improvements since Opting-Out, so it’s hard to say just how much Opting-Out has contributed to the cost savings. In other words, Waffle House’s cost savings may be nothing more than a painted hook on which Opt-Out enthusiasts want to hang their collective hats. More study is needed. Let’s hope it happens.

And let us not forget Bob Hartwig, the illustrious outgoing President of III, the Insurance Information Institute. Dr. Hartwig, who delivers presentations at Gatling gun speed, spoke on the Sharing Economy, or, as Hilary Clinton calls it, the Gig Economy. His formidable presentation was entertaining, educational and scary all at the same time.

For me, three things are memorable from the presentation:

  1. The Gig economy is bigger than anyone thinks, and is growing swiftly. And, as you might imagine, Millennials are deep into it. This is a movement that has the power to change an economic system.
  2. Hartwig suggested that the days of AI, Artificial Intelligence, taking over America’s jobs are farther in the distance than have been predicted by AI experts. His position is one with which I, respectfully, disagree. I think we’re closer to a cataclysmic shift than he believes. To put a point to that, Gary Anderberg, Senior VP of Analytics for Gallagher Bassett, suggested, no, pronounced, during the question period that all of the WCRI attendees could be replaced given today’s Watson-like technology. That’s heady stuff.
  3. I got to ask the last question of Dr. Hartwig, and it was this: “To what degree do you believe the Gig Economy correlates to the relative stagnation in hourly wages over the last 40 years?” His reply? “Good question. A lot.”

Bob Hartwig now moves to a professorship at the University of South Carolina, and the students in the Finance Department have no idea what is about to hit them. I predict his classes will be over-subscribed from the get-go.

Hope to see you at next year’s WCRI conference, March 2nd and 3rd in Boston.

 

WCRI: Day One, Part Three: The 2nd Opt-Out Session

Thursday, March 10th, 2016

Bruce Wood, of the American Insurance Association, led off the second Opt-Out session by reminding participants that the 1972 National Commission “considered and rejected employer or employee choice of benefit plans.” So, right away we knew where Mr. Wood was heading. He boarded the Trey Gillespie train and left the station smartly. His conclusions:

  • Opt-Out raises fundamental issues of public policy that policymakers have failed to consider;
  • Opt-Out lacks an organizing principle that reflects acceptable social policy; and,
  • Opt-Out is flawed and should not be enacted.

You know where Mr. Wood stands.

The second presenter was Elizabeth Bailey, VP of Workers’ Compensation & Safety for Waffle House, Inc. Waffle House, headquartered in Georgia,  is in a number of states, Texas being one of them. The company has been a Texas Non-Subscriber (it’s Opted-Out) since 2002, and, according to Ms. Bailey, has enjoyed spectacular results ever since. Such as:

  • Within one year, claims cost per restaurant dropped 57%;
  • Indemnity claims went from 15.03% of total claims to 3.23%;and,
  • Indemnity costs declined 99%

Wow!

Ms. Bailey described how Waffle House has increased its safety and health efforts while providing equivalent benefits as those required by the workers’ compensation statute. The company’s economic results are certainly stellar, but at what cost to employees? We were left wondering. However, as David Deitz pointed out in the question period, Ms. Bailey was the only Opt-out presenter who “presented” any data.

 

The third presenter, Alan Pierce, is a Massachusetts plaintiffs attorney, but that doesn’t begin to describe his standing in the legal community. He is one of the nation’s foremost advocates for injured workers and is the past chair of the Workers’ Compensation Section of the American Bar Association and the Massachusetts Bar Association. As expected, he offered an eloquent precis suggesting that workers’ compensation is not a benefit, but rather an employee right. He, too, cited the 1972 National Commission pointing out that most of its recommendations have never been adopted. Mr. Pierce is always interesting.

The last presented was Oklahoma Insurance Department Chief of Staff James Mills. I was somewhat surprised to hear him defend the Oklahoma Opt-Out statute. Essentially, Attorney Mills said that he was open to any program or law that might have the chance of benefiting both employers and employees and likened the statute, which had 57 legislative authors, to some other ideas that needed time to grow and prosper. Who knows? Maybe that’s what will happen to Opt-Out.

But I wouldn’t hold my breath waiting for that to happen.

