Paduda: How'd I Do in Predictions for 2023?

Wednesday, January 3, 2024 | 0

Yikes!

A year has passed (good riddance), and it’s time to own up to how I did on my annual predictions for workers’ comp, and stuff that will drive WC —a view inside Health Strategy Associates' intergalactic headquarters’ predictive analytics department.

Joe Paduda

Here we go. Predictions and results thereof:

1. The soft market continues.

And it won’t harden in 2023. Medical costs remain very much under control (with an exception), rates continue to drop, employment remains very strong (essential for return to work) and there are lots of payers fighting for market share.

True. The fine folks in Oregon’s helpful analysis of state work comp rates indicate once again rates were down. For years, work comp rates have been artificially high; that continued in 2023 driven in large part by the opioid hangover.

2. Medical spend is NOT a problem and will NOT be in 2023.

With a couple of notable exceptions — to be covered in a future post — medical inflation will remain under control. In part, this is driven by much lower drug spend and, more specifically, the continued decline in opioid spend. The latter has a big impact on claim closure and total medical spend.

True. Client data and early indicators point to relatively modest increases, if any, in medical spend. Facility costs are the exception, but a shift in the location of service has, for now, moderated the impact.

3. Behavioral health and its various iterations will gain a lot of traction.

More state funds, carriers and third-party administrators will adopt BH programs, more patients will benefit and more dollars will be spent. There’s a growing recognition that medical issues aren’t hindering “recovery” nearly as much as psychosocial ones. This is great/wonderful/long needed and will really benefit patients and payers alike. Kudos to early adopters, and LET'S GO to you laggards!

True — although there is not enough infrastructure to support BH. Sure, some companies have BH-specific experience and expertise. Carisk is among the leaders, and AppliedVR is the only FDA-authorized virtual reality chronic pain solution and is gaining significant traction. Unfortunately, there are no national or even regional provider networks providing full BH services. This is in large part because payers want discounts (do NOT get me started on the stupidity of this) coupled with a national shortage of providers. (Carisk and AppliedVR are both HSA consulting clients.)

4. One Call will be sold. 

I keep forecasting this, and one day I’ll be right. It has to be this year. CEO Jay Krueger and colleagues have OCCM on a better track, but structural problems (i.e., declining claim volume) and internalization of One Call-type services by Sedgwick and others make the future less than promising. Couple that with recent ratings actions by Moody’s and S&P, and it’s time to do the deal.

Wrong, again.

Well, I can’t seem to win this one. Any interested parties have run away because OCCM’s current owners are suing each other. Gotta feel for Krueger and colleagues. I’m quite sure that if the circular firing squad hadn’t pulled out their guns, OCCM’s staff, clients and customers — and the investors as well — would be in a much better place.

5. New technology will make its impact felt.

Wearables, chatbots (I HATE THEM) and virtual reality-driven care are three ways tech platforms/systems/things will significantly ramp up in ’23. Expect several large/mid-tier payers to adopt new tech in a major way, aka not just a small pilot.

Structural issues with health care (try to find a licensed clinical social worker or psych-trained counselor), lack of trained adjusters and frustration with rising rehab expenses are all contributors.

True. AppliedVR is working with several workers’ comp payers today, as well as the Department of Veterans Affairs. Plethy, the recovery support company, is rapidly expanding its client base, and many payers are trying other tech, with quite mixed results.

Plethy’s data indicates consistently high patient adherence to home exercise and remarkable outcomes. Other wearable tech that requires provider
training uses vision technology to monitor movement and is struggling with low adoption and adherence. (Plethy is an HSA consulting client.)

Next: The other five predictions.

Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.