Jul
29

The power of mis-information – a cautionary tale for health plans

Today’s Kaiser Health Tracking Poll contains interesting data about support for health reform (steady positives, declining negatives), what’s much more telling is the extent of seniors’ a) ignorance of basic facts about health reform and b) widespread belief that reform includes death panels and cuts Medicare benefits.
Yikes.
According to Kaiser, “Half of seniors (50%) say the law will cut benefits that were previously provided to all people on Medicare, and more than a third (36%) incorrectly believe the law will “allow a government panel to make decisions about end-of-life care for people on Medicare.”
These are both factually incorrect.
Moreover, “Despite the fact that Medicare’s actuaries predict the health reform law will extend the life of the Medicare Part A Trust Fund by 12 years (from 2017 to 2029), only 14 percent of seniors know this and nearly half (45%) of seniors think the health reform law will weaken the financial condition of the fund.
”
There are several ways to look at this.
The power of the anti-reform noise machine is truly impressive; death panel myth promoters are clearly effective in getting people to believe their claims, despite widespread debunking of the claim by multiple independent organizations. (One well-respected organization, Politifact.com (run by the St Pete Times, a terrific newspaper, called it “pants on fire false).
Then again, it’s hard to underestimate the ignorance of the American public; we’re talking about a country where 43% of the population doesn’t believe in human evolution…
Seniors tend to vote in higher percentages than the rest of the population, so their concerns about reform, based at least in part on ignorance of the actual reform bill and its provisions, may well have a disproportionate impact on the election this fall.
Closer to home, health plans and insurers have to take note of these poll numbers and consider the impact on their own members.
As health plans increasingly emphasize provider network selection based on quality and outcomes data; rigorously employ evidence-based medical guidelines; and get tougher on experimental and unproven medical procedures and therapies, they are going to be exposed to the same type of fear-mongering from idiots using the public’s ignorance and fear to gain notoriety.
What does this mean for you?
Health plans must – and I mean must – develop and implement programs to stay on top of the public’s perception and opinions about them. Call it opinion monitoring, social network monitoring, complaint management, whatever, but do it. But this will only work if you proactively educate members and the markets about what you’re doing and why. Otherwise it’s purely defensive, will appear so, and will be little help when the stuff hits the fan.
Which it always does.


Jul
27

Is Don Berwick going to be Sherrod-ed?

The recess appointment of Dr Donald Berwick as head of CMS has incited a furor among politicians outraged at what they claim are his advocacy for rationing and fondness for Britain’s National Health Service.
To support their claims, these politicians are using Berwick’s own words, in a way eerily reminiscent of the recent Shirley Sherrod debacle.
It started with Glenn Beck, master of the one-word quote, and then slipped over into more mainstream politicians.
What’s really troubling about all this, in addition to the blatant political motivation, is Berwick is pretty closely aligned with core conservative values.
Don Berwick is now, and has always been, a patient-centric, consumer-oriented ‘radical’ who’s concept for the ideal system is one that is almost entirely patient-focused. Here’s Berwick’s ideal health plan from a piece by Ezra Klein:
“(1) Hospitals would have no restrictions on visiting — no restrictions of place or time or person, except restrictions chosen by and under the control of each individual patient.
(2) Patients would determine what food they eat and what clothes they wear in hospitals (to the extent that health status allows).
(3) Patients and family members would participate in rounds.
(4) Patients and families would participate in the design of health care processes and services.
(5) Medical records would belong to patients. Clinicians, rather than patients, would need to have permission to gain access to them.
(6) Shared decision-making technologies would be used universally.
(7) Operating room schedules would conform to ideal queuing theory designs aimed at minimizing waiting time, rather than to the convenience of clinicians.
(8) Patients physically capable of self-care would, in all situations, have the option to do it.
“I suggest that we should without equivocation make patient-centeredness a primary quality dimension all its own, even when it does not contribute to the technical safety and effectiveness of care,” he says.”

Pretty radical, indeed – returning power to the patient, from the practitioner.

If Berwick’s opponents just took a minute to read what the guy really stands for, they’d discover he’s pretty much aligned with many ‘conservative’ principles – self responsibility, ownership, consumer-centered policies and practices.
Unfortunately, they just don’t care about who Berwick really is – they’ve decided he’s the stick they’re going to use to beat this Administration, regardless of whether he’s good, bad, or indifferent.
As Maggie Mahar noted in HealthBeat, “Thomas Scully, who led the CMS under President George W. Bush [said of Berwick] : “He’s universally regarded and a thoughtful guy who is not partisan. I think it’s more about … the health care bill. You could nominate Gandhi to be head of CMS and that would be controversial right now.”
Here’s hoping the recent Shirley Sherrod disaster has stiffened the backbone of the Administration and caused the wingnut media to think a little more deeply before throwing bombs.
And yes, I believe in the Easter Bunny too.