WCRI: Day One, Part Two: The 1st Opt-Out Session

Thursday, March 10th, 2016

The afternoon of WCRI’s 2016 Annual Conference was devoted to Opt-Out. The first of two sessions was a Point-Counterpoint exercise. Trey Gillespie of the Property & Casualty Association of America led off. To Mr. Gillespie, with Opt-Out it’s 1910 all over again. He described Opt-Out in Texas and Oklahoma as allowing employers to deliver sub-standard care to injured workers without government oversight. Showing stark contrasts between what is allowed in Opt-Out and required in workers’ compensation, he suggested that employees were at the mercy of employers, which could sometimes be good and sometimes be bad. Opt-Out’s a kind of Employer Personal Responsibility Plan.

Bill Minick, of PartnerSource, followed with a presentation in favor of “Options to Workers’ Compensation.” Minick has been the loudest proponent and most significant advocate for Opt-Out. He and Opt-Out were the subject of a Propublica investigative journalism story late last year. He described Opt-out as a substantial improvement on a failed system and painted a picture of employers being able to provide better care for injured workers at less cost, because regulatory and bureaucratic requirements have been stripped out. Essentially, Minick claims that the workers’ compensation system makes employers go from Massachusetts to Rhode Island by way of Alex Swedlow’s California. He’d rather just drive the 30 miles down Route 95.

My basic problem with Opt-Out, wherever it is, is that some employers with resources and good intentions welcome the chance to design their own injury benefit plans that will provide benefits at least as good as traditional workers’ compensation at significantly less cost. This, in itself, is a good thing. Some large employers in Texas, such as Costco, seem to have done that. Trouble is, not every employer is Costco. As I wrote when I evaluated Opt-Out in 2014, I’m concerned about Kenny’s Citgo, down the street and around the corner, where Kenny and his five hourly workers labor without the benefits of a mandated workers’ compensation plan, because Kenny has Opted-Out. There are more Kenny’s than Costcos.

WCRI – Day One, Part One

Thursday, March 10th, 2016

Day One of the WCRI’s annual conference began with WCRI’s Chairman, Vincent Armentano, of The Travelers Companies, introducing new President and CEO John Ruser. He presented the first session (preliminary finding, subject to change) on the Impact of Fee Schedules on Case Shifting in Workers’ Compensation.

It should come as no surprise that there is substantial variation in fee schedules and prices across the states and that workers’ comp fee schedules and costs continue to be higher than group health costs, in some states significantly higher. Bottom line here: States where workers comp pays higher medical reimbursements have a much greater chance of a soft tissue injury being classified as work-related. Not so much for traumatic injuries, such as fractures. In otherwords, states that have higher reimbursement for workers’ comp than group health have greater incidence of cost shifting to worker’s comp. Follow the money.

Next up, Dr. Bogdan Savych on comparing worker outcomes across fifteen states. Interesting news: Between 9% and 19% (median is 14%) of injured workers “had no substantial return to work” (meaning returning to work for at least 30 days) three years post-injury. These, again, are preliminary findings and subject to change, but 14% is a huge number. This study, based on 6,000 injured worker interviews, raises many questions. For example, what role do differing state workers’ comp benefits play in this. Also, Savych divided the workers into six age cohorts. The older group had more injuries without substantial return to work. What role did their age play in that?

Alex Swedlow, President of the California Workers’ Compensation Institute, delivered a mesmerizing presentation on Independent Medical Review and Dispute Resolution in the state, which, if it were a country, would have the sixth highest GDP in the world. Not surprising, to quote Swedlow, “Size matters.” California’s been trying to control medical costs for decades, and it keeps trying. I can’t begin to cover the totality of  the Swedlow presentation, but here’s one takeaway: Ten percent  of California’s medical providers account for 85% of Independent Medical Review decisions. Again, follow the money.

Artificial Intelligence: Change On A Monumental Scale

Monday, February 29th, 2016

This morning, Joe Paduda, at Managed Care Matters, did the workers’ compensation community a service with his blog post What Job?, in which he writes about the likely prospect of many jobs disappearing due to Artificial Intelligence (AI).

AI is permeating every industry. For example, watch Motoman’s nearly human-free plant in Sweden as robots assemble, package, shrink wrap and ship thousands of Ikea bookcases, or a BMW plant in Germany as robots build the i3 electric car from scratch and with amazing precision, or CNN as its reporters show how Google’s driverless cars are navigating California and three other states.

This is one of the defining issues of our time, and one in which I am profoundly interested. I suggest it is not hyperbole to predict that we are on the verge of an epochal change, something like a kind of mass extinction, and what’s going extinct is an enormous number of jobs. This change might be even more significant than humanity’s evolution from an agrarian to an industrial economy.

