Category: Research

Jul
20

Hospital misdiagnoses harm or kill 800,000 Americans a year

Posted by Joe Paduda on Thursday, July 20th, 2023 | Comments

A just-published research study found:

Annually almost 800 000 Americans are permanently disabled or die annually due to misdiagnoses.

That is equivalent of a fully loaded (318 passengers) 787 crashing with about a 50/50 split between deaths and serious injuries every three and one half hours every day (24/7) for an entire year.

At that rate, how many tickets do you think the airlines would sell? So why does Big Med get away with it? (thanks to a very insightful reader for this analogy)

And this was based on a study of hospital discharges BEFORE COVID and its attendant staffing crises.

The study in the British Medical Journal comes on the heels of an HHS analysis of diagnostic errors in Emergency Departments that estimated:

  • 7.4 million misdiagnosis errors are made every year,
  • 2.6 million people receive a harm that could have been prevented,
  • another 370,000 are permanently disabled or die because of the misdiagnosis…
  • This equates to about 1,400 diagnostic errors every year per emergency room across the country.

In general diagnostic accuracy is pretty good; 1 in 18 patients are inaccurately diagnosed (5.7%).

What’s pretty scary is the diagnosis error rate across hospitals varies “up to 100-fold.”

Notably fractures were among the most commonly misdiagnosed conditions…(p 18)

HHS’ full report is here.

What does this mean for you?

Be your own healthcare advocate and don’t be afraid of questioning physicians.

Jul
18

The cost of heat

Posted by Joe Paduda on Tuesday, July 18th, 2023 | Comments

While ignoramuses continue to deny we humans are changing the planet’s climate, folks with P&L responsibilities are calculating the cost of heat and heat-related injuries.

The direct cost of one “heat prostration” claim is about $38,000.

The average company has to generate $1.2 million in revenue to cover each heat prostration claim.

Want specifics?

Excessive heat also creates more injuries of all types…injuries to cherry harvesters in Washington State increase 1.5% for every 1 degree C above 25 C (77 degrees F) – mostly from falling off ladders.

California data shows:

    • compared to days with temps in the 60s,
      • on days when the temperature was between 85 – 90 degrees Fahrenheit…the overall risk of ALL types of workplace injuries was 5 to 7 percent higher.
      • when temps topped 100 degrees, the overall risk of injuries was 10 to 15 percent greater.

OSHA has a very handy calculator employers can use to estimate their costs – especially useful for the half of the country broiling under record temps.

Oh, and the workers most affected by heat? That would be the lowest paid workers, those leases able to afford time away from work…you know, the ones the work comp industry should be “advocating” for.

What does this mean for you?

Ignore science at your financial peril.

Jul
12

Quick hits – AI in WC, Automating construction, Junk healthplans and other misadventures

Posted by Joe Paduda on Wednesday, July 12th, 2023 | Comments

A week away from the blog is now past…here’s what I missed.

myMatrixx’ Chief Innovation Officer Cliff Beliveau – one of the smartest and most articulate tech people I have ever met – penned an excellent summary of AI’s potential uses in and impact on workers’ comp in yesterday’s WorkCompWire.

Cliff highlights key opportunities and challenges in claims, medical management, fraud detection and claims oversight…download his piece and save it.

Will automation disrupt construction? A better question might be “when will automation disrupt construction?”

Even better “when will what parts of the construction industry be disrupted by automation?”

All are addressed here.

Net is this – the author isn’t convinced we’ll see massive automation within the next decade...but points to a key use of technology that is already speeding up construction  – and making it more efficient to boot.

Surprise! medical bills and Junk healthplans – defined as plans with significant limits which often aren’t clearly identified up front – are facing increasing scrutiny. The White House is proposing strict disclosure standards and time limits on junk plans…

“The new proposed rules would close loopholes…that allow companies to offer misleading insurance products that can discriminate based on pre-existing conditions and trick consumers into buying products that provide little or no coverage when they need it most,”

The two – surprise! bills and junk plans, sort of complement each other…the junk plans don’t protect families from healthcare providers’ aggressive billing practices.

The proposed rule would highly limit duration of the plans, requiring clear disclosure of policy terms (as in written in English), and close coverage loopholes.

And one more note of interest for smaller employers looking at self-funded plans, and especially level-funded plans...AM Best’s April 28 2023 Market Segment Report indicates:

  • 2 out of 5 small employers (3 – 199 employees) are in level-funded plans
  • Just a year ago it was 1 out of 8 employers…
  • stop loss insurance loss ratios jumped to 85% in 2021 driven by new and very expensive specialty drugs and a lot more million dollar claims.

Just in the last year, 5 specialty drugs, each costing more than a million dollars annually per patient – have come to market.

What does this mean for you?

Smaller employers be very, very careful of self-insuring… 

Jun
29

Tilting at windmills

Posted by Joe Paduda on Thursday, June 29th, 2023 | Comments

Is an apt metaphor for my ongoing and – so far – futile effort to get industry “thought leaders” to focus on the impact of human-caused climate change on worker health – and workers’ comp.

But, never one to admit a cause is hopeless (see my past battles to stop physician dispensing)…here we go again.