Jul
23

Changes to physician reimbursement under reform – the details

Several clients have asked for more detail on how the reform bill will change Medicare reimbursement for physicians and other non-facility providers. Here’s the synopsis.
First, note that this pertains only to reimbursement changes contained within the reform bill. There are a host of other initiatives, ideas, pending changes, and reimbursement ‘tweaks’ outside the bill that will also impact reimbursement.
Reimbursement for primary care services – provided by some internists, family practice docs, pediatricians, PAs, and nurse practitioners – will increase 10% between 2011 and 2015. After 2015, the increase – which is described as a ‘bonus’ – will theoretically expire.
The key word here is ‘some’.
To get the increased compensation, 60% of the provider’s charges for services over the last (to be determined) months/years must have been for primary care.
There’s also more funds for some general surgeons – a 10% bonus if they provide ‘major surgical procedures in health professional shortage areas“.
That’s it for the easily described changes. Now here’s the more complex.
1. Bundled payments – there’s a national pilot program authorized under reform that would allow for bundling of payments for an entire episode of care, as opposed to the current fee for service (FFS) methodology. Under this scenario, a group of physicians, ancillary care providers, and facilities would get paid a flat amount for a specific condition/diagnosis.
2. Post 2014 and the Independent Payment Advisory Board – Starting in 2014, the IPAB would be required to recommend specific Medicare spending reductions in any year in which Medicare’s per capita cost growth rate exceeded a specific target. IPAB’s recommendations are more than just idle talk; they would become law unless Congress passed an alternative proposal that resulted in identical savings. Some provider types are excluded for a limited time (this is too deep in the weeds to go into here).
There’s more in the bill, but it is for very specific services, types of providers, and geographic areas yet to be identified – in all, few providers will be affected.
For more detail on the bill’s impact on reimbursement, click here.[opens pdf]
What does this mean for you?

Remember this is just the reform bill – it is highly likely other changes driven by other bills, regulatory changes, and miscellaneous factors will have as much – if not more – impact.


Jul
19

Controlling health care costs: Who’s responsible?

I don’t understand why those who believe health reform is socialism don’t have faith in the free market’s ability to control costs and deliver quality.
Here’s why I’m confused.
Several large health insurers have decided its time to get serious about managing costs; they’re introducing plans with limited provider networks and either no coverage for out of network providers or high deductibles and co-insurance/copays.
The plans, introduced by United Healthcare, Aetna, Wellpoint and others, are currently only available in a few markets as the healthplans test market receptivity.
Kudos to these insurers for finally getting serious about managing cost. While they are concerned about the potential for a repeat of the consumer backlash seen in the nineties, I’m betting the consumer backlash will be minimal.
The political backlash is a whole different story; more on that in a minute.
Most employees are all too aware of the rising cost of benefits; they have seen their premium contributions increase dramatically as the benefits plan has slimmed down. While some aren’t going to be happy if they have to pay more to see their favorite doc or go to the nearest hospital, their anger will be tempered by the knowledge that they are better off than many of their neighbors who have no insurance at all.
That wasn’t the case in the early nineties. Since 1993, the number of people without insurance has increased almost 20% to 52 million from 43.9 million.
Just as the benefits landscape has changed, so has the political. We’re already starting to hear some politicians complain that employers’ changes are evidence that ‘ObamaCare’ isn’t working as advertised, that the President’s promise that reform would allow you to keep your current plan wasn’t true.
These critics probably know their argument is specious at best. The reform legislation was specifically designed to allow employers to maintain control over their plans, the thinking being the free market will develop solutions to the cost and coverage problem.
And that’s precisely what is beginning to happen, albeit slowly and in baby steps. Health plans have realized that risk selection isn’t the path to success, quality and cost of care and more effective member health management is.
There’s a bit of hypocrisy, or perhaps more kindly, ignorance among those who criticized ‘Obamacare’ for its ‘socialist’ leanings and now fault reform for benefit plan changes implemented by employers seeking market answers to rising costs.
The cost control steps included in the reform legislation are weak, scarce, and small; stronger cost controls were discarded in order to get the bill past lobbyists and their friends in the Senate (and to a lesser extent, the House). As a result, we’re left with a bill that – de facto – relies on private insurers and employers to develop tools and methods to control cost.
Critics can’t have it both ways. Either decry the bill for its weak cost controls and governmental ‘takeover’ of health care, or slam it for forcing employers to change plans to control costs because the bill doesn’t do enough.
Trying to both results in one argument refuting the other.


