Year: 2016

Mar
16

The Opioid Pendulum Swings

Posted by Joe Paduda on Wednesday, March 16th, 2016 | Comments

The CDC guidelines are out, and that’s a very, very good thing.

Yes, there’s an apparently-reasonable argument that the guidelines’ basis is not sufficiently evidence-based to stand up to the most rigorous standards.  There are two reasons that argument fails.

First, opioid advocates, manufacturers, and most prescribers did not worry about “evidence” when pills by the bucketful were prescribed and dispensed to anyone who presented with a sore back.  For advocates to caterwaul about science, evidence, and a lack of randomized controlled trials lasting more than 12 months is unfair at best.

Second, opioids kill more than 24,000 people a year – likely a lot more.  Mothers, daughters, sons, brothers, fathers are dying every day, causing destitution, devastated families, and disaster for communities. The time for half-measures is long past.

I understand this may lead to a few folks who ostensibly “need” opioids not getting their pills quickly or in the volume they desire.

Ask yourself this – how does this “need” stack up against the deaths, ruined communities, and parent-less children caused by rampant overuse of opioids?

I’d imagine the parents, siblings, and friends of those killed by opioids would be only too happy to wait a while or take another drug or try exercise or…

 

Mar
15

Who needs experts anyways?

Posted by Joe Paduda on Tuesday, March 15th, 2016 | Comments

Recent personnel/management changes by two big work comp payers are causing some to wonder who’s in control of medical management buying decisions – and whether senior management fully grasps the implications of those changes.

While two examples do not a trend make, if two of the top five work comp insurers are increasingly relying on financially-oriented staff and/or procurement departments to

  • develop medical management strategy,
  • devise evaluation methodologies, and
  • evaluate and select vendors,

they are headed down the wrong path.

Most recently, the Hartford suddenly terminated several senior staff in the medical management strategy and clinical support area.  The highly experienced and very well regarded people were reportedly told their services were no longer required; it appears the entire “department” was shut down, so the staff was no longer needed.

Let me state up front that I:

  • tried repeatedly (as in, six separate, increasingly-pleadingly attempts) to get the Hartford to respond to specific questions about the company’s strategy and intentions and got back a corporate-speak response (see below)
  • asked specific questions about the department affected and its future, and received no response whatsoever except the “we do not comment on specific decisions or changes, whether at the individual or department level” even after I specifically asked about the Strategy and Clinical support “department’s” future role and what area/department/group would assume their responsibilities.
  • have not spoken to ANY current Hartford personnel about this except the communications folks – who, to their credit – appear to have diligently tried to get a useful response from those in the know.

Thus I am left with no option but to engage in educated conjecture about the reasons behind the Hartford’s apparent decision to shut down the company’s Workers Compensation and Group Benefits Claim Strategy and Clinical Support group.

It can’t be that the group’s leader was getting close to the “magic 80”, when the combination of age and years served ensures the individual of a pension and other retirement benefits.

It may be a desire to reduce expensive overhead.  The staff in this department are highly tenured and likely well-compensated, and thus expensive.  Unallocated Loss Adjustment Expense is increasingly concerning to insurers intent on delivering profits despite market pressures to cut premiums and lower rates.  With few exceptions claims departments are always looking for ways to cut overhead.

It’s not a competence or effectiveness issue. The folks now looking for work are very, very good.  The Hartford’s work comp medical management program is solid, primarily due to the efforts and intelligence of this department along with very strong medical directors.  Their approaches to opioid management, MSAs, and disability ratings are innovative, effective, and low cost.

Regardless of the rationale, it does appear that the Hartford will be relying less on medical management experts to make decisions about managed care programs and strategies, ceding authority and responsibility to folks that, while expert and experienced in procuring and/or other areas in general, do not have the depth and breadth of experience, the decades of accumulated knowledge, the analytical expertise, the industry knowledge, nor the operational knowledge critical to ensuring the 60 percent of claims dollars spent on medical care are spent wisely and prudently.

More broadly, a shift towards a more financially-focused strategy and clinical support function is, in my mind, problematic for any carrier.

I won’t wax eloquent about how the group health industry’s indemnity carriers were crushed by HMOs that understood their business was not insurance but health care delivery – even though that’s true, and instructive indeed.