KFF just published an analysis identifying the:

occupations that are at increased risk of climate-related health impacts, examines the characteristics of workers in these jobs, and discusses the implications of these findings

This should be required reading for actuaries, underwrites, and risk managers…especially those in states:

  • with record high temperatures – looking at you, Texas;
  • vulnerable to hurricanes – looking at you, southeastern coastal states;
  • and under air quality alerts due to wildfire smoke – looking at most of the midwest and northeast – and western states too.

so much for my rowing workout this morning…or construction work, or agricultural work, or roadway maintenance, or utility upgrades, or forestry, or sanitation, or first responders…

Key takeaways from KFF’s research…

  • there are over 65 million nonelderly adult workers in occupations at increased risk for climate-related health risks, accounting for over four in ten of nonelderly workers.
  • workers in occupations with increased climate-related health risks are more likely to be uninsured, contributing to challenges accessing health care.

For risk managers, actuaries…and anyone a) committed to worker health and/or b) with dollars at risk, ere’s a handy list of occupations with high exposure to climate-change related health risks…

What does this mean for you?

Reality always wins. 

Ok trolls, have at it…

Jun
7

Work comp provider networks and access to care

Posted by Joe Paduda on Wednesday, June 7th, 2023 | Comments

Of late there’s been “confusion” in several quarters about the impact of provider networks/PPOs/specialty networks on access to care and outcomes.

These uninformed or willfully ignorant folks claim all manner of bad stuff is due to workers’ comp provider networks – without an iota of evidence to support those assertions.

Let’s pick on the Golden State…

Let’s be clear…actual research shows:

there is NO significant difference in access to care for patients treated within or outside a Medical Provider Network.

This from CWCI’s report…

Similarly, there was no significant difference in distance from the patient to provider between MPN and non-MPN patients.

Quoting CWCI…

The latest proximity to care findings also track with results of CWCI’s April 2021 research which found that 99 percent of claims in which treatment was rendered by an MPN provider, and 98 percent of non-MPN claims met the state’s access standards.

What does this mean for you?

Do NOT give any credence to statements similar to: “of course, paying providers less than fee schedule affects access to care” UNLESS they are backed up by real research and not built on a pile of unfounded and unsupported assumptions.

Jun
6

the basics of price and spend in work comp medical…

Posted by Joe Paduda on Tuesday, June 6th, 2023 | Comments

Basics here folks…

Facility costs soak up 2 out of every 5 dollars of work comp medical spend.

“Physician” costs take up another 2 bucks…however that is misleading.

In NCCI-speak, “physician” is a catch-all for most practitioners…MDs, DOs, PTs, chiropractors, PAs…and, the “physician” fee schedule in most states doesn’t apply to things like physical medicine (PM).

Historically PM accounts for right around one of every 6 work comp medical dollars (yes that is a very solid number based on a ton of work I’ve done), although like everything in work comp it varies somewhat by state.

Then there’s drugs, dx imaging, DME, etc.

Drugs account for less than 10% of spend, a figure that has been declining for years thanks to much better clinical management of pharmacy  – mostly by PBMs – more generic usage, a massive decrease in overuse of opioids, fewer new brand drugs used for MSK injuries, and declining fee schedules.

Risk and Insurance’s Annemarie Mannion penned an excellent explanation of how Medicare reimbursement affects work comp fee schedules.  Read her piece and save it in your reference files…you will need it in the future.

Finally, network penetration does have some effect on prices paid…although that impact has declined over the last few years as providers have figured out that when it comes to negotiating with health systems, workers’ comp is pretty much clueless.  Here’s a synopsis of network impact from a post a couple years back.

 

Jun
1

that giant sucking sound…v3

Posted by Joe Paduda on Thursday, June 1st, 2023 | Comments

is hospitals hoovering dollars out of employers, work comp insurers, and taxpayers’ wallets.

(sorry all…due to a bug in WordPress some of you may be getting this again)

WCRI’s latest research report on hospital costs is a must-read for anyone involved in work comp claims, medical management and actuarial issues. Kudos to Drs Olesya Fomenko and Rebecca Yang for their excellent work. 

The study focuses mostly on how payments for outpatient surgery vary across the different types of fee schedules (no fee schedule vs fixed amount vs cost to charge ratio vs percent of charges…)…and how those payments have changed over time.

But there are several other issues that I’d argue are more impactful.

  • It’s not so much the type of fee schedule as other factors…
    • there’s a LOT of variation between states with the same type of FS
    • failing to expand Medicaid is a big problem for hospitals
  • Basing fee schedules on percent of charges is a really bad idea…
    • states with %-of-charges FS had – by FAR – the highest costs, averaging more than 3 times what Medicare pays. (Medicare reimbursement is slightly above break-even for hospitals)
    • `hospitals easily game the “fee schedule” by jacking up list prices
    • 2 of the three states with the largest increases in hospital payments had FS based on %-of-charges
  •  States with NO fee schedules were not quite as bad – averaging “only” 225% of Medicare
  • Clearly network arrangements have failed miserably. 

What does this mean for you?