Jul
7

Demagogues, Deficits and Healthcare

I’ve just about had it with the GOP’s demagoguing about deficits.
The party of fiscal responsibility, of low taxes and small government, of controlled spending and personal responsibility – that party – seems to have rediscovered its roots of late, with strident calls for fiscal restraint, an end to wasteful government spending and strict adherence to pay-as-you-go guidelines.
This from the party that added over $9 trillion to the deficit the last time they passed a health care bill.
Let’s return, for just a moment, to the early and mid oughts, the halcyon days of the Bush Administration, when the entire government was under the firm control of the fiscally prudent.
Here’s what those wise stewards of the nation’s wealth did.
Point One
Pass Medicare Part D with no funding – short term, long term, any term. Hell, they would’ve been more fiscally prudent if they’d included a few hundred million to bet on the horses. At least that would have shown some desire to pay for the thing. But no, the GOP decided to NOT set aside funds, or raise taxes, or cut other programs; they just passed Part D, committed to paying for it out of ‘general funds’ and to hell with the future.
The latest Medicare Actuary report indicates the GOP-passed Part D program has contributed $9.4 trillion to the $38 trillion Federal healthcare deficit. (page 126)
The Bush-era GOP makes President Obama, Pelosi, Reid, and the rest of those spendthrift Dems look like a bunch of cheapskates; even a GOP analysis finds “the new reform law will raise the deficit by more than $500 billion during the first ten years and by nearly $1.5 trillion in the following decade.”
Point Two
Prevent CMS from basing reimbursement on effectiveness. As I said a couple months ago, “‘the Republican Congress and Administration was responsible for preventing Medicare from considering any cost-benefit criteria in determining whether and what Medicare would pay for procedures, drugs, treatments, devices, etc. Yep, these deficit hawks thought it was just fine for we taxpayers to be forced to pay for procedures with very little efficacy. (Medicare Modernization Act)
Hmmm, wise stewards indeed…
How’d the GOP get away with this? Simple. The Republicans suspended Congress’ PAYGO rules, the requirement that any bill that spent more money had to be offset by more revenue or cuts elsewhere.
By the way, those PAYGO rules? The Dems reinstated them.
From all the caterwauling from the GOP side of the aisle, you’d think that Mitch McConnell, John Boehner, Newt Gingrich et al were well practiced in the art of controlling spending, of not spending what you don’t have.
And you’d be wrong.
According to the Wall Street Journal, speaking about a recent effort to extend unemployment benefits, McConnell said “The principle Democrats are defending is that they will not pass a bill unless it adds to the deficit,” McConnell voted for both Part D and MMA.
Speaking about the health reform bill a couple months ago, Rep. Paul Ryan of Wisconsin, “the top Republican on the Budget Committee, said “Hiding spending does not reduce spending. We all know this bill is a budget Frankenstein. It is a house of cards. It is going to give us a huge deficits now and even larger deficits in the future.” Ryan voted for Part D and MMA.
Here’s party leader Newt Gingrich: “Republicans, I think, are going to draw a very firm line against any kind of tax increase that would kill jobs, and that’s very hard for liberal Democrats to live with because all of their plans require bigger spending, higher deficits and more taxes, and it’s a fundamental disagreement about the nature of the world.”
I could go on, but you get the point.
What does this man for you?
I’ve had, and voiced, deep concerns about the health reform bill and its associated costs. What makes me, and should make you, really angry is the demagoguing by elected officials who’ve done exponentially more to damage our fiscal future than even the most pessimistic assessment of the health reform bill.