Mr. Paduda cites the the Frey and Osborne paper from Oxford University’s Oxford Martin School that suggests up to 47% of jobs run the risk of going the way of the Woolly Mammoth by 2025. The paper is highly controversial and its conclusions have been hotly debated. Even so, the most conservative naysayers agree that the figure is at least 16% (but that figure doesn’t take into account the jobs that the AI revolution will create, estimated at about 9%, for a net job loss of 7%). So, you can see there’s a huge difference of opinion. Regardless, millions of jobs will be lost. Add into that mix the following, and you have a wicked brew for the future:

  • The rise of the Millennials, whose cultural and social thinking, as well as their total buy-in to AI technological development, is nearly diametrically opposed to today’s economic leaders, the Baby Boomers, who are now exiting the work force at the rate of one every seven seconds;
  • Rapidly increasing economic inequality throughout the workforce. For example, consider that since 1973 inflation has grown 533%, while hourly wages for non-farm US Production and Non-Supervisory employees, measured in constant 1984 dollars, have risen a whopping 4%;
  • Put that beside the Disappearing Act of US labor unions. Whatever you think of them, unions were good at negotiating hourly wages and other benefits like health care. But with only 6.7% of the private sector unionized today, that doesn’t happen anymore, so we’re left with a near total change in how we pay for health care today, as well as what we get for it, compared with how we paid and what we got for it in 1973. For example, we now have $2,000 (or more) deductibles, significant increases in employee premium contributions, the gold medal for the highest cost for health care in the developed world, way-over-the-top histrionics surrounding the Affordable Care Act, etc. You get the picture.
  • The increasing need for both cognitive and social skills in entrance level jobs on track for middle class wages (presuming there is a middle class). See The Increasing Complementarity of Cognitive and Social Skills, by Catherine J. Weinberger, University of California, Santa Barbara.
  • The continued accuracy of the 1965 technological development prediction, known as Moore’s Law. Simply stated, Gordon Moore, the founder of Intel, predicted that computing power would approximately double every two years, and it has – since 1965. Moore has recently revised his prediction to two and a half years through the next decade.
  • Finally, the rise of what can be called the “intellectual” robots as exemplified by IBM’s Watson, which, in addition to handily beating all-time champion Ken Jennings at Jeopardy, is already doing a better job of reading XRays, CT Scans and MRIs than human radiologists. And here’s something to ponder along that line: Many agree that a workers’ compensation claims adjuster with a lost time caseload of 100 to 125 claims has the ideal caseload (a few nights ago at a Central New Jersey Claims Association meeting I was talking with a motivated and energetic workers’ comp claims adjuster for a company that shall go nameless – but it’s respected and well-known – who told me she’s carrying 180, and that’s the norm for her group). How would Watson do on that? Watson, a machine that sounds like the Hal 9000, never sleeps and could analyze thousands, maybe more, of lost time claims a second. IBM says that human involvement with Watson is critically important, but how many people does that mean? After the initial intake with the claimant, how much claim management could shift to Watson? You may not agree, but it seems to me that more than a few workers’ comp claims adjusters may soon begin to resemble that long-gone Woolly Mammoth.

I’ll leave you with a question: Do you think it would have been appropriate if this subject had made it onto the agenda for the upcoming WCRI Annual Conference in Boston, March 10 and 11? Regardless of your answer, I’ll be there and will be happy to dive deep into the AI crease with any interested attendees.

Hope to see you there.

 

 

What life was like for U.S. workers in 1915

Wednesday, February 24th, 2016

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To commemorate its centennial, editors at the Monthly Labor Review have produced an excellent and fascinating report on The life of American workers in 1915 and the progress we have seen in the workplace since then. We think it’s worth your time to check it out!

The context of the era is first established with a list of news events that were occurring at the time: a bill to give women the right to vote was rejected; labor leader Joe Hill was charged with murder, a charge that would lead to his execution; Alexander Graham Bell made his famous call to Thomas Watson in San Francisco, Typhoid Mary was arrested, Einstein formulated his theory of general relativity -these and several other key events shaped the era.

The report goes on to discuss the demographics of the day and paint a portrait of daily life with many interesting facts about daily life ranging from where and how people lived (mortgages typically ranged from 5 to 7 years, but required 40-50% down) to how they commuted to work each day (streetcar, by foot or by horse) , what they typically ate for breakfast (corn flakes and puffed wheat cereals), what they wore for work clothing, how many hours they worked, what an average worker was paid ($687 a year), how they spent their leisure time, and more. It’s a fascinating and well-researched historical document.

