Category: Health Policy

Mar
29

Obama, Pew, Landers and Paduda

Posted by Joe Paduda on Tuesday, March 29th, 2016 | Comments

Headed to Atlanta for Operation Unite’s fifth Rx Drug Abuse Summit, an event I’ve been privileged to participate in every year (this year Mark Pew of Prium, Michelle Landers of KEMI, and I are going to discuss formularies in work comp, an issue near and dear to my heart).

This year, President Obama is also speaking.

Think about that.

The leader of the free world is taking a day to fly down, talk, and fly back.  It’s not like the guy has nothing else on his plate – the Middle East, Apple v FBI, global warming, Congress, SCOTUS nomination of Merrick Garland, Pakistan, Iranian cyber attacks, China, trade policy…

and yet Pres. Obama a) decides to go to Atlanta; b) does the prep work necessary to speak on a panel about opioid policy, the FDA, drug approvals, law enforcement, heroin, treatment v incarceration; c) make the trip with all that entails; and d) speak on the panel.

While I’m pumped he decided to make the trip, I’m equal parts disheartened that the President of the United States has to do this.  Moreover, there’s a really impressive list of speakers; Governors, Congresspeople, the US Surgeon General, head of the FDA, Senators, head of the DEA, the CDC Director…

Those of us who’ve been up to our eyeballs in the crisis for a decade are gratified indeed to see the level of attention focused on the issue, and sad beyond measure that this has risen to the level that the President is devoting this amount of time to opioids.

What does this mean for you?

I’d suggest we focus on the positive here, as the negative is just emotionally crushing.

Mar
21

Gov. Baker gets it right on opioids, we got it wrong on crack

Posted by Joe Paduda on Monday, March 21st, 2016 | Comments

On opioids, Massachusetts Governor Charlie Baker (R) has been in the forefront, working with the Democratic-led legislature on intelligent, comprehensive legislation designed to save lives, assign accountability, and reduce costs. The passage and adoption of HB4056 shows what can be done – and what should be done – by every state.

Yet there’s something unsettling about this – for me and for many others.  More on that in a minute.

Friend and colleague David Deitz MD, also a member of the Mass Healthcare Services Board, was involved in this process; here’s his take:

Gov. Baker and his administration have shown real leadership in addressing this issue, and it’s important to note that other groups within the Commonwealth, notably the Department of Industrial Accidents and the Massachusetts Medical Society, have also acted in concert to address problematic opioid prescribing.  The MA Healthcare Services Boards’ guidelines have been updated to reflect the new legislation so there are no inconsistencies.  Much work remains to be done, but this is a good step forward that puts important protections in place for injured workers, in particular.”

Key components of the bill include:

  • a seven-day limit on first-time opioid prescriptions,
  • new efforts to evaluate patients within 24 hours after an overdose,
  • addiction screening for middle and high school students.
  • requires doctors to check a state Prescription Monitoring Program each time they prescribe an addictive opioid to prevent someone from getting prescriptions from multiple doctors;
  • incorporates education about opioid addiction into high school sports training; and
  • establishes a drug stewardship program to dispose of unneeded drugs.

The other 49 states would do well to consider similar legislation.

What bothers me about my/our focus on opioids is that the victims of opioids are generally white, with many middle-class.  Did we – me, you, the powers-that-be, legislators, governors – handle this differently than the crack or “pre-opioid” heroin crisis?

Yes.  And that’s just wrong.

Back when crack and heroin were predominantly a poor and minority issue, it was a crime problem.  Policing, criminal prosecutions and jail time were the approach.  Just contrast the sentencing guidelines passed by Congress and signed into law in the eighties with the legislation pending before Congress today. Crack sentences were 100 times longer than those for powder cocaine.  Today, the bills are all about naloxone, buprenorphine, and addiction treatment, brought to our attention by weeping elected officials.  Back then, it was quite a bit different.

Now that it’s affecting a wealthier and whiter population, the solution is education, prevention, compassion, a disease model of addiction.  Abusers are victims, not criminals.

