Little Progress Reducing Shoulder Claims
While the nationwide frequency of workplace injuries impacting other body parts, such as lower backs, continues on a downward trend, workers’ compensation experts say they have not seen a corresponding drop in workers suffering from shoulder problems.
Shoulder injuries can require longer recovery times than do other body parts, diminishing the likelihood of a quick return to work, several medical experts said.
“Shoulder claims are huge now,” with the joints of an aging workforce wearing down, said Liz Thompson, CEO at Encore Unlimited LLC, a case management company in Stevens Point, Wisconsin. Treatment options are often expensive, particularly for older workers who are more likely to suffer accompanying comorbidities, she added.
Thompson recently analyzed the claims from one insurer client and found that 70 percent of those stemmed from extremity injuries, including many shoulder issues, she said.
Similarly, Judie Tsanopoulos, director of workers’ comp and loss control at St. Joseph Health System in Orange, Calif. said that beginning about three years ago she observed a rise in shoulder injuries and incidences of frozen shoulder.
“We see far more shoulders,” Tsanopoulos said.
When she drilled into her company claims data she found that women aged 40 to 60 years old accounted for many of those shoulder issues, she said.
Other workers’ compensation experts say they have not seen an overall increase in the frequency of shoulder-related injuries. Yet despite nationwide gains in reducing injuries to other body parts, shoulder injuries are not decreasing.
An NCCI Holdings Inc. report released on July 18 states, among other findings, that from 2008 to 2012 the frequency of lost-time claims for most body parts dropped an average of 13.9 percent.
“One notable exception is that the frequency of injuries involving the arm and shoulder, which represent more than 15 percent of all injuries, remained flat over the period,” dropping only 1 percent, according to NCCI’s frequency report.
In contrast, lower back claims dropped 15 percent during the period while upper back claims dropped 7 percent. Upper back claims showed the least amount of claims decline next to the 1 percent drop in arm and shoulders among body parts.
NCCI’s report stated that the flattening trend in arm and shoulder frequency “may be influenced by an older workforce, where rotator cuff injuries are not uncommon.”
Prior to the flattening in lost-time arm and shoulder claims seen from 2008 to 2012, injuries to those body parts had been declining. They decreased 13 percent from 2004 to 2008 while frequency for all lost-time injuries dropped 17 percent, said Jim Davis, an NCCI director and actuary.
In addition to an aging population more likely to suffer shoulder injuries, more treatments may be occurring today when workers complain about shoulder pain.
In contrast to 20 years ago, doctors are increasingly able to diagnose and address shoulder pain complaints that previously went untreated, said Ira Posner, an MD, orthopedic surgeon, and consultant to third party administrator Broadspire.
“So you are seeing a lot more people with a diagnosis now that we couldn’t make before,” Posner said. “People would present with shoulder pain and we didn’t know why they hurt — now we know why they hurt.”
The improved medical quality means doctors are able to help more workers while workers’ comp payers may now be feeling the increase in shoulder treatments.
“That is why you are seeing more pathology in the shoulder being treated, because we understand the shoulder better and we are able to do more for complaints of shoulder pain,” Posner said.
One cost mitigating factor, however, stems from a shift from conducting mostly open shoulder surgeries to performing more orthoscopic and outpatient treatments, added Jacob Lazarovic, senior VP and chief medical officer at Broadspire.
Still, shoulder injuries typically require more recovery time than do other body parts, experts said.
“Recovering from shoulder surgeries is a pretty prolonged process in the best of cases, but it would be even more prolonged for older workers,” Lazarovic said.
The complexity of shoulder joints adds to the problem, medical experts said.
In addition to a longer recovery time, shoulder injuries such as those requiring rotator cuff surgeries make it challenging for employers to return workers to certain jobs, such as those requiring overhead lifting, said Teresa Bartlett, senior VP and medical director at Sedgwick Claims Management Services Inc.
“Shoulder injuries in general are problematic,” Bartlett said. “Regardless of age, it’s the mechanism of the shoulder that tends to be very difficult.”
In response, Thompson at Encore Unlimited is seeing employers increasingly interested in shoulder protection and corresponding loss control programs.
“Anytime you have an injury group that is driving your claims costs, as an employer you have to evaluate what can you do to eliminate some of that risk,” such as making sure the worker fits the job, she said.
