Insight, analysis & opinion from Joe Paduda
From covering our generally-mediocre-but-hugely-expensive healthcare “system” to the use of blockchain in clinical trials to why adding $ to fund healthcare subsidies would drive UP premiums, it’s all here in Andrew Sprung’s edition.
If you want to stay up to date on the healthcare stuff that will affect your business – HealthWonk Review is the best way to do just that.
Work comp drug costs are down 22% over the last five years. Opioid spend dropped 16.7% last year.
That’s the key takeaway from CompPharma’s annual survey of Prescription Drug Management in Workers’ Comp.
These are truly remarkable results; payers and PBMs (mostly PBMs) have slashed over a billion dollars from pharmacy spend, cutting costs for employers and taxpayers.
There is much left to do; far too many patients still get far too many drugs. Opioid addiction is a crisis in workers’ comp, as is abuse misuse and diversion. There are still no comprehensive, completely (or even mostly) effective tools/medications/programs to help patients get off and stay off opioids.
But let’s focus on the positive. Last year, overall opioid spend in the US declined by 1 percent – while work comp cut opioid spend by almost 17 percent.
While the reduction is beyond substantial, it’s important to understand that a big chunk of this was driven by payers settling older claims, claims that have a disproportionately high drug spend. These settlements don’t “count” towards drug spend, while they do eliminate on-going dispensing and the attendant costs.
What does this mean for you?
Well done.
Things must be getting tense in Stamford CT, headquarters of Purdue Pharma. Reports indicate Purdue is working on a deal to resolve all state claims related to opioids.
Remember – Oxycontin revenues to date are $31 billion and counting.
Reports indicate Purdue’s owners, the Sackler family, have a net worth of around $14 billion.
Here’s what we’ve read so far about the legal situation:
A couple of factoids to remind us of the cause and effect of Purdue’s strategy.
So, what does this mean?
For workers’ comp payers, it is time to get together and develop a legal strategy and approach to suing opioid marketers. The human and financial damage caused by Purdue, Endo and their ilk is incalculable and continuing to grow. Without a successful legal action, employers and taxpayers will be footing the bills for decades to come.
There’s a deeper and even more troubling aspect to this. One could argue – and with a lot of supporting data – that pharma companies figured out a way to legally addict people and get their insurance companies to pay for their drugs.
There is no more damning indictment of the profit motive in the US healthcare system.
What does this mean for you?
Time to get moving.
Back from a much-needed family trip to Sedona AZ where the mountain biking was phenomenal.
(son Cal and son-in-law Keith plus the old guy)
Here’s what happened while I was in the land of the vortices…
WCRI’s annual conference in March 2018 will be kicked off by the former head of the Bureau of Labor Statistics, Dr Erica Groshen. Always a must-do; sign up soon or risk being wait-listed for the March 22/23 event in Boston.
The latest from the brainiacs from Boston is a report on California’s work comp medical benchmarks.
Colleague and good friend Frank Pennachio of Oceanus Partners will be opining on misaligned incentives in work comp at NWCDC in Vegas next month. Frank’s terrific delivery, vast experience and deep knowledge of how things really work in work comp will make this one of the most valuable sessions for employers.
Climate change’s effects are being felt everywhere – and the insurance industry may be the industry most affected. An excellent Harvard Business Review article illustrates the major, if not central role P&C Insurance is playing in forcing us to acknowledge the reality of human-caused climate change.
Differential pricing for high-risk areas (we’re talking about you, south Florida, and you, coastal areas) and Catastrophe bonds are just two of the ways the insurance industry is forcing businesses, governments, and individuals to deal with climate change.
Finally, NCCI’s out with it’s assessment of the 2015 decline in work comp medical costs; key takeaways (note California and New York were not included):
Good to be back at work – enjoy the short holiday week.
Here’s a few things I missed this week – and a big thank you to you, loyal reader.
First, thank you to all the folks who reached out publicly and privately to offer condolences on my political campaign and thank me for running. I deeply appreciate each and every one of you, and cannot thank you enough.
It’s Veteran’s Day (observed) today – thanks to all of you who have served.
Okay, here’s the big news of the week…
The death of “Obamacare” was announced prematurely; ACA signups are breaking records.
Enrollment is well ahead of any previous year, as in more than 50% higher in the first few days of the month. There are likely several factors driving enrollment:
I hate Purdue Pharma
And I don’t use that word lightly.
A very well-researched and written piece in the New Yorker about Purdue Pharma and the family that gave us the opioid crisis is required reading. If you want to know why 60,000 friends, family members, and neighbors died of drug overdoses last year, here is the answer.
China is a major drug supplier
And it’s unbelievably easy to get illicit drugs sent here from China.
Why large employers are buying healthcare directly
Because the outcomes are much more consistent and much better, costs are lower, and there’s a LOT of crappy medical care out there. There’s a movement among smart buyers to STRONGLY encourage their insureds to use specific providers for specific conditions, and that movement is going to explode.
Here’s a key takeaway:
While nearly all of the 450 spine patients who presented to one of the participating centers had been recommended for surgery by providers in their home markets, only 62% of the patients were found to be suitable candidates for surgery by the COE [center of excellence] sites. Instead of unnecessary surgery, activity-based therapies, pain injections, physical therapy, or weight loss were recommended by our providers.