What does this mean for you?

There are lessons to be learned here, some of them uncomfortable indeed.

 

Mar
17

What’s happened to work comp regulation?

Posted by Joe Paduda on Thursday, March 17th, 2016 | Comments

In response to my post on payers shifting medical management strategy decision-making from experts to non-experts, a long-time friend and colleague provided his perspective. With forty years in roles ranging from regulator to compliance consultant to operations exec for payers, states, vendors and employers, he has a depth of knowledge that demands your respect and attention.

Here’s his view [with my edits for clarity]

Over the last several years states have continued to outsource their medical management policy development and implementation. 

Initially this was in the area of treatment guidelines, which seemed logical because states could not afford the staff to develop they type of canonical studies necessary to develop treatment guidelines.  That evolved into the medical fee schedule arena, first as states shifted to Medicare-based fee schedules, with regulators adjusting reimbursement up because of the nature of workers compensation. Over time, many outsourced this to a third party vendor because the state no longer had the resources to develop, update, distribute, and manage fee schedules and the schedules’ associated rules.

This all centers around the budget restraints that states are currently experiencing. 

While most of the administrative agencies are funded by a premium or dedicated tax, legislators tend to ignore that reality and/or fail to make that distinction in reviewing budget requests. [Whether it is the new-found “Cut Taxes!’ orthodoxy or just ignorance, the effect is the same] Across the board, budget requests are denied if additional resources are requested.  More troubling, state agencies are frequently required to down size staffs because of budget short falls [due to declining tax revenues].  All agencies pay the same price; an X percent reduction in the agency budget, and year after year this takes a toll. 

The result is states outsource functions that were traditionally handled internally. Lately there’s been an increasing need for medical management policy development [physician dispensing, formularies, evidence-based clinical guidelines, network adequacy are just some of the areas]. Those states that have sought to meet this need have often had to shift the costs to the payer community, commonly in the form of licensing fees.  Costs have increased but budgets for the states have not, sort of a taxation with out representation. 

Many states have lost key staff with their historical experience and medical knowledge, thereby forcing the regulated to get their answers from the litigation process rather than guidance from the state as to the intent and meaning of the regulations adopted. 

Inevitably, carriers and employers are facing rising costs in administering a workers’ compensation claims.   More to the point, Increases in unallocated loss adjustment expense are harder to recover via rate increase requests than direct loss claim costs i.e. indemnity, medical etc.

In rate hearings attended early in my career I repeatedly observed Commissioners acknowledge direct loss costs but not allow for the full amount of increase tied to unallocated loss adjustment expenses. (the other area that commissioners attacked was trending assumptions that the carriers made.)  Since unallocated loss adjustment expenses are a fixed amount and the carriers are unable to recover those costs through rate adjustments at a pace that is equal to the actual increase in those costs, the carriers are forced to find ways to cut unallocated loss adjustment costs. 

Here’s the key takeaway.

There are two ways to do this: bundle all medical management into a package and low ball the prices paid to vendors.  Or, in the case where the carrier has retained reputable medical management staff, simply eliminate the department and all of the high-dollar qualified staff and outsource to vendors, adding the expense to claims costs. 

True you may get a work comp program that does not do a good job of reducing lost costs but that is really not a bother as loss cost increases are the easiest to recover.  This will mean higher rates to employers but it will gain profitability for the carriers and keep their shareholders happy. 

My take – What does this mean for you?

Before you complain about taxes or government inefficiency or “incompetence”, you’d do well to actually think about cause-and-effect.

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…

 

Dec
17

ACA, work comp, and case shifting – the details

Posted by Joe Paduda on Thursday, December 17th, 2015 | Comments

Last week’s webinar on ACA and the possibility of case-shifting due to capitation was quite well attended – those who could not make it can take a listen by signing up here (there’s a fee for members and non-members of WCRI).

I was honored to be asked to participate, asked to present a different perspective (namely, it’s very hard to attribute case-shifting to ACA) based on what I see as a very complex and diverse health care world.

