Insight, analysis & opinion from Joe Paduda

Jun
26

Progress on opioids – Texas leads the way

Posted by Joe Paduda on Tuesday, June 26th, 2012 | Comments

There’s precious little good news on the subject of opioid overuse in work comp; NCCI and WCRI report increased usage, pill mills abound, CWCI’s research shows longer disability durations, and payers lament their inability to do much of anything to fix the problem.
The last two weeks have brought news that is welcome indeed; early indications are that Texas’ adoption of a restricted formulary has led to significant reductions in the use of opioids early on in new claims, stakeholders are focusing on preparing to address legacy claims, and there may well already be some impact on legacy claims.
For those not deep into this issue, Texas is one of the few states (and almost all the others are monopolistic WC states) that has adopted tight guidelines re the prescribing and dispensing of opioids to workers comp claimants. These guidelines were imposed on all claims occurring on or after September 1 2011. While it is still early, preliminary research indicates a significant impact on prescribing and dispensing patterns. (the changes compare claims occurring from September to November 2011 to claims in the same timeframe in 2010)
– prescription drug costs for drugs “not recommended” (N) for 2011 claims were reduced by 75 percent when compared to 2010
– the number of claims receiving “N” drugs dropped by 54 percent
– total prescription drug costs for 2011 claims declined 26 percent – about $1.4 million
– “the frequency of opioid prescriptions dispensed to injured employees decreased by 10 percent and the costs associated with opioid prescriptions decreased by 17 percent”
Word is there has also been an impact on older, legacy claims. Anecdotally, PBMs are reporting they are seeing changes in prescriptions for some claims that were incurred long before 9/1/11.
The data from Washington state is another indicator that physicians can and do change prescribing patterns when forced to by regulation. Washington saw a significant decrease in the volume and potency of opioid prescriptions after passage of legislation addressing the issue.
What does this mean for you?
Prescribing patterns can be changed. All it requires is:
a) political will; and
b) tough regulations and/or legislation.

Jun
22

Health Wonk Review isn’t waiting for the Supremes…

Posted by Joe Paduda on Friday, June 22nd, 2012 | Comments

Actually, it was.
Faithful readers will note the delay in this biweek’s publication of HWR, a delay that was not an oversight but intentional; like many of you I’ve been waiting breathlessly for news of the Supreme Court’s pending decision on PPACA.
Alas, the distinguished folk in the black robes aren’t cooperating, so I’ll have to proceed without them.
Much as the real world is. For truth be told, the real world is moving rather quickly towards reforming bits and pieces of what passes for a health care system. And herein begins our tale.
We lead with the estimable Maggie Mahar. Maggie believes if the Affordable Care Act’s individual mandate is ruled unconstitutional by the Supreme Court the government will have to take a carrot-and-stick approach to encouraging healthy Americans to buy individual insurance – and it will likely have to focus much more on carrots. The individual mandate isn’t likely to drive much in the way of behavior change as the penalty wasn’t much of a “stick”.
Maggie’s fellows take this a step further, Harold Pollack and Henry J. Aaron explain how a new GOP majority would assault the health reform law, but wouldn’t stop there; Medicaid and Medicare are on the chopping block too.
At HealthAccess.org, Anthony Wright discusses the “evolution” of the GOP; it’s worth pondering the reasons of the amazing switch of Republican leaders on the individual mandate, from originating the idea to disowning it entirely and saying it in unconstitutional. This transformation is first and formost about politics, of course. But it is more than that–it’s that the mandate forces government to take direct and serious action to force insurers to abide by rules that encourage coverage; “showing that governmental action could actually make progress on social issues.”
Horrors!
David Williams, one of the more insightful observers of all things health care related, doesn’t think the GOP is ready or willing to engage in a meaningful discussion of health reform – but it will need to get serious quick if it wants to be taken seriously
The Huffington Post’s Sanjay Sanghoee thinks losing ACA isn’t that big a deal, as it wasn’t going to accomplish much in the first place. If it does get overturned, Sanghoee wants President Obama to push the public option as a much more robust solution that is much more likely to work.
Methinks the New America Foundation’s Justin Jones and Sanjay would have an interesting discussion re the role of the free market; Justin notes that while the Anti-ACA crowd has long vilified the ACA as an unprecedented intrusion of government into the free market, the ACA is actually very market friendly and free-market advocates should consider whether it would really be the end of the world if it is upheld in its entirety.
But the discussion between Justin, Sanjay, and Bob Vineyard of InsureBlog would be even more interesting; Bob thinks we are being “primed for single payer“; Bob says single payer is a “system with a 100% failure rate.”
Love ya, Bob, but I guess it depends on how one defines “failure”; with 50 million uninsured and tens of millions more under-insured, we ain’t exactly a model of success in coverage, or outcomes, or cost!
My contribution this fortnight focuses on the impact of health reform on employment – Massachusetts has been a great laboratory, and the results are instructive.
Roy Poses – who’s been with HWR since its inception seven (!!) years ago draws parallels between Wall Street, the financial debacle, and the inherent issues with conflicts of interest at the highest levels of government and health care.
Roy is joined in his effort to increase understanding of potential conflicts of interest by Alison Hwong, an MD-PhD candidate at Harvard, and Lisa Lehmann, the Director of the Center for Bioethics at Brigham and Women’s Hospital; posting at Health Affairs, Alison and Lisa stress the importance of going beyond simple disclosure of physican-industry financial relationships to help patients understand the context and implications of these relationships.
Neil Versel wants the public to know that they do have a right to access and correct their own health information, though few know about this or do anything about it. Better to do that now than when it’s critical to your life – and perhaps too late.
Among the other hot topics on the minds of bloggers was obesity – childhood and otherwise.
Kat Haselkorn digs into NYC Mayor Mike Bloomberg’s move to shrink the size of sugary beverages – she’s not sure it will succeed, but applauds the politically-sensitive mandate nonetheless.
This isn’t just a NY thing; out West one of our favorite insurance brokers Louise discusses a similar move in Colorado where a new law bans trans fats in “competitive foods” in public schools.
We conclude with thought-provoking posts about things most of us don’t spend enough time thinking about, and Jessie Gruman’s contribution calls for all of us to consider the implications of moving from curative to comfort care whe “Shifting to Palliative Care”.
Julie Ferguson shines a light on an important public health issue: domestic violence in the workplace. Homicide is a leading cause of occupational death in U.S. women, and while work homicides in general are trending down, homicides of women at work are trending up.
Michael Gavin wants workers comp payers to pay attention to the quantity of opioids their claimants are taking, and do something if it gets excessive.
John Goodman opines that failing to make consumers price-sensitive at the point of purchase is one of the biggest problems with health care. No argument there, although it is no panacea – when you’re on the ER table with chest pain you’re not exactly ready to negotiate.
We do know the Supremes’ decision will come down next Monday or Tuesday, and we’ll likely have a special edition of HWR when it does…if Julie says we can.