I will note that 60% of claims expense is MEDICAL, medical drives much of indemnity, and some/many claims execs seem stuck in the days when indemnity was the majority of spend. And I’ll add that the given the rapid evolution in health care delivery; provider consolidation; major changes in reimbursement; the growing impact of ACOs, medical homes, and alternate delivery systems; a deep understanding of health care delivery is critical to long-term success in workers’ comp.

The impact of these changes likely will be felt more quickly than anticipated.  All payers must move faster, evolve more rapidly, and address opportunities more efficiently tomorrow than they do today.  That’s just the reality of the increasing speed of change in health care.  Those that have the experience, depth of understanding, and expertise are going to do better than those that focus on short-term “gains”.

What does this mean for you?

  1. There are a few really talented, smart people now available.
  2. There’s opportunity aplenty in doing medical management better – if you have a) expertise and b) understand how to use that expertise.
  3. Medical management ≠ accounting
  4. Old-school PR policies and Corporate-speak responses are inadequate, unhelpful, and counter-productive. Engaging with social media, talking with bloggers and reporters, especially when those bloggers are trying to help your company explain what it is doing is far better than the alternative – dealing with the aftermath.

Note: Re the Hartford, sources indicated to me that procurement will likely be involved more in this area going forward. I checked repeatedly with the Hartford on this;  Tom Hambrick in communications at the Hartford asserted:

“Procurement does not play a role in our workers compensation medical management decisions.”

I did clarify in a subsequent email to Tom that I was referring not to claim-specific issues but rather to strategy, vendor selection, and program evaluation; as of the time of the initial publication of this post I had not received any further clarification or explanation from the Hartford.

All due respect to Mr Hambrick and the Hartford, re procurement, that’s not my experience nor is it consistent with what credible sources told me.  I’ve sat in meetings in the Hartford’s offices where vendors presented to several Hartford employees – including procurement/purchasing staff.  These staff were involved in subsequent follow up emails and conversations.  I also checked with former (as in left several years ago) Hartford folks and they confirmed procurement’s involvement in this area.

The Hartford’s original response:

We appreciate your patience and for providing us with an opportunity to respond. As I’m sure you understand, we do not comment on specific personnel decisions. Regarding the changes more broadly, we regularly assess our business needs and make structural refinements to ensure we have the appropriate resources to deliver on our strategies and priorities. The Hartford is committed to continued leadership and innovation in workers compensation and claims management. Our Claims organization is focused on helping our customers in their time of need while always seeking to improve claim outcomes, and we are confident in the talent and capabilities of our claims and clinical professionals.

Mar
11

Physician dispensing, opiods and efforts to control same

Posted by Joe Paduda on Friday, March 11th, 2016 | Comments

The last session at WCRI focused on my least favorite topics – doc dispensed drugs and opioids. note findings are preliminary and subject to change.

From Dongchun Wang, doc dispensing.

My takeaways.

Price-focused controls don’t work to control physician dispensing.  Sure, they work over the short term, but the dispensing industry quickly circumvents those price controls by coming up with novel new drugs, increasing the volume, or finding higher base-cost drugs to dispense to their patients.

In fact, prices for doc dispensed drugs-actually INCREASE quarter by quarter post-implementation of price-based controls.

For those of us who’ve been stuck fighting a barely even battle against the profiteering crappy docs and their supporters who do this, this is NOT new news.

Perhaps the to-be-released study will energize payers and employers to finally ban doc dispensing, and/or drive adoption of pharmacy direction (this last is the only real solution), we’ve seen doc dispensing rise even in states that technically ban or severely restrict doc dispensing

Argh.

Opioids.  Vennela Thumula PhD talked about opioids.  Double Argh.

Okay, the good news is the amount of opioids per claim has decreased somewhat over the last few years, with almost every state seeing a drop (except WI).

  • About 30% of patients that get opioids only get one script – which is fine.  Acute injury, quick treatment, all good…
  • but 70% of so get more than one – and therein lies the issue.
  • NY LA and PA have much higher opioid usage than the average, with NY and LA patients getting well over 3000 MEDs per claim. THIS IS INSANE.
  • the average worker in Louisiana got 7 scripts, due largely to the large percentage of workers who used opioids for more than six months.
  • A significant percentage of opioid-taking claimants were also dispensed benzodiazepines.  WTF are these people thinking?