State PDMP Regulation Important for Opioid Control
In July, the CDC’s monthly report Vital Signs identified the states with the highest and lowest prescription rates for opioid painkillers — and the range is wide. While most states have some form of a prescription drug monitoring program (PDMP), their levels of effectiveness vary widely due to differences in enforcement and a lack of consensus over the appropriateness of opioid prescriptions.
“Health care providers wrote 259 million prescriptions for painkillers in 2012, enough for every American adult to have a bottle of pills,” the report said. Alabama and Tennessee were the highest-prescribing states, writing 143 painkiller prescriptions per every 100 people.
The report also gave kudos to states that have decreased opioid usage through tightened PDMPs and state enforcement. In the continental U.S., California had the lowest rate of prescriptions written in 2012 (second only to Hawaii overall), with opioids prescribed for only 57 out of every 100 people, compared to the national average of 82.5. In fact, California’s numbers were below average for all types of opioid pain relievers, including high dose, long-acting and benzodiazepines.
The state’s success can be attributed to its Controlled Substance Utilization Review and Evaluation System (CURES). The drug monitoring program requires dispensing pharmacy clinics to submit reports of all Schedule II through IV prescription drugs to the Department of Justice at least once per week, making its database an almost real-time source of patient prescription history. Health care practitioners can access the database to see a patient’s prescription history for painkillers dispensed anywhere in the state.
“Automated Patient Activity Reports (PARs) are available to physicians who log into their online PDMP accounts,” said Larissa Mooney, assistant clinical professor of psychiatry and director of the Addiction Medicine Clinic at UCLA. “These reports allow instant viewing of controlled substance prescription histories over designated time periods. Information provided by this database is one step towards reducing abuse and diversion of prescription drugs and their associated consequences.”
According to California’s Department of Justice website, the database contains over 100 million entries and responded to 1,063,952 report requests in fiscal year 2011-2012. Unlike other states, California does not require physicians to use the database before prescribing high-strength painkillers; their decisions to view patient histories are completely voluntary.
Dr. Karen Miotto, a physician in UCLA’s psychiatry and biobehavioral sciences department and leader of its addiction psychiatry services, told the CDC that supportive state agencies and medical associations have also bolstered the program, promoting its use through education initiatives.
Lack of addiction education in medical schools and too few substance abuse resources can undermine drug monitoring programs’ success.
“Physicians vary widely in their knowledge of substance use disorders and their ability to identify, diagnose and treat such disorders,” Mooney said. “Educating physicians on addiction risk factors, screening and clinical interventions could facilitate increased use of PDMP programs and incorporation of controlled substance prescription monitoring within clinical practice.”
Better education could spur physicians to identify patients at risk for addiction, seek alternative drugs for pain management, and prescribe only the lowest possible dose of opioids when necessary.
“Health care providers wrote 259 million prescriptions for painkillers in 2012, enough for every American adult to have a bottle of pills.”
— CDC Vital Signs; Opioid Painkiller Prescribing: Where You Live Makes a Difference; July 2014
In addition to lack of education, the report notes another key struggle states encounter with PDMPs is “complicated access and notarization procedures.” This is an area where state governments could intervene, creating policies to help streamline the process for those submitting and accessing data. California may have had an easier time with this since CURES is administered by its Department of Justice, rather than a pharmacy board or licensing agency, or Health and Human Services department.
State policies tightening regulation of for-profit pain clinics — or “pill mills” — could also reduce the prevalence of opioid prescription for non-medical use, a significant driver of demand for the drugs.
Another barrier may be the lack of a national database. Even in states with effective PDMPs, practitioners have an incomplete picture, seeing only what painkillers a patient has received in their own state but not others. While no plans for a national resource exist, the CDC report said the federal government can assist state PDMPs by “supplying health care providers with data, tools, and guidance for decision making based on proven practices,” and “increasing access to mental health and substance abuse treatment through the Affordable Care Act.”
Global Program Premium Allocation: Why It Matters More Than You Think
Ten years after starting her medium-sized Greek yogurt manufacturing and distribution business in Chicago, Nancy is looking to open new facilities in Frankfurt, Germany and Seoul, South Korea. She has determined the company needs to have separate insurance policies for each location. Enter “premium allocation,” the process through which insurance premiums, fees and other charges are properly allocated among participants and geographies.