Jun
20

What’s a Prescription Monitoring Program and why you should care

Posted by Joe Paduda on Wednesday, June 20th, 2012 | Comments

Prescription Monitoring Programs are state-based electronic information systems that collect and deliver information about the drugs dispensed to patients, the prescribers thereof, and the pharmacies that do the dispensing.
Each state now has legislation enabling a PMP, with New Hampshire just added to the list. Not all are operational, and even among those that are there is wide variation among and between PMPs. Some are mandatory – that is, they require physicians and/or pharmacies to check them before prescribing or dispensing certain drugs. Others are optional – not surprisingly, usage in mandatory states is much higher than in those states where usage is optional.
What drugs are entered into the system also varies, with some states requiring much broader lists of drugs be tracked via their PMP – typically Schedule II – V Others only require tracking for the most potent Scheduled drugs.
PMPs can identify likely doctor-shopping and patients getting multiple fills for the same script, prevent duplicate fills, guard against dangerous drug-drug interactions, help law enforcement identify potentially fraudulent or criminal activity, and help physicians assess the risk in prescribing narcotics.
There have been some significant results. This from Brandeis’ University’s PMP Center of Excellence:
• Ohio – emergency department medical providers found that 41% of those given PMP data altered their prescribing for patients receiving multiple simultaneous narcotics prescriptions. Of these providers, 63% prescribed no narcotics or fewer narcotics than originally planned, while 39% prescribed more.
• California – 74% of physician responders to a survey indicated they had changed their prescribing practices to a patient as a result of using PMP Patient Activity Reports (PAR); 91% rated the “effectiveness of the PAR in maintaining the care and health of your patient” as good to excellent.
• Kentucky – A 2010 survey of users of Kentucky’s PMP, Kentucky All Schedule Prescription Electronic Reporting (KASPER), found that were an aid to clinical practice, with 70% of prescribers and dispensers judged PMP reports to be “very” or “somewhat” important in helping them decide what drug to prescribe a patient; 90% of prescribers and pharmacists “refused to prescribe or dispense a controlled substance based on the information contained in a KASPER report.”
• Louisiana – Five doctor shoppers who each obtained an average of 16.9 controlled substances prescriptions per month prior to rollout of the state’s PMP in September dropped to 0 prescriptions by December.
• As the Massachusetts PMP began sending unsolicited PMP reports regarding possible doctor shoppers to prescribers in 2010, prescribers were asked about the usefulness of the reports. Of the first 162 responders, only 14% said they were “aware of all or most of other prescribers,” and only 13% said “based on current knowledge, including the report, the patient appears to have legitimate medical reason for prescriptions from multiple prescribers.”
PMPs – properly set up and implemented – can be valuable tools in the battle against opioid abuse and diversion. Alas, the AMA and some other provider and “patient advocacy” groups find fault with PMPs, decrying the extra labor involved in ensuring patient safety and raising what are mostly ill-founded concerns with patient data.
There will be much more to come on PMPs; they need support, strengthening, and financial resources. Remember this.