Drug testing has increased over the last few years – which is fine, except that the top 5% of claimants in LA are getting tested 11 times for 12 substances per test – and the average test costs just under $1200.

This is almost certainly driven by physician-owned labs, which have proliferated over the last few years.  (full disclosure – Millennium Health is a consulting client).

What does this mean for you?

We have a very, very long way to go.

Mar
11

Bob Hartwig – fast, frenetic, and fascinating

Posted by Joe Paduda on Friday, March 11th, 2016 | Comments

In one of his final appearances as President of III, Bob Hartwig PhD dove into the sharing or “gig” economy.

In a futile attempt to keep up with Bob’s frenetic pace, here’s my as-it-happens recording of his main points…

  • insurance is evolving to address coverage gaps for those who drive for Uber and Lyft, rent rooms via AirBnB, do work via TaskRabbit or Handy or laundry via Washio.
  • lots of variation by state e.g. Uber drivers are employees in CA but not in other states
  • smartphone usage is driving this – 50% of all adults worldwide have one – because it costs nothing to pair labor with demand – a revolutionary change
  • the tradition of the “good job” is only 135 years old…
  • Optimisitic folks think this frees workers from centraiized, often sclerotic  firms, enables workers to get paid more and work where they want when they want
  • Pessimistic folks see many jobs disappearing, the end of benefits, no investment in training and an increasingly difficult environment for those with low skills and education.
  • 22% of Americans have offered services in the sharing economy, most are male, young, minority, and urban.  All, coincidentally, categories at higher risk for work comp injury.
  • 71% of sharers are positive about the experience, AND 58% agree that the industry is exploiting a lack of regulation.
  • many “sharing” jobs are subject to automation
    • think Uber drivers – but its going to take a while (I disagree, it’s coming much faster than Hartwig thinks)
Mar
11

Health care delivery varies a LOT – and there’s your opportunity

Posted by Joe Paduda on Friday, March 11th, 2016 | Comments

So, medicine is a science right?

If it is, then the delivery of care should be consistent across the country for patients with identical conditions, right.

Absolutely not.

That’s the quick takeaway from a terrific panel this morning at WCRI; below is the detail.

I’ve long been intrigued by the huge variation in medical care delivery across geography – why medical care for identical conditions for the same type of patient varies greatly from place to place is pervasive, fascinating, and, more to the point, driver of low quality and high cost care.

Dr Jon Lurie of tjhe Dartmouth Institute for Health Policy is one of the nation’s leading experts on this issue.  I’ll get right to the big finding –

There’s tremendous variance in “preference and supply-sensitive medical care” across hospital regions, defined as medical care for procedures such as vertebroplasty, spine surgery, total joint arthroplasty, and, in reality, most musculoskeletal procedures.

The most gross example is vertebroplasty, which varies by a hundred-fold.

That’s right, if you live in one area, you may be 100 times more likely to get this procedure than in another area.

Frequency of the medical procedures done in work comp varies widely across the country, and even within states.  Discussing one type of procedure, authors of a study found; “orthopedic surgeons’ opinions or enthusiasm for the procedure was the dominant modifiable determinant of ara variation.”

In English, doctors’ opinions and enthusiasm – not science, evidence, or outcomes – greatly influences what procedures get done how often.

Shockingly, reimbursement also affects procedure usage.  Washington and California have very different approaches to spinal fusion due to regulatory influences, with WA regulating the procedure much more tightly.  As a result, in WA, costs are lower, outcomes much better, there are far fewer spinal fusions, and the surgeries that are performed are less complex.

Yep, costs are lower, outcomes are better – and, not coincidentally, patients are much better served due to WA’s widespread use of evidence-based medical guidelines.

Next up was WCRI’s Dr Oleysa Fomenko – who got everyone’s attention with the opening statement “why are injured workers in one state three times more likely to get surgery than workers in another state?”

Key takeaway – in general, the higher the rate of surgery in group health, higher the rate of surgery in WC.  So, a payer can look at Medicare data and get a fairly accurate picture of what they can expect to see among their work comp patients.

However (there’s always a however), states that pay really, really well for surgery for work comp patients have a lot more surgeries than one would expect.