Experts say that the ideal premium allocation strategy is about balance. On one hand, it needs to appropriately reflect the risk being insured. On the other, it must satisfy the client’s objectives, as well as those of regulators, local subsidiaries, insurers and brokers., Ensuring that premium allocation is done appropriately and on a timely basis can make a multinational program run much smoother for everyone.
At first blush, premium allocation for a global insurance program is hardly buzzworthy. But as with our expanding hypothetical company, accurate, equitable premium allocation is a critical starting point. All parties have a vested interest in seeing that the allocation is done correctly and efficiently.
“This rather prosaic topic affects everyone … brokers, clients and carriers. Many risk managers with global experience understand how critical it is to get the premium allocation right. But for those new to foreign markets, they may not understand the intricacies of why it matters.”
– Marty Scherzer, President of Global Risk Solutions, AIG
Basic goals of key players include:
- Buyer – corporate office: Wants to ensure that the organization is adequately covered while engineering an optimal financial structure. The optimized structure is dependent on balancing local regulatory, tax and market conditions while providing for the appropriate premium to cover the risk.
- Buyer – local offices: Needs to have justification that the internal allocations of the premium expense fairly represent the local office’s risk exposure.
- Broker: The resources that are assigned to manage the program in a local country need to be appropriately compensated. Their compensation is often determined by the premium allocated to their country. A premium allocation that does not effectively correlate to the needs of the local office has the potential to under- or over-compensate these resources.
- Insurer: Needs to satisfy regulators that oversee the insurer’s local insurance operations that the premiums are fair, reasonable and commensurate with the risks being covered.
According to Marty Scherzer, President of Global Risk Solutions at AIG, as globalization continues to drive U.S. companies of varying sizes to expand their markets beyond domestic borders, premium allocation “needs to be done appropriately and timely; delay or get it wrong and it could prove costly.”
“This rather prosaic topic affects everyone … brokers, clients and carriers,” Scherzer says. “Many risk managers with global experience understand how critical it is to get the premium allocation right. But for those new to foreign markets, they may not understand the intricacies of why it matters.”
There are four critical challenges that need to be balanced if an allocation is to satisfy all parties, he says:
Across the globe, tax rates for insurance premiums vary widely. While a company will want to structure allocations to attain its financial objectives, the methodology employed needs to be reasonable and appropriate in the eyes of the carrier, broker, insured and regulator. Similarly, and in conjunction with tax and transfer pricing considerations, companies need to make sure that their premiums properly reflect the risk in each country. Even companies with the best intentions to allocate premiums appropriately are facing greater scrutiny. To properly address this issue, Scherzer recommends that companies maintain a well documented and justifiable rationale for their premium allocation in the event of a regulatory inquiry.
Insurance regulators worldwide seek to ensure that the carriers in their countries have both the capital and the ability to pay losses. Accordingly, they don’t want a premium being allocated to their country to be too low relative to the corresponding level of risk.
Without accurate data, premium allocation can be difficult, at best. Choosing to allocate premium based on sales in a given country or in a given time period, for example, can work. But if you don’t have that data for every subsidiary in a given country, the allocation will not be accurate. The key to appropriately allocating premium is to gather the required data well in advance of the program’s inception and scrub it for accuracy.
When creating an optimal multinational insurance program, premium allocation needs to be done quickly, but accurately. Without careful attention and planning, the process can easily become derailed.
Scherzer compares it to getting a little bit off course at the beginning of a long journey. A small deviation at the outset will have a magnified effect later on, landing you even farther away from your intended destination.
Figuring it all out
AIG has created the award-winning Multinational Program Design Tool to help companies decide whether (and where) to place local policies. The tool uses information that covers more than 200 countries, and provides results after answers to a few basic questions.
This interactive tool — iPad and PC-ready — requires just 10-15 minutes to complete in one of four languages (English, Spanish, Chinese and Japanese). The tool evaluates user feedback on exposures, geographies, risk sensitivities, preferences and needs against AIG’s knowledge of local regulatory, business and market factors and trends to produce a detailed report that can be used in the next level of discussion with brokers and AIG on a global insurance strategy, including premium allocation.
“The hope is that decision-makers partner with their broker and carrier to get premium allocation done early, accurately and right the first time,” Scherzer says.
For more information about AIG and its award-winning application, visit aig.com/multinational.