Jun
19

Hospital collections down…your costs up?

Posted by Joe Paduda on Tuesday, June 19th, 2012 | Comments

Seeking protection from double digit annual premium increases, employers have increasingly shifted premium costs to employees and increased deductibles and copays. That’s been largely responsible for the flattening out of rate increases, but there’s been a downstream effect that was entirely predictable.
Hospitals’ write-offs for bad debt were surprisingly stable during and immediately after the recession – since then, they’ve increased dramatically.
In Q4, 2011,“uncollectibles” hit 7.38 percent of gross revenue, up from an average of about 5 percent over the previous eleven quarters.
There’s likely a direct connection between increased employee deductibles and copays and hospital bad debt. And that trend will continue. According to a piece in Health Plan Week [subscription required], employees will pay “34.4% for health coverage (a combination of premiums and out-of-pocket costs) — up from 33.2% in 2011.”
In real money, that’s about eight thousand dollars, and headed higher.
While the higher deductible amounts are undoubtedly making consumers more price sensitive, they also require consumers to pre-fund those accounts so that if and when they need care, the dollars are there. What appears to be happening is many of the health savings accounts aren’t adequately funded so hospitals aren’t getting paid for the patient’s part of the treatment cost.

Simultaneously, Medicaid (about nine percent of the average hospital’s revenue) reimbursement is under enormous pressure as legislators look to reduce costs and Medicare is tightening up as well.
The result? Hospitals’ revenues are shrinking while they’re pressured to improve patient safety, streamline administrative processes, better document care, and invest in IT.
The money’s got to come from somewhere.

What does this mean for you?
Workers comp, auto, and general liability insurers, hold on to those wallets. You’re a very soft target.

Jun
15

The (second to) Last Word on the AIG bailout

Posted by Joe Paduda on Friday, June 15th, 2012 | Comments

We taxpayers agreed to pony up $182.5 billion to bail out AIG after the credit derivative debacle (well, mostly we taxpayers). There were two criticisms of the deal; first that the government should allow the market to determine winners and losers, and second that we’d lose our money. First, the second criticism.
As of yesterday, the Federal Reserve got all its money back plus more. AIG (now doing business as Chartis) announced it has repaid all the Fed money it borrowed (it did not need $21 of the $182.5 billion) and dramatically reduced the amount it owes the US Treasury.
To date, AIG has paid back about $152 billion.
While most of these dollars came from the sale of assets – insurance companies, leasing companies, and other subsidiaries of AIG, this would not have happened if not for significant improvements in the company’s ongoing operations.
That is a credit to the Chartis employees who suffered – and I do mean suffered – through the brutal conditions after AIG’s credit derivative investment group damn near killed the whole company, and a good chunk of the world economy along with it. Whether it was navigating the crowds of protestors outside company buildings, avoiding neighbors at cocktail parties and cookouts, testifying before regulators and Congress, or talking to customers, brokers and prospects, the late summer and fall of 2008 were just awful.
Chartis still has significant issues (excess work comp book is a big one), but CEO Benmosche has the company back on the right track. And thanks to those who stayed and fixed Chartis, the Fed has actually made a profit on that bailout – a profit of at least $3 billion and probably twice that.
In regard to the first complaint about the bailout, there’s a legitimate argument to be made that governments should not bail out companies that fail. In the case of AIG, I believe that’s not the case, for two reasons.
First, inadequate regulations undoubtedly played a part in the credit derivative issue. Thus, government was somewhat responsible for the disaster, and we – the people – are the government. We “allowed” AIG to made those now-obviously-incredibly-stupid investments (isn’t hindsight great?), so, because the problems inherent in a failure of AIG were so monumental, we have to share the responsibility for fixing the problem.
Second, AIG had its fingers in so many aspects of global finance that a failure would have been more than a disaster – it would have cratered the world economy and devastated many individuals, companies, and families. As I noted back in 2009, “AIG provides the underpinning for many pension funds and retirement plans; its financial instruments guarantee the returns for pensioners. It backs up the investment of many banks. It owns many of the airlines’ airplanes, planes that might be repossessed if AIG goes under. AIG insures many Fortune 500 companies, and is among the largest writers of workers comp in the nation. It is a large individual auto insurer as well.”
Thanks to WorkCompCentral for the head’s up.

