Insight, analysis & opinion from Joe Paduda

Sep
7

Work Comp Pharmacy Week – #2

Posted by Joe Paduda on Wednesday, September 7th, 2022 | Comments

Yesterday we kicked off Workers’ comp pharmacy week with a quick review of WCRI’s latest research.

Today we’ll focus on our annual Survey of Pharmacy Benefit Management in Workers’ Compensation. We’ve been doing this for (gulp!) 19 years, and I’m (belatedly) ready to begin the 2022 Survey. Past public versions of the Survey are available here; there’s no cost and no registration necessary.

Respondents receive a more detailed version to reflect their contribution to the effort.

Top takeaways from last year’s report included:

  • Total work comp drug spend for 2020 was about $3 billion, or about 10% of total medical spend.
    • The percentage decrease from 2019 to 2020 was 12.3%
  • That’s down from $4.8 billion a decade ago.
  • Opioid spend declined 19.3% from 2019 to 2020; Opioids accounted for 17% of total drug spend across all respondents.
  • Pharmacy management remains important despite these decreases, primarily due to respondents’ view that drugs have a disproportionate influence on claim outcomes and disability duration.

Over the next few days we’ll be reaching out to past participants; if you are a payer and would like to participate in the Survey (and get the detailed report) please leave a comment below with your contact information (it won’t be published).

All responses are confidential, are only used in the aggregate or are de-identified to protect confidentiality.

 

Sep
6

Work comp pharmacy week!

Posted by Joe Paduda on Tuesday, September 6th, 2022 | Comments

There’s been a lot of news around work comp pharmacy of late – time to dive into what’s happening, why, and the implications thereof.

No better place to start than WCRI’s just-published study on the latest in drug trends across 28 states. (register here for the no-cost webinar – September 29 at 2 pm eastern). The research looked at trends over the three years from Q1 2018 to Q1 2021 (kudos to WCRI for getting this very recent info out quickly)

Key takeaways from Dongchun Wang, Vennela Thumula, Te-Chun Liu’s research include:

  • Rx payments (all figures are per claim) dropped 15% or more in almost 2/3rds of the 28 states..but went UP in:
    • Connecticut (+22%), Florida (+17%), and Pennsylvania (+14%)(hmmmmm…)
    • notably a major driver of the increase in those states was dermatological agents…driven by physician dispensing and/or mail order pharmacy dispensed drugs in those three states (and others)
  • COVID is a non-factor; COVID claims account for <2% of total Rx costs in most states
  • Other good news – opioids continued to decline in all 28 states – A LOT. As in a decrease of 56% in the median state
  • The biggest drop in spend occurred in New York – a 43% decrease driven by the adoption of a formulary in early 2020.
  • The range in spend is really striking; as of Q1 2021, the lowest state spend for claims with any medical spend was $22 (MA, MN, WI); the highest was almost 10 times higher in – you guessed it – Florida at $201.

So…takeaways

  • States that enable/allow/don’t prevent abusive prescribing and dispensing – looking at you, Connecticut, Georgia, Florida, Louisiana, Pennsylvania, South Carolina – and others – are allowing grifters and thieves to steal money from employers and taxpayers while over-treating patients. 
  • Lotions aka dermatological agents are almost entirely a (pick your term) enabled and perpetrated by physician dispensers and some mail order pharmacies…and the lack of aggressive and useful action by employers and insurers and their lobbyists.

Forecast

Insurers and employers and taxpayers in those states are going to get hammered by these bad actors. Costs for dermatological agents rose more than 50% in PA, CT, SC, FL, GA, VA, NC and MI.

Given the lack of an effective response by payers, their lobbyists and government affairs entities, you can expect more of the same.

What does this mean for you?

  1. Great work on the opioid front – although just slashing opioids is not THE solution to pain – this requires a multi-pronged approach.
  2. re dermatological agents – Do you like getting screwed by profiteers?
Sep
1

Wildly off-topic #8 – Ukraine attacks

Posted by Joe Paduda on Thursday, September 1st, 2022 | Comments

After more than six months of war that some were thinking was going to enter a stalemate, Ukraine flipped the tables on Russia.  Ukrainian forces are driving Russians back in multiple areas, although this is a hard slog.

Ukraine has several distinct advantages in this war.