Alas, the Land of Lincoln is, once again, our poster child for bad outcomes – the work comp surgery rate is 2.5 times higher than one would expect, due perhaps to the $11,000 higher reimbursement for the procedure in IL vs the other study states.

NCCI’s Barry Lipton led off the panel with a discussion of cost variation across six states, using a methodology that took out fee schedule variations. The takeaway – costs for initial care for knee injuries varied by 71% across the six states, with KY CO and IL well above the other three (MD IN MO).

For knee injuries, one of the differentiators is, not surprisingly, utilization – with MD IN and MO exhibiting low utilization.  Utilization of surgery and physical medicine [PM] are the primary drivers.  There are also differences between and among the high-cost states. KY has much higher surgical costs, with IL spending a lot more on PM.

The other differentiator is the cost associated with diagnoses; cost per diagnosis varied widely across the study states.

Across the three high cost states, surgical utilization accounts for 35% of the cost compared to 23% in the low cost states; in contrast diagnostic imaging accounts for 32% in low cost states and and 24% in high cost states (other cost areas are pretty similar).

That said, looking at elbows and knees, most of the interstate variation is due to surgical and PM utilization AND how specific conditions get different treatment in different states.

For those patient and nerdy enough to make it this far, give yourself a new pocket protector as a reward.

What does this mean for you?

Medicine is a lot art and varies widely, and therein lies the problem – and for smart payers, the opportunity.

 

Mar
11

Takeaways from WCRI Day One

Posted by Joe Paduda on Friday, March 11th, 2016 | Comments

WCRI has become a MUST DO conference for all involved in the industry; there are over 400 attending this year.  Here’s a quick morning-after takeaway list.

  • Differing views on the afternoon devoted to Opt-Out; some felt it was too much time for too esoteric a topic; it’s only available in two states.
  • In contrast, others felt it was time well spent as there is a growing interest in opt out in several states, so getting the facts (such as they are) and hearing from pro- and opponents at the same venue was quite valuable.
  • John Ruser “fits” very well.  John has a style and persona that is ideal for WCRI’s new leader; he is humble, thoughtful, and very, very knowledgeable. Kudos to WCRI’s Board for their selection of John.
  • There is an epic battle shaping up in California over UR and IMR between the self-described “claimant advocates” and employer communities.  As this is taking place in the state with over 20% of total work comp premium, the stakes could not be higher.
  • There’s a LOT of work yet to be done to understand the potential impact of ACA and health reform on comp.  This is an area where WCRI needs to spend a lot more time understanding what actually happens in the patient encounter and billing decision process, how the health care delivery “system” functions, how financial flows work in group health, and what motivates physicians.

This morning, a deep dive into disability payments and drivers thereof…

Mar
10

More than one truth – California workers’ comp

Posted by Joe Paduda on Thursday, March 10th, 2016 | Comments

Before we jump into the above-cited topic, courtesy of the ever-enlightening Alex Swedlow, are Myths and Facts about work comp

  • States with larger work comp agencies do NOT have higher work comp costs.  Nor is there a correlation due to red- or blue-state status.
  • There is no correlation between fee schedules and total medical costs
  • The arrival of an attorney on a claim (a quarter of CA claimants have attorneys) directly and significantly increases claim costs.
  • There’s a strong correlation between attorneys per capita and work comp costs. Alex shared a great heat map illustrating this in various regions of Cali; shockingly SoCal has higher attorney involvement rates.

So, why is California’s WC medical so hard to manage?

  1. It’s a very big state in terms of people and size
  2. Almost no shared risk; copays, deductibles, etc that influence buying decisions
  3. Disputes and dispute resolution have been a major issue

It’s this last issue that has gotten much of the attention – so CWCI has done a lot of research and published numerous studies on UR, IMR, dispute resolution and related matters.

There are two key takeaways – the vast majority of requested services flow thru the system without any review, and there’s a core group of bad actor docs who are flooding the dispute resolution system with requests for services that they know full well are going to be rejected. (this last is my interpretation).

Typically, once a utilization review system is put in place along with clinical guidelines, providers learn what will and will not be approved, and modify their behavior accordingly. For some reason, that hasn’t been the case in California, where the volume of IMR decisions increased by 15% from 2014 – 2015 – the opposite of what happened in TX.