Actuaries…check the inflation trend to predict where costs will be in the future

Medical management folks…dig into your data to identify the worst offenders, and direct care AWAY from them.  Hint – HCA facilities are usually among the worse offenders.

Bill reviewers – STOP relying on network discounts and start getting  LOT smarter about dealing with facilities.

May
26

US healthcare quality is poor because…

Posted by Joe Paduda on Friday, May 26th, 2023 | Comments

Consumers don’t care.

Yesterday we dove into the disconnect between patient satisfaction (my nurse was sooo nice and my room…wow!) and quality of care (how likely was I to die).

Today, we focus on how this affects our healthcare. Or, as the researchers put it;

In an era of management by satisfaction survey, how does hospital competition shape the kind of medical services offered to patients? 

Leaving out the coefficients, standardized deviations, null estimates and other researchers’ esoterica, we find:

Local competition among hospitals leads to higher patient satisfaction, but lower medical quality. 

Yep, because we consumers value quiet rooms and nice nurses more than surviving an operation, health care facilities seem to focus more on quietness and niceness than on, you know, patients actually surviving.

And that’s because hospitals are competing desperately for private-pay patients, the ones insured by employers that pay three times more than Medicare. As the authors put it;

as a business strategy, investing in hospitality and hotel amenities offers a much higher return than medical quality. 

this research speaks to broad concerns about the unintended consequences of marketization…Hospitals have traditionally been conceived as an essential service to a community, but are becoming more like products in a consumer marketplace.

Those working in hospitals are increasingly expected to focus on the pursuit of customer satisfaction.

The day-to-day institutional question is shifting from “will this improve patient health?” to “will this raise satisfaction scores?” 

What does this mean for you?

Depends… life > comfort?

May
25

Patient satisfaction ≠ Quality of care

Posted by Joe Paduda on Thursday, May 25th, 2023 | Comments

Health care quality is a huge issue in the US; despite claims that we have the best healthcare in the world, reality is far different.

Why?  I’d argue its because healthcare consumer behavior drives our for-profit system.

What makes patients happy is completely unrelated to the actual quality of medical care they receive – or how likely they are to die.

Research article is here.

the horizontal axis indicates hospital performance by deciles for each category…note patient satisfaction doesn’t vary by hospital mortality and varies just a little by medical quality, but varies a LOT by nurse communication.

The effect of nurse communication on patient satisfaction is four times larger than the effect of the hospital’s mortality rate. Yup, as long as the nurse smiles, is responsive and nice, we’re satisfied. Never mind if we’re a lot more likely to die.

Another oft-measured factor, the quietness of the rooms, has a 40% larger effect on patient satisfaction than medical quality.

This is because hospitals provide two separate and distinct kinds of services  – the technical delivery of medical care and “room and board-related” services. Patients are much better at observing and rating the “hospitality” part of their hospital stay than the medical care they get.

To quote the authors;

Hospitality is the fast track to customer satisfaction in medicine. 

What does this mean for you?

Customer satisfaction is the fast track to profits… not to good medical care.

May
23

Work comp drugs – Three things

Posted by Joe Paduda on Tuesday, May 23rd, 2023 | Comments

Workers’ comp news…

After a long and litigious delay, myMatrixx has been awarded the contract to manage pharmacy benefits for the Coal and Energy programs run by the Federal Department of Labor’s Office of Workers’ Compensation Programs (OWCP). Details of the case – which involved a protest by rival PBM Optum – are here.

That’s the good news (the Feds should have had a PBM managing these programs years ago).

Now, the bad news.

The press continues to dive into the audit of the other OWCP program – the one that provides workers’ comp to all Federal employees (FECA). [audit report is free for download here]

The latest is from Leslie Small of AIS Health. [available at no cost via free trial subscription].

From Ms. Small’s piece:

  • “OWCP has been doing a poor job of both controlling the FECA programs spending on prescription drugs and implementing its own policies to ensure that prescriptions are being appropriately dispensed, said the OIG report.”
  • OWCP published a bulletin in 2011 that forbid reimbursement for fast-acting fentanyl prescriptions unless claimants had been diagnosed with a certain type of cancer…during the audit period…98.7% of the fast-acting fentanyl scripts that OWCP [and taxpayers] paid for “went to claimants without evidence of one of hte eligible cancer diagnoses” 
  • Even more troubling – if that’s possible – OWCP did not institute controls to mitigate opioid usage until the end of 2016, years after many commercial insurers, third-rate administrators, and large employees had done so…”

Here’s hoping this much-needed attention results in even-more-needed improvements.(my opinion only)

Drug costs in California are getting well deserved attention again; CWCI’s research identified 9 drugs – 3 each opioids, dermatologicals and antidepressants – that account for a significant percentage of total drug spend. CWCI members can get the full report at no cost; it’s $18 for others.

Briefly, branded anti-depressants, tapentadol/Nucynta, and the three anti-depressants make up a small percentage of scripts but a big percentage of dollars.

Of course, in the vast majority of cases the dermos are just BS drugs that should never be allowed…

What does this mean for you?

Don’t sleep on pharmacy...sure costs are down, but it still has a major influence on recovery, RTW, and claim closure.