Jun
25

Medicare physician reimbursement increase passes

Yesterday the House passed legislation increasing Medicare physician reimbursement till November 30, when it is slated to drop by 23%. Then, barely a month later, physicians will see another cut which will cut their pay by another seven points.
The temporary fix will increase payments by just over two percent.
For six months.
Then the whole debacle/fiasco/mess will resurrect it’s ugly head and we’ll be right back where we are today, except the cost of an ultimate fix will then be close to $300 billion.
But that will happen after the fall elections, and well before the 2012 voting season starts.
On the workers comp side, several states will see their doc fee schedules change in step with Federal reimbursement, while the impact on most jurisdictions’ fee schedules will play out over time as regulators and legislators work thru the politically-charged process, alter conversion factors and assess their potential impact on access and cost.
The indirect impact is likely to be much more significant as physicians and other providers billing CPT codes seeking to maximize reimbursement from private payers to offset (inflation adjusted) losses in revenue from the Feds.
For those interested in more detail, click here.


Jun
24

We’ve got a long way to go, baby… ranking the US health care system

Why do we need health reform? Don’t we have the best health care system in the world?
No. Not even close.
According to a study released yesterday by the Commonwealth Fund, “Compared with six other nations–Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom–the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives.” [emphasis added].
The report goes on to note “Newly enacted health reform legislation in the U.S. will start to address these problems by extending coverage to those without and helping to close gaps in coverage–leading to improved disease management, care coordination, and better outcomes over time.”
While there’s no question there are some very, very good hospitals, physicians, and other providers in the US, this isn’t about individual providers – it measures the entire ‘system’.
The report was based on surveys of patients and primary care providers and data on outcomes from previous Commonwealth Fund research.
While the report notes a major failing of our system is a failure to provide coverage for all Americans, even when access issues are not considered, we still rank below the other countries on most measures. This is particularly valid when considering cost, the only area where we rank far above the other six countries.
Slide1.jpg
The top-ranked country overall is the Netherlands, followed by the oft-decried Brits. But the most troubling finding is not a shortcoming on one of the various measures of quality or cost; the US ranks lowest in living long, healthy, productive lives.
“The U.S. ranks last overall with poor scores on all three indicators of long, healthy, and productive lives. The U.S. and U.K. had much higher death rates in 2003 from conditions amenable to medical care than some of the other countries, e.g., rates 25 percent to 50 percent higher than Canada and Australia. ”
What does this mean for you?
The newly-enacted reform bill will help improve access, quality, technology usage, and other metrics.
But we’re still going to be – far and away – the most cost-inefficient system in the world.


Jun
3

Government-run health care – how bad is it?

There’s been a minor flurry of articles about the Veteran’s Administration health care system recently, a flurry that is both welcome and a bit tardy. It would have been helpful indeed if these had come out during the furor over health reform. Better late than never.
Let’s tackle cost first. The CBO’s most recent report indicates the VA does a much better job controlling cost than the private sector delivery system (used by Medicare). According to the CBO,
“Adjusting for the changing mix of patients (using data on reliance and relative costs by priority group), the Congressional Budget Office (CBO) estimates that VHA’s budget authority per enrollee grew by 1.7 percent in real terms from 1999 to 2005 (0.3 percent annually) [emphasis added] .2 Though not the decline in cost per capita that is suggested by the unadjusted figures, that estimate still indicates some degree of cost control when compared with Medicare’s real rate of growth of 29.4 percent in cost per capita over that same period (4.4 percent per year).”
In contrast, the private insurance sector [pdf] saw premiums increase over 70% over the same period (I know this isn’t exactly apples-to-apples, but no matter how you slice the apple, 70% is still a lot more than 1.7%)
How about patient satisfaction? Again, the VA scores better than the private sector.
“In 2005, VA achieved a satisfaction score of 83 (out of 100) on the ACSI for inpatient care and 80 (out of 100) for outpatient care, compared with averages for private-sector providers of 73 for inpatient care and 75 for outpatient care…For VA, the scores for inpatient and outpatient care were 84 and 83, respectively, while the average scores for the private sector were 79 and 81.”
In the press, Maggie Mahar posted on Phillip Longman’s new edition of Best Care Anywhere; Why VA Healthcare is Better than Yours; quoting Longman’s foreword “Health care quality experts hail it [the VA health care system] for its exceptional safety record, its use of evidence-based medicine, its heath promotion and wellness programs, and its unparalleled adoption of electronic medical records and other information technologies. Finally, and most astoundingly, it is the only health care provider in the United States whose cost per patient has been holding steady in recent years, even as its quality performance is making it the benchmark of the entire health care sector.”
Merrill Goozner published an interview with Longman, who noted “In study after study published in peer‐reviewed journals, the VA beats other health care providers on virtually every measure of quality. These include patient safety, adherence to the protocols of evidence medicine, integration of care, cost‐effectiveness, and patient satisfaction. The VA is also on the
leading edge of medical research, due to its close affiliation with the nation’s
leading medical schools, where many VA doctors have faculty positions.”
Longman’s book is a timely update to his 2007 edition, providing new insights into the effectiveness of the VA’s VistA IT infrastructure and coverage of adoption by the private sector of VistA.
Another recent article noted the system is responsible for 24 million veterans (treating about 5.5 million last year), has a budget of “$50 billion and operates more than 1,400 care sites, including 950 outpatient clinics, 153 hospitals and 134 nursing homes.”
The piece quoted Elizabeth McGlynn, associate director of Rand Health and author of a study of the VA: “You’re much better off in the VA than in a lot of the rest of the U.S. health-care system,” she said. “You’ve got a fighting chance there’s going to be some organized, thoughtful, evidence-based response to dealing effectively with the health problem that somebody brings to them.”
Which brings up this question –
Where would you like to get your health care, and which inflation rate would you prefer?


