HWR veteran – and Blab host David Harlow – is hosting this fortnight’s edition of Health Wonk Review – if you like clean, fresh graphics and some surprise sounds, click on over!
Jun
3
Insight, analysis & opinion from Joe Paduda
Category: General Insurance Issues
Jun
2
The rest of the world is beginning to catch up to the progress workers’ comp has made fighting the opioid scourge. Kudos to PBMs, payers, regulators, researchers and some physicians for recognizing the incredibly negative effects of opioids years ago, and taking action to mitigate some of these effects.
That is NOT to say we’re anywhere close to getting this solved – far from it.
But we have seen some evidence of decreases in the number of new claims getting opioids in some areas and an overall decline in opioid scripts and morphine equivalents (MEDs). We’ll have more information in a couple of months when CompPharma (a consortium of work comp pharmacy benefit managers) releases its 13th Annual Survey of Prescription Drug Management in Workers’ Compensation. (note I’m president of the organization and am conducting the research, past reports are available free for download here.)
A few factoids to give some perspective:
From CWCI’s most recent research:
- Opioids declined to 27.2% of all scripts dispensed to California work comp patients in 2014, down from a peak of 31.8% in 2008.
- Average number of morphine equivalents per script declined from 550 in accident year (AY) 2007 to 422 in 2012.
- The % of work comp patients receiving opioids within 24 months of injury increased from 22.4% in 2005 to 27.9% in AY 2012
- Express Scripts reported overall spend for opioids declined 4.9% in 2015, the fifth consecutive decrease.
- Helios reported:
- the percentage of work comp patients getting opioids declined by 1.6% from 2013 to 2014.
- opioid utilization dropped 2.9% over the same period
What we have NOT seen is any significant progress dealing with the knottiest and most important problem – long term opioid users.
I can’t count the number of erstwhile start-ups, business ventures, and eager entrepreneurs I’ve spoken with who contend they’ve figured it out.
By definition, anyone who claims to have a universal solution most certainly doesn’t understand the problem. Unlike reducing initial and secondary scripts, addressing patients who’ve been taking opioids for months is very much an
- individual,
- patient-by-patient approach
- requiring flexibility,
- a deep understanding of the disease state and chronic pain and addiction,
- a willingness to experiment and fail, and
- a very long term commitment to a business model that almost certainly will not be hugely profitable.
That’s not to say there isn’t opportunity – there most certainly is.
What does this mean for you?
We’re at the end of the beginning of the work to address opioids. This will take focus, years, diligence, and unrelenting focus.
May
31
At long last men are pushing back against the prostate cancer treatment industry’s decades-long scare tactics. A really good NYT story documented a rapidly-growing trend among men to practice “watchful waiting” when diagnosed with some forms of prostate cancer. The money quote: “Five years ago, nearly all opted for surgery or radiation; now, nearly half are choosing no treatment at all.”
HealthNewsReview posted a thoughtful piece about the facts, research, and trends – well worth a read.
I’d note that this has long been known, but docs – especially those in private practice – were loathe to discuss non-aggressive treatment with patients. Couple of points to ponder – is this because remuneration for watchful waiting is paltry compared to aggressive techniques, and/or a fear of litigation?
Key to the trend towards watchful waiting is an understanding that not all cancers are the same. Especially with prostate cancer. This is a relatively common condition among older men, with a very high survival rate regardless of whether the patient got aggressive treatment or not.
And, that “aggressive treatment” may result in impotence and/or incontinence.
Another key to this is understanding that the diagnostic and treatment industry is very big, very lucrative, and very willing to use its money to preserve its profits.
After research assessing the effectiveness and outcomes of patients treated with watchful waiting vs aggressive surgery documented no significant difference, it still took years for docs in private practice to get with the program and start discussing the watchful waiting option with patients.
So, what does this mean?
- Medicine in this country is a for-profit industry.
- That industry is heavily vested in aggressive diagnosis and treatment options.
- It is very powerful and very persuasive, and quite willing to advocate potentially harmful treatments.
- It takes years to get patients and providers to change, especially when confronted by the lobbying efforts of the medical-industrial industry.
- Like anything else, there’s much benefit from the capitalist approach, and much to be worried about.
But we don’t need to be impotent.
May
20
Is it the execs or the IT department?
The workers’ comp, and, for that matter, the entire property and casualty insurance industry, is chronically systems-poor. While other industries view IT as a strategic asset, continually investing billions in IT, WC/P&C considers IT an expense category to be mined for pennies to add to earnings per share.
We all know how much execs HATE unallocated loss adjustment expenses…
Execs at payers are hamstrung by IT departments that can’t/won’t/aren’t able to implement systems changes. In fairness, IT departments are hamstrung by a lack of strategic vision in many C-suites, which in turn is motivated by financial markets or executive comp plans at mutuals. Suffice it to say there is plenty of blame to go around – but the result is insurers’ strategy is often greatly limited by IT.