Digging deeper, the aberrant behavior is concentrated in SoCal, due primarily to a relatively tiny number of physicians in Los Angeles.

In fact a mere 10 providers were responsible for one of every eight IMR decisions. And, 128 docs generated 48% of all IMR decisions.

These appeals are driven in large part by pharmacy – California’s annual spend on WC drugs is around a billion dollars, and about half of IMR decisions revolve around pharmaceuticals.  If CA implements a formulary, this spend could be cut by 15% to perhaps 50%.

Clearly the issue in California is NOT the wholesale denial of necessary care. Rather, it IS the fact that a very, very few providers are abusing the system while trying to deliver crappy medicine to their work comp patients.

Mar
10

How workers fare under work comp varies across states

Posted by Joe Paduda on Thursday, March 10th, 2016 | Comments

That’s the top takeaway from the second presentation at WCRI’s annual meeting.

The researchers interviewed 6000 injured workers on topics including access to and satisfaction with health care, recovery of health and functioning, and speed/sustainability of return to work. (preliminary findings, results may change); efforts were made to control for factors that might affect results.

Across the 15 states, “substantial” return to work varied from 91% in IN to 81% in GA (sustained across at least 30 days, with the median of 14%.

My reaction is probably same as your’s; that’s awful.

Digging into the data indicates there’s a lot more to this.

  • there’s a very solid improvement in health status across the surveyed population post injury;
  • however the average respondent is still significantly less functional/has a significantly lower health status post-injury
  • on average one in six injured workers reported “big problems” getting the medical services they wanted. (I know, that care may or may not be medically necessary or indicated)
    • a third of those workers said the problem was due to their employer or insurer discouraging them from going to a provider they wanted to see or getting a procedure (again, paraphrasing).
  • 14% of workers were “very dissatisfied” with overall medical care
  • Wisconsin consistently ranked better than most or all other study states; it’s also one of the highest medical cost states.
    • David Deitz MD noted that all the research into health care costs and quality show no correlation between expenditures and outcomes.

Kudos to WCRI for conducting this research; ultimately the work comp system and stakeholders therein should be judged based on outcomes.  That said, don’t make the mistake of taking results at face value.

Digging into data always reveals details that may confound or contradict initial impressions.

Mar
10

Reimbursement’s effect on case shifting to work comp

Posted by Joe Paduda on Thursday, March 10th, 2016 | Comments

WCRI’s annual meeting began with a presentation on the relationship of fee schedules to case shifting.  Put another way, does physician compensation affect categorization of claims as work comp?

This followed their previous study (discussed here) on the impact of capitation on case shifting (kudos to WCRI for allowing me to present a different view in their webinar on the topic).

(note the report discussed herein is based on preliminary findings and subject to change)

The basic question addressed was “do higher fee schedules increase the number of workers’ comp cases?”  More specifically, do treating docs categorize claims as work comp because they make more money under work comp?

The research looked at knee arthroscopies across a couple dozen states; there was some consistency in prices paid in those states for group health claims; notably several states had much higher reimbursement for work comp than group health (CT, IL, NJ are three).

Key finding – “A 20% growth in WC reimbursement rates for office visit related services equates to a 6% increase in the odds of a soft tissue injury being called work related.” [paraphrase, may not be exact quote]

In contrast, there was no difference in trauma-related cases, which implies providers

David Deitz, MD noted a key consideration not addressed – the microgeography of health care varies quite dramatically within states and may be an important driver; this may be a fruitful area for further investigation. (the Truven database doesn’t allow for this type of analysis) Dr Deitz also noted the American Academy of Orthopedic Surgeons evidently recommends physicians consider type of coverage when determining whether or not to perform surgery.  (paraphrasing Dr Deitz)

Notably, patients may get significantly richer benefits if the claim is determined to be work comp due to indemnity benefits.

The researcher, Dr Olesya Fomenko, determined that two states in particular saw significant financial impact of this; there was a multi-million dollar impact in IL and TX due to the higher medical costs AND indemnity expense associated with the “higher number” of work comp cases due to case shifting.

A key question not addressed is this: how is the treating doc’s pay affected by the payer type?  Not the overall reimbursement differential, but the payment to the doc who actually makes the causation determination.