May
13

Bias and credibility – a cautionary tale

I’ve been somewhat reluctant to write this post, as it takes issue with one of the key presenters at a workers comp conference that I believe is consistently the best I’ve attended. It’s here for one reason: it illustrates how a public podium must be treated with respect and the audience given all the relevant information so each can draw their own conclusion.
Scott Harrington PhD, was on the podium at NCCI last Thursday afternoon discussing the future of Federal healthcare reform, reform legislation, and the implementation of reform. He’s a very knowledgeable and highly intelligent guy, but his presentation was marred by what I consider rather striking bias.
Harrington led off by noting that he is a rare professor in that he is an avowed conservative. No problem with that; many in the insurance community tend to be more on the conservative side, but there’s no shortage of liberal-leaning insurance execs either (although they tend to be relatively quiet about their inclinations).
No, the issue was he allowed his bias to affect what was an important topic, and one of interest to most of the attendees – of health reform and the goings-on in Washington. At the end of Harrington’s talk, I was left wondering what was reality, what was his slanted interpretation of reality, and whether anything he said could be taken at face value.
Here’s what caused my consternation.
The uninsured population
Harrington contended that of the 46 million uninsured, 10 million are eligible for coverage thru their employers but have not signed up, and an additional 11-12 million have incomes above 300 percent of the Federal poverty level, and therefore could buy insurance if they wanted to. Harrington’s point was people are uninsured because they choose to be.
That’s just not true. 300% of the federal poverty level is $66,150 for a family. The average health insurance premium is over $15,000, not including deductibles, copays, coinsurance, and the cost of healthcare for conditions not covered by insurance. Health insurance is unaffordable for many people. Is that a ‘choice’ issue? Perhaps – many ‘choose’ to pay rent and buy food instead of insurance.
Moreover, individuals with pre-existing conditions can’t get any coverage for those conditions in many states and have to pay a big upcharge in others. If you have diabetes and hypertension, what insurance company who doesn’t have to cover you will?
The employer-sponsored issue is less clear, but still problematic. Many smaller employers offer insurance but require workers to pay a big chunk of the premiums; this is especially prevalent among smaller employers. Workers in the lower income brackets would have to pay their part of the premium – typically between 20% and 50% of the total cost, plus the additional deductibles, copays, and coinsurance. For a worker making $20 an hour with a family of three, that’s a little over $40k per year. If their employer requires them to pay a third, that’s $5000 before the deductible, which in many cases is at least a couple thousand bucks.
The Medicaid picture is cloudier still, but Harrington’s inference that many who are eligible haven’t sign up is quite simplistic. Research indicates many of the eligible-but-unenrolled are those with language barriers, live in states that have done little to promote the program or educate potential enrollees, and/or have significant mental issues that inhibit efforts to enroll them or are kids.
Harrington’s attempt to pooh-pooh the uninsurance problem would have been more compelling had he treated it objectively. There is no question some individuals go without health insurance out of choice – Rush Limbaugh comes to mind. But Rush makes just a bit more than $66k a year.
Deficits
Harrington next took on the Medicare deficit, pointing out (accurately) it would rise to $38 trillion by 2008. He then shared a bunch of scary statistics about the size of the debt, amount per person; all in an attempt to point out the unaffordability of the current system.
That wasn’t exactly new news. Where Harrington went off the reservation is his inference that this was somehow the fault of the Democratic Congress and President. In his concluding remarks, Harrington claimed that if the GOP takes over Congress and the White House, the mandate and insurance provisions could be repealed, reductions in Medicare would be legislated, and this would lead to lower costs and deficits.
I’m not sure which Republican party Harrington was talking about; it certainly wasn’t the one we’ve seen in power for most of the last decade.
For example.
Medicare Part D was passed and signed by Republicans, with “no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit”. The same Medicare Actuary quoted by Harrington, in the 2009 report to Congress, (pdf) reported that the GOP-passed Part D program has contributed $9.4 trillion to the $38 trillion Federal healthcare deficit. (page 126)
I’d also point out that the same Republican Congress and Administration was responsible for preventing Medicare from considering any cost-benefit criteria in determining whether and what Medicare would pay for procedures, drugs, treatments, devices, etc. Yep, these deficit hawks thought it was just fine for we taxpayers to be forced to pay for procedures with very little efficacy.
(the pertinent language from the 2003 Medicare Modernization Act reads as follows – CMS will pay for items or services “reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member” (Fed Reg 65-95, p 31124- 31129, 2003 MMA); there is no mention of cost)
Finally, I think it is important to reflect on a simple fact. If private industry had been able to control health care costs, we wouldn’t be having this discussion. The fact is, for whatever reason, the for-profit, and not-for-profit health care insurance and delivery system has been unable to control costs and consistently deliver quality care.
There’s no question the current health reform bill has major flaws; a lack of cost control is perhaps the most glaring. I’ve taken issue with the law, its future cost, the lack of attention to cost, and the failure of both parties to deal with these tough issues. I will continue to do so, and will continue to keep in mind the singular importance of presenting the facts, data, and logic supporting my views, and address opposing opinions that are similarly supported.
And I’m sure you’ll keep me honest.