For our purposes, we were most interested in work conditions and safety. Here’s one excerpt:

Although working in mines was notoriously dangerous, mill work could also be quite hazardous. BLS reported about 23,000 industrial deaths in 1913 among a workforce of 38 million, equivalent to a rate of 61 deaths per 100,000 workers. In contrast, the most recent data on overall occupational fatalities show a rate of 3.3 deaths per 100,000 workers. Regarding on-the-job safety, Green notes, “There was virtually no regulation, no insurance, and no company fear of a lawsuit when someone was injured or killed.” Frances Perkins, who went on to become the first Secretary of Labor (1933–45), lobbied for better working conditions and hours in 1910 as head of the New York Consumers League. After witnessing the 1911 Triangle Shirtwaist Factory fire, which caused the death of 146 mainly young, immigrant female garment workers in New York’s Greenwich Village, Perkins left her job to become the head of the Committee on Public Safety, where she became an even stronger advocate for workplace safety. From 1911 to 1913, the New York State legislature passed 60 new safety laws recommended by the committee. Workplaces have become safer, and technology has been used in place of workers for some especially dangerous tasks.

In addition to this excellent article, there are a few noteworthy accompanying reports and articles in the sidebar, as well. Occupational changes during the 20th century charts how farmers, craftsmen, laborers and private household workers gave way to professional, managerial and service workers over the course of the century. Labor law highlights, 1915–2015 runs through legislation and trends that improved the worker’s lot – ranging from legislation that regulated child labor to laws prohibiting discriminatory practices for women and minorities. Two key legal initiatives were the introduction and adoption of workers compensation laws and workplace safety initiatives being legislated in 1970 with the passage of the birth of the Occupational Safety and Health Act (OSHA).

 Theodore Roosevelt, arguing in favor of workers’ compensation (then known as workmen’s compensation) laws in 1913, offered the story of an injured worker that summed up the legal recourse available for workplace injuries at the time. A woman’s arm was ripped off by the uncovered gears of a grinding machine. She had complained earlier to her employer that state law required the gears be covered. Her employer responded that she could either do her job or leave. Under the prevailing common-law rules of negligence, because she continued working she had assumed the risk of the dangerous condition and was not entitled to compensation for her injury.

As the example illustrates, common-law negligence was not ideal for handling workplace injuries. Workers who noticed hazards could either “assume the risk” and continue working, or leave work; they were powerless to change the condition. Employers were at risk as well: they were vulnerable to negligence suits that could yield large, unanticipated awards for injured workers. Workers’ compensation, where employers insure against the cost of workplace injuries and workers have defined benefits in the case of injury, significantly reduced the risk for both parties.

Our brief excepts don’t do these report justice. Kudos to all the people who produced these great documents and congratulations on 100 years of reporting on the American workplace!

WCRI’s Annual Conference: Two Days of Research Data. What Could Be Better?

Monday, February 15th, 2016

The Workers’ Compensation Research Institute, located in the heart of Geek Heaven, Cambridge, Massachusetts, begins its 32nd Annual Issues and Research Conference in less than a month, 23 days to be precise. The conference is always interesting and often highly informative. Looking at the Agenda, this year’s effort seems to hit on both marks.

The theme is Understanding Today to Prepare for Tomorrow, which I guess could be anyone’s daily Mantra, but is exactly what the WCRI has been doing since its founding in 1983.

A lot has happened in the workers’ comp world since then. Perhaps the most astonishing development is the tremendous rise in medical costs. In the mid-1980s, medical costs comprised about 44% of total loss cost dollars, while indemnity payments took the lion’s share of 56%. Today, we see something entirely different, with medical costs taking up around 60% of the total. How times have changed!

However, comparing medical to indemnity costs is a bit like the old apples and oranges cliché. By that I mean that medical costs, despite fee schedules, have been able to go on there own little rocket ride to the moon in most states. Indemnity payment increases, on the other hand, are everywhere limited and tied in some way to the rise in the average weekly wage in the various states. And since 1973, average hourly wages, measured in constant 1984 dollars, have increased by a paltry 4%. This is one of the reasons why, despite a continuing decrease in injury frequency, a concomitant increase in severity doesn’t move the indemnity needle.

WCRI’s conference will dive into workers’ comp’s thorny issues with both feet. The session entitled Impact of Fee Schedules on Case-Shifting in Workers’ Compensation promises to be interesting, indeed. The relationship of case-shifting to the ACA has been something that many have opined about, but now I presume we’ll see some solid data.

Another session that looks as if it will present both interest and fireworks is the Opt-Out Panel. Actually, there are two Op-Out Panels. WCRI is devoting nearly three hours to the subject. Seat belts should be fastened.

I’m looking forward to this year’s conference. It’s happening  March 10-11 at the Westin Copley Place Hotel. Hope to see you there.