By John Ballard
When the notion of health care reform came up I was very aware as a manager that workers compensation expenses are a serious part of any business. And the more employees you have, and the more opportunities they have to get hurt, the more is at stake. Improvements in health care will benefit those with a medical problem, of course, but there is a secondary benefit for everyone, including the well population, as one of the major expenses of all goods and services is brought under better control.
The most expensive single claim of the place where I worked started with nothing more than a cut finger. The story I got later was that as someone made arrangements to take the employee to the doctor, the employee was left briefly alone. During that time he fainted at the sight of blood, fell against something and bumped his head, resulting in a concussion that was not discovered until too late. He resumed consciousness and received appropriate treatment for his cut, but no one paid attention to the bump on his head. Hours later, as the result of undiagnosed slow internal bleeding, his brain sustained irreversible damage, the result of which caused him to need special assistance for the rest of his life.
Despite a national conversation about American medicine, I almost never hear anything about how work related diseases or injuries are addressed. Anyone who thinks health insurance will ever be replaced by some national health care delivery scheme is not living in the real world. Third-party risk management, both liability and workers compensation, is a essential to any business as competent legal and accounting resources. For that reason, work-related medical problems are of concern to everyone in ways that most consumers of products or services never think about.
The single biggest crisis facing workers comp is NOT the market cycle, employment, rate adequacy, or regulatory changes.
It is opioids. As Gary Franklin MD, Washington state fund's Medical Director says, this is a "hair on fire" issue.
I'm not talking about the $1.4 billion employers spend on these drugs, nor am I referring to the other medical costs incurred by claimants on opioids or the dollars wasted on diverted drugs or the hundreds of claimants dead from opioids prescribed for their injury; not even the disastrous personal impact on claimants and their families.
It's what opioids do to disability duration - that's what's going to drive up rates, kill off carriers, and jack up employer's premiums.
Claimants on opioids are NOT going back to work; not to their original job, a new job, any job. They can't drive, operate machinery, think clearly, function physically. Most employers can't or won't re-employ opioid-taking claimants out of concern for their safety and additional liability. Can't blame them either.
The issue is this - the industry has not accounted for the financial impact of the explosive growth in opioid usage among long-term lost time claimants. Sure, a couple of big insurers have figured this out and are moving very fast (and very quietly) to assess the risk and try to mitigate the impact, but the vast majority of carriers, employers, reinsurers, actuaries, and regulators have yet to catch on.
While some are beginning to implement programs in an attempt to reduce the initial use of opioids for injuries, that's closing the proverbial barn door after the herd is long gone. These programs are often pretty ineffective as well; even if the medical director/case manager/guidelines recommend against approving opioids, adjusters usually approve them anyway. That's not really the adjuster's fault; they just don't have the experience/education/training/support to make the right call.
The real killer is the claim backlog, those old-dog, legacy claims where the claimant has been on OxyContin, Fentora, Actiq, hydrocodone and god knows what else for five years, where the doses have been escalating, there's been no drug testing for compliance, and the treating doc has no long term plan other than 'more'.
What does this mean for you?
If you aren't already deep into a financial analysis of the real impact of opioids on claim closure, disability duration, indemnity and medical expense, start immediately. Not this afternoon, not tomorrow, not after next month's planning call.
And don't settle for platitudes, for "not to worry we've got that figured out" statements. Demand projections based on actual experience backed up by real data. And be prepared for some very, very bad news.
But better to get that news now then a couple years down the road from your favorite rating agency. While they haven't figured this out yet, you can be sure they will.