Jun
14

PMSI’s Opioid Summit – part one

Posted by Joe Paduda on Thursday, June 14th, 2012 | Comments

I was invited to attend PMSI’s Opioid Summit last month and speak briefly on legislative and regulatory actions focused on this issue. The Summit featured Colorado WC Medical Director Kathryn Mueller MD MPH; PMSI Medical Director Natalie Hartenbaum MD MPH; Len Kamen DO and addictionologist; and representatives from several insurance companies, all speaking on their efforts to identify and address potential overuse and misuse of opioids.
Here are a few of the highlights from the meeting. I’ll skip the discussion of the scope of the problem; it’s huge and growing, but it’s time to talk solutions.
First up, what is pain management – Dr Mueller cited the AHRQ Technical Brief on chronic non-cancer pain, noting in part “the focus is not eliminating pain but managing pain to restore physical and mental function and quality of life.”
That is a KEY issue – managing v eliminating pain. It is unrealistic to expect to eliminate pain, and attempting to do so is in large part how we got to this disastrous point.
Dr Mueller went on to review ACOEM’s recommendations for opioid use, which, when compared to what actually happens out there, are pretty remarkable.
Dr Hartenbaum discussed urine drug testing (UDT) in chronic pain and workers comp, citing the WOEMA comparison of opioid guidelines and noting there are various testing protocols;
– before starting a patient on opioids and annually up to four times a year – more if misuse is suspected.
– once per year for “low risk”, up to 4+ times per year for higher risk, high dosage (>120 MED (morphine equivalent dosage)) and/or patients exhibiting aberrant behavior. Hartenbaum cited the opioid risk tool as potentially useful in risk-scoring patients.
Her discussion of UDT was detailed, thorough, and enlightening. (disclosure, Millennium Labs is an HSA consulting client; they were not present at the meeting).
There was more, which I’ll relate tomorrow.

Jun
12

Survey of UR in work comp – initial results…

Posted by Joe Paduda on Tuesday, June 12th, 2012 | Comments

HSA’s first annual Survey on Utilization Review in Workers Compensation. is underway and we’ve got a few preliminary findings to report. (click on the link to fill out the survey)
We are surveying C level execs as well as desk-level folks (claims adjusters, claims execs) for their opinions concerning and results of UR; 80 responses so far and here are a few of the highlights.
– The vast majority of respondents utilize UM/UR to control medical costs and ensure appropriate medical treatment, while for a minority it is a revenue generator.
– Among desk-level respondents whose firms internalize UM/UR, over a third cite UM as a core competency as a key reason for performing UR in-house. 40% cite controlling UM costs, while almost half note UM is integrated with other medical management programs. This is in contrast to executives’ responses; only one in five claims UM is a core competency…
– There’s a big gap between desk level folks and execs when it comes to integration of UM with other systems, with execs twice as likely as front-line staff to report they are integrated. Interestingly, this is similar to the difference between execs and desk level staff we found in our bill review survey; most execs thought BR was integrated with UR but most desk folks did not.
There’s lots more to come, as we’re collecting a wealth of data on utilization review trends, services, vendors, costs, outcomes, and functions. Respondents receive a detailed version of the survey report; the public version is limited to highlights and major findings.
We welcome your participation in the survey. The On-Line Survey should take 20-25 minutes tops, and one lucky recipient will receive an iPad 2 as a token of our appreciation (make sure you include your contact info if you want a shot at the iPad).

Jun
11

Health reform – job killer?

Posted by Joe Paduda on Monday, June 11th, 2012 | Comments

One of the concerns expressed about health reform and the additional financial burden it places on employers – particularly smaller employers – is that it will lead to fewer jobs as bosses cut employees to reduce expense.
Fortunately, thanks to the forethought of Massachusetts’ legislators and then-governor Romney, we have a “lab’ that’s providing real-world information on the cost and impact of health reform.
On the employment issue, it appears there’s no negative effect in Massachusetts. [opens pdf] According to research published by the Robert Wood Johnson Foundation, Massachusetts’ employment data indicates the employment picture post-reform was not negatively affected by that reform;

  • “Declines in private-sector employment were consistent across the states–falling 4.4 percentage points in Massachusetts, compared to 4.8 percentage points, on average, in the rest of the nation.
  • The employment ratio in medium-sized firms with 50-499 employees fell by 1.9 percentage points, compared to 2.2 percentage points in the rest of the nation.
  • Even when accounting for firm size, industry, and job and worker characteristics, the trends in Massachusetts are similar to those in the nation as a whole.”