  1.  Russians don’t really know why they are in Ukraine. Ukrainians know why they are fighting.  The ones on the front lines certainly do and pretty much every other Ukrainian does as well.  Their homes have been attacked, children murdered, and their economy wrecked by a madman. The will to fight is critically important.
  2. The west’s support of Ukraine has enabled it to hold Russia off while building the capacity to defeat the invasion.  We’ve spent billions – thanks to you, American, British, Dutch, Danish, Swedish, Norwegian, French, Polish, Italian, Pakistani, Czech and other tax payers. This has been an investment worth every penny, as the West’s total commitment has shown other would-be territory grabbers (looking at you China) that far from being the “decadent west” we are guarantors of peoples’ right to self determine their government. (sure we get this wrong far too often, but on balance we’re mostly on the right side.)
  3. Russia’s kleptocracy (a state ruled by thieves) has ensured their armed forces have crappy, outdated, and poorly maintained equipment. Sure they have far more cannons and tanks and planes and rockets – but a lot of those don’t work, are worn out or hopelessly obsolete – or their soldiers don’t know how to use them effectively.
  4. Russia’s army has a fundamental flaw – they can’t get the food fuel ammunition and spare parts to where it’s needed. (posted  on this way back in March with lots of details)
    If anything it has gotten worse. The HIMARS rocket systems and other really good artillery we’ve sent Ukraine are destroying ammunition and fuel dumps, blowing up communications centers, and killing dozens of high-ranking colonels and generals, de-capitating Russia’s army just when it is being attacked.

That’s enough of the cheerleading.

The awful truth is Ukraines’ military is losing hundreds of soldiers each week – far less than Russian losses, but devastating nonetheless. I cannot imagine how painful this is to each and every family that’s lost members due to Russian aggression; killed in an apartment building bored by the Russians, blown up by mines near a school, dead in combat or crushed in a shopping mall hit by Russian rockets.

What does this mean for you?

I’m very proud of what we Americans have done and are doing to support Ukraine.

You should be too.

Yes fuel and food prices are higher – make no mistake, that’s due to Putin’s invasion of Ukraine.  

Aug
31

On chronic pain and opioids, California’s State Fund is getting it done.

Posted by Joe Paduda on Wednesday, August 31st, 2022 | Comments

California’s State Fund has made impressive progress in the quest to reduce inappropriate opioid use – progress that has undoubtedly saved countless lives, helped thousands of workers regain their livelihood while protecting their families.

This has been done thoughtfully and carefully, acknowledging that patients taking opioids typically suffer from acute or chronic pain. Helping patients find alternate means of addressing and reducing pain and the impact pain has on quality of life and functionality has been central to the approach.

I’ve written about the State Fund before; I’ve been deeply impressed by its commitment to doing the right thing the right way – and to actually getting those right things done. The Fund’s early efforts were well-designed and produced solid progress.

(And I love their old marketing messaging)

That hasn’t always been easy; as a governmental entity the State Fund has multiple constituencies with sometimes differing or even conflicting priorities. Despite those challenges, the people at the State Fund – and their vendor partners – are making a real impact on workers in the Golden State.

The latest is continued success in reducing the use of opioids while addressing patients’ pain. Under the leadership of Medical Director Dinesh Govindarao MD MPH and Medical Management Director Alma Del Real, the good people in the State Fund’s medical management and claims departments implemented a three-pronged approach;

  • early prevention and intervention in new cases;
  • addressing relapse (patients returning to use opioids after a period of no opioid usage) and delayed recovery response; and
  • reduction of chronic opioid usage in existing cases.

The results make it clear that the approach is working:

  • From 2014-2021, State Fund saw a nearly 80% decrease in the number of claimants on any opioid prescription and a 4.6% decrease from 2020-2021
  • The number of patients taking high doses of opioids (80+ MEDs) for more than three months has dropped 91% from 2014-2021

The State Fund’s approach to chronic pain has been an “all of the above” strategy, supporting pretty much any type of treatment or modality that might help patients address pain, improve functionality and get back to being fully alive.

What does this mean for you?

We in the workers’ comp industry take our lumps – and often for good reason – for being too conservative, not forward-thinking or innovative, hide-bound by policies and procedures and too slow to adapt to a changing world.

Yet work comp led the nation’s efforts to address the crisis of opioid overprescribing, delivering impressive results long before our colleagues in group health and governmental programs had made any meaningful progress.

 

Aug
22

Why expanding medicaid is a no-brainer

Posted by Joe Paduda on Monday, August 22nd, 2022 | Comments

A dozen states have yet to expand Medicaid, a decision that has led to untold suffering for millions without healthcare.

This has also led to:

(I’ve written about this a lot.)

it looks like things might be evolving; Georgia is making progress, Expansion is on the ballot in South Dakota and there have been referenda in several Republican-led states.