For example, underwriting and distribution. Yes, Google’s initial foray into insurance was short-lived, but that wasn’t because they weren’t selling insurance. In fact profits were good – but “good” by insurance standards, not by tech standards. Google just couldn’t make the profit levels they are used to.
At some point another tech innovator will figure this out and/or decide a lower profit level is just fine, and then woe betide insurers.
Another example – the medical management world is changing dramatically, and work comp insurers are very hard pressed to adapt. Bundled payments, narrow networks, electronic medical records and vertically integrated delivery systems are here today, and will grow dramatically in importance tomorrow. Flexibility, adaptability, and the ability to move quickly are essential – and equally impossible. Changing vendors requires IT to design, implement, test and monitor new data feeds to multiple systems and stakeholders.
Conversely, some payers have tied themselves to external vendors who act as consolidators or pipes, thereby greatly reducing the carrier’s IT burden. In exchange, a LOT of power is transferred to the pipe vendor. That’s fine if:
- incentives are aligned over the long term, and
- the vendor is able and willing to make changes to providers, processes, and feeds as necessary, and
- there’s transparency.
However, expediency and underinvestment comes at a cost.
CEO T Rex: “Hey, when is that B2B platform scheduled for testing?”
CIO Triceratops: “18 months after I get the money to hire the staff you cut to reduce ULAE…”
The B2B and healthcare delivery market is evolving at a pace akin to that the dinosaurs saw after the meteor hit. So, here’s a couple of questions you may want to ask yourself.
- Does your strategy drive your IT, or does your IT drive your strategy?
- What’s your plan to adapt to the revolutionary changes hitting distribution and medical management?
- Does your IT department, management, vendors, and infrastructure support that plan?
- What happens when – not if, but when – a carrier or new entrant builds the infrastructure and capability you can’t or won’t?
May
19
on a diverse range of topics sure to have you stimulated. Click here…
May
7
Is ready and waiting for you here.
Brad Wright hosts Health Wonk Review, which is chockful of great pics of the two Presidential candidates (most unflattering!) and pithy passages about what this all means for health reform and health care in general.
Brad is Wright on Health indeed!
May
6
ACORD’s Bill Hartnett gave a compelling, entertaining, and pointed presentation on innovation, technology, and the impact of same on insurance (my title, not his).
You will be sorely tempted to ignore this and move on to the next email or project update; Do NOT do this.
His money quote – Insurance is the DNA of Capitalism. Buildings and homes don’t get built or repaired…”
This set the stage for a discussion of the future that fortunately began with a back-to-basics primer on what insurance is for – risk assessment and management. One lightbulb went off for me – does big data give us great predictability, which obviates the “risk” issue inherent in the concept of insurance?
We will be able to predict weather events, identify medical conditions, greatly reduce “accidents”, deliver medical care designed specifically for that individual patient.
A few factoids – every minute, there are:
- 4 million Facebook likes,
- a million Vine users play videos,
- 110,000 Skype calls,
- 700 Uber rides scheduled, and,
- 450,000 tweets
That’s a LOT of data.
And data mining uses this incredibly rich data trove to learn a LOT about you, about health issues, drug issues, crime, you name it. Just by accessing, analyzing, and monitoring publicly available data.
Hartnett talked about vehicular changes dealing with autonomous vehicles – Ford and Tesla will have fully autonomous cars on the road before 2023. Given vehicular accidents are the single biggest cause of occupational fatalities, this is good news indeed – computers are better drivers than humans. Yes, even me.
Moreover, frequency and severity will drop significantly within five years – this is going to greatly impact the auto repair business and auto insurance, but perhaps no industry will be more affected than long-haul trucking.
What will today’s drivers do? How will they be classified for workers’ comp purposes? Will we get a spate of injuries as drivers see tech taking over the wheel?
New news to me – Guardhat is a hard hat with technology specifically designed to avoid falls, notify when falls occur, and monitor other movement and risk metrics. Other technologies include wearables that address posture and monitor vital signs via a tattoo on the skin.
But hard hats may not be necessary, as 3-D printed buildings are coming – a 3-D construction printing rig can build a 2500 square foot house in 20 hours and needs 3-4 technicians to move it around.
I’ll stop with this – cognitive cognition – computers that can do pretty much everything we humans can in terms of pattern recognition, intuitive capabilities, and perhaps have emotions – exponentially faster and more consistently than we ever could.
Can you imagine the impact on health care? Doctors? Diagnostics? Medical information? The health care delivery system will be revolutionized, with the potential to dramatically reduce costs as the role of people may well be greatly reduced.
Of course, I’ll be retired by then…oh, wait, I won’t be.
That’s how fast it’s coming.
Then there’s Distributed Trust…
Apr
27
BY that I do NOT mean sales people are NOT professional – rather the role is not really considered so by many. Just think of the titles sales people go by: Marketing representative. Account executive. Business development manager.
Ever notice how people who are supposed to be selling stuff aren’t labeled as sales people? Yet “nothing happens until a sale is made” and no company exists without customers.
There are far more “chief marketing officers” than “chief sales officers”, and – with some notable exceptions – the prestige is in the marketing title.