Here are a few reasons for my skepticism.

The argument for case shifting requires several assumptions:

  • HMOs are capitated
  • there are financial incentives e.g. capitation at the primary care level
  • primary care providers are aware of the financial implications of case assignment
  • PCPs purposely assign cases to work comp based on those financials
  • the ACA will lead to more Accountable Care Organizations that will use capitation more

A couple observations.

  1. About 2/3 of HMOs use capitation to reimburse provider groups.
  2. About 60% use some form of fee for service, so many HMOs use BOTH capitation AND FFS.
  3. Almost all PCPs are NOT paid by capitation.  In fact, PCPs are most often paid by FFS.
  4. Some – but by no means all – ACOs contract with employers.  Capitated reimbursement is almost unheard of in these arrangements.
  5. The interaction of reimbursement and physician behavior is complex and by no means straight forward.

So, while the provider group is frequently capitated, the providers within that group are not.

There’s also no indication that capitation at the group level is becoming more popular under ACA.

Finally, I’d suggest that folks really interested in this take the time to dig deep into provider reimbursement under ACOs and ACA and HMOs.  It’s very complex, far from simple, and, as Jaan Sidorov illustrates so eloquently when describing a research study intended to promote standards of care:

This study should give pause to anyone who thinks that physicians can be manipulated with more money.  They live by more than bread alone.

What does this mean for you?

When you think you are starting to figure things out, it’s probably because you just haven’t looked deeply enough.

Jun
4

A work comp exec’s MUST read

Posted by Joe Paduda on Thursday, June 4th, 2015 | Comments

The health care “system’s” problems are even worse for worker’s comp.

That’s the conclusion I reached after I finally got around to finishing “Overkill“, Atul Gawande’s latest piece on the clustermess that is the American health care system.

The top takeaway is this – there is huge over-diagnosis of medical “problems” due to an over-reliance on fancy diagnostic technology, technology that far-too-often identifies physical abnormalities that have little to no effect on one’s health or functionality.

An excerpt makes the point:

Studies of adults with no back pain find that half or more have degenerative disk disease on imaging. Disk disease is a turtle—an abnormality that generally causes no harm. It’s different when a diseased disk compresses the spinal cord or nerve root enough to cause specific symptoms, such as pain or weakness along the affected nerve’s territory, typically the leg or the arm. In those situations, surgery is proved to be more effective than nonsurgical treatment. For someone without such symptoms, though, there is no evidence that surgery helps to reduce pain or to prevent problems. One study found that between 1997 and 2005 national health-care expenditures for back-pain patients increased by nearly two-thirds, yet population surveys revealed no improvement in the level of back pain reported by patients. [emphasis added]

More specific to workers’ comp, the good folks at Liberty Mutual’s Institute for Research found claimants with back pain with:

early or non-indicated MRIs led to a cascade of medical services in the six-month period post-MRI that included electromyography, nerve conduction testing, advanced imaging, injections or surgery.

These procedures often occurred soon after the MRI and were 17 to nearly 55 times more likely to occur than in similar claims without MRI.

“Being a highly sensitive test, MRI will quite often reveal common age-related changes that have no correlation to the anatomical source of the lower back pain,” said one of the researchers, Glenn S. Pransky, MD, Center for Disability Research, which is part of the Liberty Mutual Research Institute for Safety, in a statement.

According to Pransky, evidence-based practice guidelines for lower back pain recommend against early MRI except for “red flag” indications such as severe trauma, infection or cancer.

Dr. William Gaines, associate national medical director, Liberty Mutual Commercial Insurance Claims, said that the National Committee for Quality Assurance and the American Board of Internal Medicine have emphasized for years that overuse of imaging does not represent good care for low back pain.

What does this mean for you?

Our health care system is very, very good at finding physiological and anatomical “problems”.  Unfortunately, it is also very good at assuming those findings actually indicate an underlying and significant pathology.