Vacation is next week – I won’t be posting.
Enjoy the weekend!
This biweek’s edition of Health Wonk Review comes to us courtesy of Jason Shafrin PhD…Jason ties each entry to a quote.
Somehow he’s able to channel Mahatma Gandhi, Churchill, and a host of other luminaries to health care. Impressive indeed – head on over for a read!
As many readers know, I have been running for County Legislator here in Onondaga County New York – yesterday was election day, and I lost.
In the immortal words of Yoda, “there is no try, there is only do.”
Despite a lot of support from friends and colleagues, a massive amount of work, a very, very good campaign manager and staff, and a good message, I lost.
The regret I have is not for the hundreds of hours I put in, or the fun forgone when I knocked on doors instead of visiting with family and friends, rowing or riding my bike. The regret is many of you supported our campaign in many ways, and I did not deliver the win. This campaign was never about me, it was about making a difference for the people here, and many of you bought into that and pitched in.
I deeply appreciate your support and encouragement, kind words expertise and advice. I cannot tell you how much that meant and means to me, and I am profoundly grateful.
For now, the Paduda family is headed to Sedona Arizona for a week of family time, mountain biking, hiking, too much good wine and lots of reading the stuff that’s been piling up on the nightstand for the last nine months.
Looking forward to seeing you in Las Vegas – and thanks.
The death rate for drug overdoses climbed 17 percent last year, killing more than 64,000 people in 2016
‘We have roughly two groups of Americans that are getting addicted,” Dr. [Andrew] Kolodny said. “We have an older group that is overdosing on pain medicine, and we have a younger group that is overdosing on black market opioids.”
For those interested in why this is happening, I urge you to read a “biography’ of the Sackler family, owners of Purdue Pharma of Oxycontin fame.
Here is one chilling excerpt:
[Sam Quinones, author of a book on the crisis talking about the] similarities he finds between the tactics of the unassuming, business-minded Mexican heroin peddlers, the so-called Xalisco boys, and the slick corporate sales force of Purdue. When the Xalisco boys arrived in a new town, they identified their market by seeking out the local methadone clinic. Purdue, using I.M.S. data, similarly targeted populations that were susceptible to its product.
My take is this just one of the many similarities between Purdue and the drug cartels – the one chief difference is Purdue et al dosen’t have to worry about law enforcement.
At least not so far.
The budget resolution that Republicans are basing their budget on would cut $1.8 trillion from healthcare, mostly from Medicaid over the next decade.
The impact of this on healthcare would be akin to Harvey hitting Houston.
We will leave aside Republicans’ wildly optimistic economic growth projections and Congress’ elimination of scoring by the CBO – but you shouldn’t. (from former Reagan and Bush economic adviser Bruce Bartlett, discussing GOP growth projections... “[it’s] wishful thinking. So is most Republican rhetoric around tax cutting. In reality, there’s no evidence that a tax cut now would spur growth.”
Instead, the plan would cut Medicaid funding by 30 percent over the next ten years and slash Medicare by another half-trillion dollars.
This is a massive cut, one substantially larger than those proposed in either of the GOP’s failed ACA repeal bills.
There are NO details on how these cuts would be made or which providers and beneficiaries would lose what. This is classic Washington; they don’t want to highlight any specifics because the lobbyists will flood their offices.
Without those details, it is clear that doctors, hospitals, clinics and therapists would all face massive cuts in Medicaid reimbursement, and millions of families and kids would lose coverage.
If something like this becomes law;
What does this mean for you?
IF something like this passes – which I believe is highly doubtful – the US healthcare “system” will be hugely disrupted, with major implications for employment, private insurance costs, and workers’ comp.
The average California MSA includes almost $49,000 for drugs – about half of all future medical expenses.
69% of MSAs included funding for opioids.
But when researchers compared the MSAs to a
“case-matched control group of closed workers’ comp permanent disability claims for similar injuries, the authors found that the WCMSAs called for much stronger opioids, as average cumulative morphine milligram equivalents (MMEs) allocated to WCMSAs with opioids were 45 times the level used in the control group during the life of the claim.” [emphasis added]
Why?
Especially when the report goes on to say:
Federally mandated formulae to financially account for decades of sustained individual opioid use are at direct odds with a growing body of clinical evidence — and a widespread recognition — that opioids are often over-prescribed for the management of chronic, non-cancer pain.
The Feds want/require employers and insurers to pay for another 20 years of opioids, at relatively high doses, for claims that should not be getting opioids.
This is what makes all of us nuts; one hand of the government is pushing us to assertively reduce opioid use, while the other hand demands we pay for opioids for another two decades.
Worse still, many of the MSA patients are also taking hypnotics and/or muscle relaxants.
[chart courtesy CWCI]
A couple thoughts…
The claims with MSAs may well be those that payers can’t resolve, where the patient, their attorney, or their provider just won’t cooperate in efforts to reduce opioid use. Thus, the MSA projections make sense.
Why are these patients being prescribed – and ostensibly consuming – a high volume of opioids for an extended time when clinical guidelines and best practice clearly contradict this practice, and other patients with similar conditions aren’t getting these drugs?
What does this mean for you?
We are making progress, but we have a very long way to go – and CMS isn’t helping.