It isn’t just the titles on business cards, although that’s a symptom of the larger problem. It’s the lack of training provided by many companies, the failure to adequately vet and hire due to a lack of understanding of what works and what doesn’t in “sales”. You can see the impact of this in the relatively high turnover among sales departments.
All of the really good sales people I know are true professionals. They do their homework, are persistent, listen a lot, ask a lot of questions, prepare carefully and thoroughly, and don’t waste time on likely-futile lunches and golf games. There’s a mistaken impression among many that this is “natural”, that these women and men just “get sales.”
Not true. In fact, these “pros” are likely the ones fortunate enough to start their careers at companies that invested in sales training; had mentors who helped them grow and mature, worked for managers that supported them and helped them learn from their mistakes. These managers understand the sales process, and how it works both internally and externally. Did they learn this in business school? Highly unlikely.
Sales’ task is to find out what customers’ pain points were and figure out if and how their company’s offerings will alleviate that pain. It is NOT convincing a prospect to use your stuff, but rather to know prospects so well that you can identify the ones most likely to buy your stuff. There’s a VERY big difference.
In the work comp world, we all know sales people who are constantly on the move. Many are pure relationships sales people; they sell to their friends, and when they run out of friends to sell their current stuff to, they move on. In contrast there are a relative few who are true professionals, able to mix the relationship with the consultative, skilled at leveraging their personal reputation to gain entre to a prospect where they work very hard to determine if there’s a fit.
As I look at the work comp services industry, not much has changed over the last couple of decades. At many companies there’s a lack of appreciation for and of sales. That’s not to say senior management doesn’t want great sales people, they just don’t understand what makes one a great sales person, and what management needs to do to help sales continue to deliver. There’s usually a distinct lack of training as well, little effective mentoring, and lots of internal conflict between operations and sales – a clear indication that not enough has been done to ensure sales and operations work together effectively.
What does this mean for you?
With the ever-changing landscape in work comp – mergers, acquisitions, vertical consolidation and internalization of services by many TPAs, retirement of many senior execs in “buying” roles, the growing role of the Procurement departments at carriers such as the Hartford and Liberty Mutual, it is becoming increasingly clear that work comp service entities will have to invest in their sales departments and staff if they are to succeed.
Apr
25
Happy Monday! here’s a few items you may have missed.
King v CompPartners – the California case may have implications for UR, IMR, and the “exclusive remedy” foundation of worker’s comp.
Here’s a very brief summary (see url above for more detail).
- The underlying issue – did CompPartners’ UR reviewer do the right thing? is not in question. The treating doc’s request was appropriately rejected as it was inconsistent with California’s evidence-based treatment guidelines.
- However, the patient allegedly suffered seizures due to sudden cessation of the medication, and contended that the UR physician had a “duty of care” to inform the patient of that risk and recommend a weaning process.
- The plaintiff took the case outside the work comp judicial process to civil court, where he lost. It then went to Appellate Court, where the ruling raised this “question”: could Utilization Review be considered medical treatment, and the reviewer a treating provider?
- This is contrary to all work comp precedent; the case is now before the State Supreme Court, which has stayed the Appellate Court’s ruling pending a decision.
Implications – talking to those who know better than I, the Supreme Court will likely reject the Appellate Court’s validation of civil court as an appropriate venue for the case, thereby reaffirming the “exclusive remedy” inherent in workers’ comp.
One issue that strikes me about this case; as the medication in question was prescribed by a physician for a condition deemed not covered by workers’ comp, why did the patient not a) pay for the medication himself or more likely b) get his health insurer to cover the script?
This would have allowed the patient to continue taking the drug and avoid the health issues experienced by the patient allegedly due to suddenly stopping the medication.
If you are in ChicagoLand and/or looking into value-based networks, read this. Really interesting piece on how a big provider system thinks about narrow networks, contracting, and what it wants to get paid for high-end services. And will “eat” on commodities, such as MRIs for $100.
Here’s a shocker – media is all over reports on how chocolate helps athletes – even if the underlying study is pretty much nonsense. A much more important study that determined a very common spinal procedure is fraught with danger and likely counter-productive – was all but ignored.
From HealthNewsReview:
“Provocative discography” is a diagnostic procedure that’s used up to 70,000 times a year in the United States at great cost to the health care system. It’s commonly performed on patients with so-called “degenerative disc disease” who are considering spinal fusion surgery — a $40 billion per year industry”
If you have to rely on MCM to hear about critically-important research, there’s something really wrong with the mass media.
Looking forward to NCCI next week; will be on a panel moderated by Peter Burton with Mark Walls and Bob Wilson discussing regulatory issues.
Hope to see you there.
Apr
21
Thanks to Peggy Salvatore of Health System Ed for hosting this week’s Health Wonk Review – great graphics coupled with quick synopses make for a readable and entertaining edition indeed.
One don’t-miss is Dr Bradley Flansbaum’s piece on his history with the pharma industry. Pretty compelling stuff and especially enlightening for those of us without direct experience similar to Dr F’s.