 

Apr
24

Friday catch-up from the (still) frozen northland…

Posted by Joe Paduda on Friday, April 24th, 2015 | Comments

Hello all!

Well, (or rather, HELL!) it’s snowing in upstate New York…hopefully it’s a bit brighter where you are. Lots happened this week, so here we go.

First, this really needs a series of posts, but it’s so important that better fast than thorough. There is yet more evidence that the earning power of the vast lower-middle class (and poorer folks too) has been steadily declining.  And that’s a major issue for workers’ comp. Here’s the money quote from Neil Irwin’s piece in the NYTimes:

there really is a shift away from the sectors where less-educated workers can earn a decent living. [emphasis added] In 1990, 40 percent of the prime-age male workers without a high school degree worked as operators and laborers, a number that declined to 34 percent in 2013. Jobs in food service, cleaning and groundskeeping nearly doubled in the same span, to 21 percent from 11 percent. But it wasn’t an even trade: Pay for operators and labors was $25,500 in 2013, compared with $20,400 for the food, cleaning and groundskeeping category.

You’re not imagining it. The jobs that are being created for less-educated workers really do pay less than the ones that are being lost. [emphasis added]

What does this mean for work comp?   A few things come to mind.

  • if good-paying jobs continue to disappear, it is going to be increasingly hard to re-employ injured workers in positions where they earn the same pay they did pre-injury
  • comp premiums may decline slightly due to lowered covered payroll
  • we may see more longevity and less movement among workers currently in those jobs, meaning there are fewer opportunities for experienced workers to get re-employed
  • it’s theoretically possible that people working at jobs that are disappearing may see workers’ comp as a safety net

The net is the work comp system is going to be dramatically affected by this economic trend.  We need to be talking about it now, thinking about the potential implications, and seeking solutions – now.

The Catamaran acquisition of Healthcare Solutions was followed almost immediately by United Healthcare’s announcement that the company is going to buy Catamaran. Personally, I think HCS was the linchpin of the Catamaran – Optum deal; HCS’ unique position in the WC PBM, bill review, network, and related businesses made Catamaran so darn attractive UNH ponied up $14 billion just to get in the WC game.

Well, maybe not.  More seriously, UNH will own the third largest PBM, trailing only CVS/Caremark and Express Scripts, Inc.  The combination of OptumRx and Catamaran will fill about a billion scripts this year.  Catamaran itself was a relatively small player a decade ago; it grew rapidly via acquisition and diversification (along with ESI it is the only PBM active in the work comp and auto sectors).

With this transaction, UNH continues to diversify; the chart on page 2 provides a rather striking view into just how diversified this former HMO company has become.  For some, $14 billion seems like a lot of cash.  Not to UNH; this is a company with revenues that will likely hit close to $150 billion this year.  For you work comp folks, that is about 180% of total US WC premiums. 

(full disclosure – I owned a tiny bit of equity in HCS from a prior role on the Advisory Board of predecessor Cypress Care)

The good folks at Washington Labor & Industry (and other state agencies) are asking for public comment on their revised Prescribing Guidelines for Opioids. The pdf briefly summarizes changes from current guidelines, and is well worth your perusal.  Kudos to the Agency Medical Directors’ Group; they continue to lead the way for the rest of the country.

There’s a rather troubling piece in the latest Health Affairs about the cost and implications of over-diagnosis and over-treatment of breast cancer.  As one who is somewhat troubled by the proliferation of pink everything everywhere (cue the calls for my summary execution as insensitive and uncaring), I see this as evidence of a movement in danger of running amok.  From the article:

The average expenditures for each false-positive mammogram, invasive breast cancer, and ductal carcinoma in situ in the twelve months following diagnosis were $852, $51,837 and $12,369, respectively. This translates to a national cost of $4 billion each year. The costs associated with false-positive mammograms and breast cancer overdiagnoses appear to be much higher than previously documented. Screening has the potential to save lives. However, the economic impact of false-positive mammography results and breast cancer overdiagnoses must be considered in the debate about the appropriate populations for screening. [emphasis added]

Is breast cancer a major problem? Yes. As a major killer of women, and a disfigurer that does deep psychological damage, breast cancer is one of the major public health issues nationally.  That said, telling women who DON’T have breast cancer they do, and treating them for it, is awful indeed.