May
4

For the Chinese treasure fleets, voyages went progressively further from their home ports, until, some believe, they circumnavigated the globe. Before we explore the ‘other side’ of the work comp world, we need to consider what lies just out of sight over the horizon.
Once we think about sailing past what we can see from land, we are forced to guess what lies ahead. Fortunately we can look back and recall what others experienced on similar voyages. Unfortunately, unlike the Chinese of 1421, no one has ever sailed on these particular ‘seas’, thus we’ll have to make a rather scary climb up the ratlines leading to the top of the highest mast, over and into the crow’s nest.
050804.zheng-he-boat.jpg
So what can we see from our ‘crow’s nest’?
Today we’ll confine our discussion to health system bargaining power; about 30% of comp medical dollars go to facilities.
Among health systems and large multi-specialty groups, provider bargaining power is already growing, and is impacting the largest of the group health plans. The increasing leverage enjoyed by large provider groups and health systems is going to be felt from New England to southern California, as systems and provider groups use their dominant market positions to force non-governmental payers to increase reimbursement.
By watching what is happening to group health plans, those in the work comp space are seeing their future. I’ve already discussed the ability of providers such as Sutter Health in northern California to demand – and get – double-digit increases in reimbursement from Wellpoint and other huge healthplans with seemingly-immense buying power. Recall that facility charges account for about a third of work comp medical expense; if work comp payers in California see similar increases, we’re looking at an increase of three points in the loss ratio…

I understand that many states have fee schedules, California included. I also understand that many work comp PPOs, including those operating in the Golden State, have deals that give their clients lower-than-fee-schedule rates at participating hospitals. At some point Sutter et al are going to start asking why they are giving work comp payers this great deal.
I would expect that shortly after that question is posed, discounts will disappear, or at best, become far less attractive.

One could argue that hospitals, health systems, and large provider groups will be loathe to give up what amounts to a very profitable payer line. That’s true so far as it goes, however:
– many providers are highly skeptical of payers’ ability and actual effort to direct injured workers to their facilities;
– providers are facing what could well be a significant influx of new patients as previously-uninsured gain coverage and seek the care they’ve not been able to access until now, making the few additional work comp patients less significant; and
providers in many areas are already able to force work comp networks to pay at or very close to fee schedule, as those networks know they ‘have to have’ that system or payers will not consider their network. BayCare in the Tampa Bay area is just one system that leveraged their position several years ago, Sutter Health in NoCal and Partners in Boston have similar approaches.
What does this mean for you?
Fortunately, since work comp is a required coverage (except in Texas), payers can just pass the additional cost on to their policyholders.
Unfortunately for payers who choose that ‘strategy’, some of their competitors will figure out solutions that give them a ‘sustainable competitive advantage’.