Here are a few notable items for your consideration.

Joe Paduda

Claim costs are up, driven by indemnity and medical expenses, but — and it is a BIG but — medical cost increases in comp have been significantly lower than in the real world: Medicaid, Medicare, group health and the exchanges.

Optum’s effort to sell its workers’ comp business seems to be ... stuck. Multiple sources indicate there’s not much interest among potential financial buyers. This is the sixth time that owner United Healthcare has gotten into comp, only to exit.

Some are speculating that the current freeze in the private debt markets is a factor. My sense, and I am not an expert, is that if it is a factor, it is not the primary driver.

Rather,

• Optum has historically not invested in work comp businesses. 
• It has managed them tightly, with the ever-present quarterly earnings report a key driver.

Here’s what I wrote on this a few years ago:

• At various times, the company (UHC) owned a technology business focused on bill review (Power-Trak, later sold to Mitchell); MetraComp, a WC PPO and managed care firm (and a former employer); and Focus (this one is of some interest to one reader in particular).
• Here is a brief note on UHC’s ill-fated entry into workers’ comp insurance back in the '90s. (Spoiler alert: That damn tail will always get you.)

Much more recently, UHC’s Optum got into the work comp PBM business in a very big way, buying Catamaran.

WCRI’s must-read CompScope series is out, free to members and a nominal fee for the rest of you (who should be members). The accompanying webinar recording is here. 

Key takeaway: As always in work comp, interstate variations can be massive, e.g., costs zooming up in some states and relatively flat in others.

What does this mean for you?

Get the CompScope reports.

Do not get into businesses unless you really know what you are getting into.

I know: Once again, I’m screaming into the void.

Joseph Paduda is the principal of Health Strategy Associates, a consulting firm focused on improving medical management programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.