Finally, Darrell Bruga of LifeTEAM asked me if there is any technology platform already being utilized in workers’ compensation that is designed with the end user being the INJURED WORKER? Does anything like that exist where the claims examiner, caae manager, etc interacts with the injured worker digitally to communicate, provide information, provide health information, etc.

I don’t know of any such app; if you do please let me know – email at jpadudaAThealthstrategyassocDOTcom or just comment below.

Apr
23

The Everything-PPACA edition of Health Wonk Review

Posted by Joe Paduda on Thursday, April 23rd, 2015 | Comments

The ongoing rollout of the Affordable Care Act is the primary subject of this edition of Health Wonk Review – but there’s much more from the best of the health policy blogosphere – all summarized here for your reading pleasure!

PPACA rollout

Brad Flansbaum has written a thoughtful and compelling perspective on the impact of reimbursement changes on physician compensation, posing tough questions and seeming to come down on the side of longer/harder/tougher/knottier vs slam-dunk.

The coverage gap (wherein folks  have to pay a penalty if they go without insurance coverage) is covered by Louise Norris at Colorado Health Insurance Insider – in fact she’s more on the ball than any of the other sources folks normally turn to.  One key – if “your gap in coverage includes three or more months, you’ll be assessed a penalty for the entire period without health insurance; ” so being covered sometime during the fourth month doesn’t meet the test.

BTW, the IRS will assess a penalty for those going without coverage – and Louise has the skinny on those details too.

Bob Laszewski highlights the low consumer ratings of Covered California and the massive dollars poured into the site by the Feds.  Bob notes coverage expansion has been far below estimates, while costs have been far above.  Ouch.

Friend and colleague Hank Stern continues his merciless coverage of PPACA rollout with InsureBlog’s entry this biweek – a quick summary of notable news about the “ObamaTax”.  Double Ouch…

Another coverage gap is addressed by Anthony Wright of Health Access California.  Anthony reports on efforts by CA legislators to expand coverage to include undocumented workers in the Golden State.  Pending changes in immigration may well increase the number of people eligible for coverage under PPACA.

Some want to kill PPACA; others, more politically savvy, want to replace it. Writing in Health Affairs’ blog, Tim Jost discusses the various ideas/thoughts/concepts circulating among GOP Senators and Congresspeople, concluding that it isn’t really possible – given the GOP’s antipathy for the core goals of PPACA – to “replace” it.  And, most of the ideas floated to date won’t do much to increase coverage or reduce cost.

From MCM I submit a brief post detailing the cost trends for private health insurance, Medicare, and Medicaid.  Notably, the “Ms” have lower trend rates than private insurers.

SGR is dead!

Pigs will fly.  Lions and lambs will lie together.  The Cubs will win the World Series (well, that may be a stretch).  Those are events as equally unlikely as Congress agreeing on a bipartisan fix to Medicare physician reimbursement. Writing in medicareresources.org, the estimable Louise Norris contributes another worthy piece dissecting the implications of the replacement of the much-reviled SGR with small, but predictable increases in physician pay.  Of note, there are also incentives to improve quality, extension of some niche health plans, and continued emphasis on increasing transparency.  All good things, which just shows things can get done on Capitol Hill...

Our favorite health care economist, Jason Shafrin, contributes a quick take on the passage of a Medicare reimbursement “doc fix” – a fix that, while it adds $141 billion in additional cost over the next ten years, also simplifies other programs intended to reward top-performing docs.

Stuff you need to know

Julie Ferguson has a sobering piece on workplace suicides, noting law enforcement, farming, and auto repair are the industries most affected. Julie teases out the common factors, provides additional insight into specific industry risks, and focuses on the need for mental health support for family farmers.  A great piece.