Reality is states that expanded Medicaid saw significant positives; healthier people, improved economies, greater Federal financial support, and major job growth.

What does this mean for you?

Poorer folks need Medicaid, and there’s a ton of data showing why every state should do this.

Work comp folks – here’s how this affects you.

Aug
18

WCRI’s Primer on Behavioral Health Care in Workers’ Comp

Posted by Joe Paduda on Thursday, August 18th, 2022 | Comments

is one of the most important papers WCRI  has published in recent memory.

Authors Vennela Thumula PharmD and Sebastian Negrusa PhD have produced a comprehensive analysis of the subject, one every work comp manager, claims exec, regulator clinician and risk manager should have within easy reach.

Among the topics addressed are:

  • How do you define behavioral health in the context of workers’ compensation?
  • What are psychosocial factors and can they be a barrier to recovery following a work-related injury?
  • How important is early screening for psychosocial factors and other mental health conditions?
  • What non-medical and medical interventions exist to help those with behavioral health problems?

I’m working my way through the study; it has reinforced my belief that mental health/behavioral health issues/concerns are likely the primary barrier to recovery.

Chief among these are psychosocial factors that may impede recovery;

      • poor recovery expectations
      • fear of pain\catastrophizing
      • perceived injustice
      • pessimism
      • general fearfulness
      • job dissatisfaction
      • lack of family/social support systems

Friend and colleague Bill Zachry has long noted that Adverse Childhood Events can be a key obstacle to recovery  – in fact research indicates victims of abuse are more likely to be disabled during adulthood.

The paper also provides state-by-state details on coverage of mental stress and psychotherapy issues and the status of BH specialists as treating medical providers.

I’d be remiss if I didn’t note Carisk’s David Vittoria has been a persistent voice advocating for increased focus on BH issues. (Carisk is an HSA consulting client)

The study is free for WCRI members; there’s a nominal cost for non-members. Get yours here.

What does this mean for you?

Read this paper.

Aug
17

Climate change’s hidden impact on workers’ comp

Posted by Joe Paduda on Wednesday, August 17th, 2022 | Comments

Storms are more intense and more frequent; so are droughts. Everywhere is getting hotter. When it comes, rainfall is more intense.

The direct impacts of climate change on workers’ comp are pretty obvious:

  • higher risk for public safety workers;
  • increasing heat exposure and associated risks for agriculture, construction, forestry and other “outside” workers;
  • more infrastructure and construction work and associated payroll to rebuild and adapt

[Jeff Rush from California Joint Powers, Louisiana Work Comp Corporation’s Jill Leonard and I will be talking about climate change’s impact on workers’ comp at the National Comp Conference in Vegas) – mark your calendar for 12:30 on Thursday October 20.]

Thinking about this, there are both acute and chronic issues at hand; Fire, flood, and storm are acute events. This requires a crisis management approach; anticipate, prepare, triage, respond, recover.

Heat is different – it is chronic; unlike events it is pervasive, consistent, slowly increasing. This requires a more traditional risk management approach; assess, evaluate impacts, plan, educate, train, monitor, report, improve.

There are other hidden impacts, ones that payers would do well to think through.

For example…let’s use Hurricane Harvey which hit southeast Texas in 2017 causing $125 Billion in economic damage. As human-caused climate change increased Harvey’s severity by 30%; climate change’s added cost ran well into the tens of billions for that one storm alone. For a very detailed discussion of this see here.

photo credit CNN.com

Research published in the Harvard Business Review found:

  • 90% of businesses in the area surveyed by the researchers lost revenue due to Harvey;
  • 40% of businesses experienced property damage of which
    • over a a quarter were closed for a month, and
    • one out of eight were closed for more than three months.

Think about the – 1/8th of businesses are closed for more than a quarter, a time when payroll is likely non-existent – or close to it.

No payroll, no premiums.

Well, you may say, insurance covered that.

Nope – only 15% of surveyed firms got a payment – of any kind – from insurance.

What does this mean for you?

The more you think about human-cause climate change, the more impact you find.

Aug
15

I’m turning optimistic…

Posted by Joe Paduda on Monday, August 15th, 2022 | Comments

After too many months of doom-scrolling catastrophic weather events, rising inflation, ridiculously high medical costs, Russian fascism, social media wars over gender issues and elected officials that can’t seem to do anything but campaign for their next election, I’m starting to get just a little optimistic…

The economy…is doing pretty darn well. (Most of the below from Scott Galloway)

  • Employment has risen every month this year and we added more than 500,000 jobs in July
  • The unemployment rate is near a 50-year low.
  • Family spending – which accounts for 70% of the economy – has increased five of the last six months.
  • Two out of three companies in the S&P three companies have beaten Wall Street’s revenue estimates, and three in four have beaten earnings estimates.
  • According to one economist peoples’ fears are “completely at odds with the reality. I’ve never seen a disjunction between the data and the general vibe quite as large as I saw.”
  • yeah, inflation…but it was lower in July than June, and gas prices are down 20% from their high earlier this year…

Congress is actually getting a LOT done.