The study itself was quite robust, delving into worker types, skill levels, age, full time v part time, and education level. Across the board, there did not appear to be any difference in employment trends – after implementation of health reform – between Massachusetts and the four states used as a comparison basis.
There’s another aspect to this issue that bears mention.
Small employers, and sole proprietorships (like my firm) are finding it increasingly difficult to get insurance coverage due to insurance underwriting, pre-ex exclusions, and rating practices. And let’s not get into the application process, which is akin to applying to college and for US citizenship in terms of the information required and length of the process.
At some point these individuals and firms may move to Mass to ensure ongoing access to health insurance. They’ll bring their tax dollars too. I know of one new company forming in Mass specifically to ensure the partners’ families have access to insurance without exclusions.
What does this mean for you?
Unintended consequences can be good, too.

Jun
6

Texas responds…

Posted by Joe Paduda on Wednesday, June 6th, 2012 | Comments

My post earlier this week about the new opioid prescriber audit program recently announced by Texas’ Department of Insurance generated a rather interesting back-and-forth with TDI staff.
First, they were “disappointed” I didn’t post their entire response to the questions I emailed to TDI. There are a couple reasons for this:
1. TDI’s email response read like boilerplate, didn’t directly answer my five questions, and only indirectly answered three (I only figured this out after reading and re-reading the response several times; it was pretty convoluted).
2. I don’t post responses as a matter of course; if they are germane and responsive, I may well do so.
3. I received inconsistent guidance from TDI re the purpose of the audit – which is more accurately described as a peer review of 15 physicians’ prescribing patterns and comparison of those to guidelines. Nothing wrong with that audit, but as I noted in the original post, TDI’s reviewers will “have a good perspective on prescribing patterns for 15 docs, but…to what end?” The language in their email led me to believe the purpose was enforcement, but I was told that the purpose was actually “quality care for injured workers” (or words to that effect) – before I was told no, it was actually enforcement (in another communication). So, with no clear guidance, it was kinda tough to figure out the purpose of the audit.
Second, Amy Lee took me to task for neglecting to mention TDI had – in fact – published system-wide research on the types and usage of drugs in Texas. Lee was correct as I should have noted TDI has published results of two studies, one in 2011 and one here – (for some reason the embedded link doesn’t work) www.tdi.texas.gov/reports/wcreg/documents/Pharmaceutical_Prese1.ppt.
There was a lot more to the back-and-forth, but there’s no point in recounting the “he-said, she-saids”.
Instead, I’d suggest there are a couple take-aways.
1. I’ll continue to work to be more careful in giving credit where credit is due.
2. I never got an answer to my questions; why limit this to 15 docs?; and why not look at docs who prescribed meds for claimants with other prescribers? I’m still wondering, as are many others.
As I noted Monday, “payers have been required to report all manner of information to Texas for several years, with rather draconian penalties for failure to report. With this wealth of data, gathered at great expense and at no small cost to employers and their payers and vendors, it should be relatively simple to provide in-depth information on prescribing patterns around the entire Lone Star State. These data could be case-mix adjusted as well, something that isn’t mentioned in the TDI announcement on the current project.”
Now THAT would be helpful, and provide policymakers and other stakeholders with a wealth of information. While TDI did publish some research, in relation to controlled substances it was limited to system-wide script types, counts, costs, and number of claimants using (or more accurately billing for claimants dispensed) those drugs. There’s so much more that could be gleaned from the data; regional- or area-specific differences, scripts by type of injury, duration of care, case-mix adjusted comparison of claimants prescribed and not prescribed controlled substances, scatter plots or line plots of physician prescribing volumes by any number of variables…you get the picture.
Which leads me to point 3.
3. This all could have been avoided if TDI had responded to my query with direct answers. If that wasn’t possible, they could have called and said, hey, thanks for the query, but for reasons A, B, and C we can’t tell you that. Trying to get media – even we lowly bloggers – to play “find the answer in the vaguely-worded boilerplate” may sound like fun but in the end this hurts a lot more than helps.
You end up with a confused and frustrated writer, where you could have had another media outlet describing your yeoman efforts to improve things in your comp system.
FWIW, my original query, followed by TDI’s response is below.

Continue reading Texas responds…

Joe Paduda is the principal of Health Strategy Associates

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