Returning from the annual HIMSS conference, contributor John Lynn shares his thoughts on what’s going to happen to Health IT in the near future; with implications for new entrants, entrenched old-line vendors, and the mid-tier outfits alike.

This biweek’s “hey, I didn’t know that! that’s pretty cool” moment comes from Jaan Sidorov MD, who reports that:

persons of low socioeconomic status are more likely to have smart phones vs. the “banked” population. They may not have a checking account, but, compared to other segments of the population, they are more able to use these devices to access and manage their “e”care. [emphasis added]

HWR veteran Roy Poses MD has a tough piece on hospital CIO’s perspectives that they, the CIO, “own” patient engagement.  Roy’s take is this is part of the problem with health care; generic managers who don’t actually deliver care think they “own” it.  Well worth a read.

Finally, One Happy Nurse reveals why a 7 hour wait in the ER isn’t so bad…and she should know – she’s been working in an inner-city Level II trauma center ER for more than two years.

Whew…after almost ten years of HWR, it’s great to see the best keep getting better!

Apr
20

Which better controls spending – Private insurance or Medicare/Medicaid?

Posted by Joe Paduda on Monday, April 20th, 2015 | Comments

Before you read further, cast your vote…

Okay, a couple initial thoughts.

First, when comparing health care systems’ ability to control cost over multiple years, the best metric is the cost trend per member; this accounts for differences in demographics and membership growth.

Second, this only accounts for cost growth; not outcomes, patient or provider satisfaction, or efficiency.

That said, cost growth is the best metric to use when thinking about long term cost control, governmental budgets debt and deficits, and tax implications.

Drew Altman at the Kaiser Family Foundation has a simple graphic here that tracks cost growth over time.  The net – from 2007 to 2013, private insurance costs increased 29%, more than twice Medicare’s growth and five times higher than Medicaid.

(side note – the most recent data indicates Medicare has higher member satisfaction than private insurers…)

What does this mean for you?

If your goal is cost control, the answer is obvious.  However, personal and policy decisions are never simple.

Feb
10

The anti-vaccination idiocy

Posted by Joe Paduda on Tuesday, February 10th, 2015 | Comments

Penn and Teller profanely destroy the anti-vaccination case in a 90 second video well worth watching.

Unfortunately, many of the so-called anti-vaxxers won’t watch it, or understand it, or believe it.  No, they are willing to put their own kids – and everyone’s kids – at risk because of a completely wrong, now-retracted article in the Lancet purported to show a link between vaccinations and autism.

When, of course, there is NO SUCH LINK. As this group of parents with kids afflicted with autism eloquently shows…

And there’s any number of lunatics claiming vaccinations cause all type of horribles, e.g. whack-job, cartoon character Michelle Bachman’s assertion that the HPV vaccination can cause mental retardation…

From the other side of the political spectrum, there are anti-vaxxer liberals who don’t get refuse to understand/outright deny the science – nice to know we all have morons in our midst…

Fortunately, people in third world countries are a lot smarter than these cretins –

“We take vaccines so for granted in the United States,” Melinda Gates told HuffPost Live in January…

“They will walk 10 kilometers in the heat with their child and line up to get a vaccine because they have seen death. We’ve forgotten what measles deaths look like. We’ve forgotten … the scourges they used to be. But in Africa, the women know death in their children and they want their children to survive.”

The anti-vaxxers claim it is their right to jeopardize their kids – and yours. Fine.  While one could make a compelling case that their stupidity is grounds for a charge of child abuse, there’s a much bigger public health issue here, one that is all too obvious now that these idiots have allowed their kids into public spaces where they’ve infected others.

That case is simply this – if you choose to do, or not do, something that creates a significant public health risk, then you get to pay for the consequences.

Monetarily, criminally, civilly.

DWI, knowingly infecting partners with STDs, failing to keep firearms locked up, texting and driving, all are akin to the anti-vaccine movement.  And all come with legal consequences.

What does this mean for you?

Be careful, stupidity didn’t die out with the Middle Ages.