The just-passed Inflation Reduction Act will:

Oh, and the legislation also kept 13 million folks’ health insurance premiums affordable, which will keep more of us alive.

On the state level, it’s not just stupid waste-of-time caterwauling about gender issues… Colorado just passed bi-partisan legislation that “prevents hospitals or their collectors from initiating or pursuing debt collection from a patient if the hospital’s website was not in compliance with the Centers for Medicare and Medicaid Services (CMS)’ price transparency requirements at the time services were delivered”

Kudos to Colorado’s legislators for doing something Congress SHOULD HAVE DONE – put some damn sharp teeth in hospital price transparency legislation.

What does this mean for you?

Things are better than some would have you believe!

Aug
12

Health insurance saves lives

Posted by Joe Paduda on Friday, August 12th, 2022 | Comments

A just-released study shows people with health insurance are a little less likely to die than those without insurance. 

That is not surprising; preventive care, access to medications to control diabetes, hypertension, depression, cancer and the like, and early diagnosis of potentially life-threatening diseases are all going to keep people alive longer.

From the study:

The study approach taken by the research team bypassed concerns raised against previous non-experimental research on this topic.

The outreach intervention was a joint project designed primarily by the Treasury Department’s Office of Tax Analysis, funded by the Department of Health and Human Services (HHS), and implemented by the IRS.

What does this mean for you?

Health insurance saves lives.

For workers’ comp, the implications are clear – workers who have health insurance are likely to be healthier than those without – and therefore more likely to recover from occupational injuries or illnesses.

Aug
9

Amazon, Kaiser, and primary care

Posted by Joe Paduda on Tuesday, August 9th, 2022 | Comments

Two seemingly-unrelated new items hit my news feed – Kaiser Permanente lost over a billion dollars last quarter, and Amazon paid $3.9 billion to buy One Medical, a primary care company.

Amazon is betting it can make primary care “work”, yet one of the best healthcare systems hasn’t been able to translate excellent primary care into lower costs.

Reality is, in the US primary care is (mostly) a money-loser.

One Medical, Amazon’s new purchase, has consistently lost money – a lot of money. That’s because reimbursement for primary care remains pretty low – despite Medicare’s move to increase pay.

We spend twice as much on healthcare as other developed countries, yet our outcomes, well…suck. One driver is likely access to primary care:

  • High income countries spend 2 to 3 times more on primary care services than we do; United States as a proportion of their (14% of total health care expenditures vs. the US’ 5% to 8%)
  • In those other countries primary care providers (PCPs) account for a substantially higher proportion of all practicing physicians; almost half of French physicians and a quarter of docs in the UK are PCPs compared to just one out of 8 in the United States.
  • that last data point may be due to pay; family practice docs make less than half what orthopedic docs do.

Good primary care saves big bucks by reducing the need for specialty care – an economic impact that isn’t reflected in primary care reimbursement in the US. At least not in most reimbursement schemes; risk-taking, ACOs, risk share, and other variations are among the models that attempt to reward PCPs for effectively managing patient health.

Amazon’s move to buy One Medical comes on the heels of lots of other investments in primary care; what’s notable is how few have resulted in profits.

Can Amazon “fix” primary care?

Well, they’ll  have to be a lot better than Kaiser Permanente.

KP is one of – if not the best – health care systems in the world, with excellent primary care and provider compensation that better reflects the value of primary care.

Yet KP lost over a billion dollars last quarter – and over $2 billion for the first half of 2022. Yes, a big chunk of the Q2 loss was due to investments, and there are extraneous factors – COVID-related mostly; Kaiser also has to pay orthopedic surgeons and other specialists a lot (increasing KP’s overall cost of care) because those docs could make much more outside KP.

Still, when one considers that Kaiser Permanente’s operating margins are generally pretty thin and certainly KP is less profitable than other health plans (UnitedHealth Group’s Q2 profits were up 19%) it shows just how difficult it is to make primary care “pay.”

What does this mean for you?

Pay more for primary care. 

Joe Paduda is the principal of Health Strategy Associates

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