Physician dispensers are getting desperate

Oh this is getting fun!

Earlier this week WorkCompCentral published a column ostensibly written by a physician attacking me for exposing the dangers, both physical and financial, inherent in physician dispensing of repackaged drugs.  I say ostensibly because the column reads like it was ghost-written by one of the industry’s shills, perhaps one of Ron Sachs’ interns. (Ron’s the guy physician dispensing company AHCS hired to call reporters to tell them they were suing me).

By the way, I LOVED the column.

It was an amazing combination of pronouncements from an arrogant-beyond-belief doctor, with a really nasty and personal attack on me, my motives, and my ethics.

Alas, it was so poorly done, with so many logical fallacies and nonsensical arguments based on nothing more than fact-free opinion that I can’t believe a real doctor actually wrote it.  After all, doctors are supposed to believe in science; you know, research, medical evidence, facts, logic supported by data – those kind of things.  Yet the column didn’t have any of those, instead it was a mishmash of unsupported claims based on “our experience”, and never directly addressed the key issues I raised in my piece, e.g. retail pharmacies have much more complete access to patient data, and docs who dispense don’t.

(btw, a Summit on Physician Dispensing will be held in Boston on February 25/26.  Sponsored by PMSI and Progressive Solutions, the Summit is free of charge and is held the day before WCRI’s annual conference – in the same hotel.  This is an invite-only event; there are a few slots open.  Email me at jpadudaAThealthstrategyassocDOTcom for details.

The ostensible author, one Dr Rafael Miguel, offered not a single shred of evidence to support his claims of better outcomes and enhanced quality of care. When not denigrating pharmacists, mischaracterizing my statements, and accusing me of profiting from defeating physician dispensers (more on that below), Dr Miguel/the intern hid the total lack of data supporting his claims behind the omnipotence of the god in the white coat, as if his title is proof enough and we non-physicians should meekly listen and obey.

You can tell the physician dispensing industry is in desperate straits when they use surrogates to question the motives of their opponents, fabricating reasons why anyone would dare interfere with their ability to suck money out of taxpayers and employers by charging outrageous amounts for the drugs they prescribe – and dispense – to workers’ comp claimants.

That’s known as “diversion”; when you can’t refute a critic, yell really loud about what a bad person they are.

Well, let’s look at Dr Miguel.

Dr Miguel is a dispensing physician using Rx Development Associates.  A quick check of their website reveals frequent mention of one of the key benefits of physician dispensing; additional revenue for the physician.  RxDA also touts how easy it is to sign up and use their system to generate big profits, “without interrupting or burdening staff members.”  That’s in direct conflict with Dr Miguel’s assertion that physicians “must recover the costs and time to provide this service to workers compensation patients.”

Let’s look at Dr Miguel’s scripts.  He’s dispensed fluoxetine, etodolac, omeprazole, and gabapentin, among other meds. One of those scripts, omeprazole, is commonly used for heartburn.  Omeprazole, also known as Prilosec, can be bought over the counter for about a buck a pill; Dr Miguel charged about $10  pill.  That’s not opinion or hyperbole, it’s fact.  Miguel charged about ten times more for the drug than it would have cost over the counter.

Dr Miguel/the intern contends docs can’t buy drugs for the same price retail pharmacies do, and that’s why they have to charge so much more.  Again, he offers no evidence of this.  In fact, if Dr Miguel had tried, he could have found repackaging companies clamoring to sell him drugs at very low prices.

Finally, allow me to address Dr Miguel/the intern’s questioning of my motives, and contention that my efforts to combat physician dispensing are “what can only be described as an attempt to fatten Mr. Padudas personal bottom line.”

  1. As I have noted many times, I am co-owner of CompPharma, an association of workers’ comp PBMs.  It makes no difference (financially) to me if  physician dispensing dies off, explodes, or just stumbles along. I don’t get a nickel more or less.
  2. My public battle with the industry and its advocates has cost me tens of thousands of dollars in legal fees not to mention hundreds of uncompensated hours.
  3. Yes, PBMs will benefit if physician dispensing ends, but I am not a PBM, nor do I own a PBM, nor do I get paid based in any way on their volume of business.
What Miguel/the intern can’t understand is some people just have principles, standards that they live by, ethics that require them to speak out when they see others doing wrong.
And physician dispensing of repackaged drugs is wrong.




Marketing is NOT sales or communications or…

The lack of effective, or even decent, marketing in the work comp services and insurance industry is all but universal.  It is also damaging – to the industry as well as to individual companies.  And it is dumb.

The value of a brand is well-documented;

A brand is build by marketing – which is NOT communications or proposal writing or trade shows or parties at trade shows or trinkets given to adjusters.

Marketing – BIG M MARKETING – is all of those and more.  It starts with defining the value you bring to a specific segment.  It requires a simple and clear statement of that value so that potential buyers understand how it relates to them, and that must resonate.  And it continues from there.

But the purpose of this post is not to provide a primer on marketing or branding, but rather to call attention to the dearth of effective marketing.  My sense is this happens because most leaders just don’t get marketing – they think it is soft, fluff, a waste, a nice-to-have, when in reality it is a have-to-have.  Companies have to stand for something, mean something, and that “something” isn’t what the leader THINKS it is, it is what the market thinks it is.

How do you know if you have effective marketing?  Obviously, or perhaps for some less than obviously, market research.  What do users/buyers/influencers think of your company ?  How do you know?  No, how do you REALLY know?

Objective and well-designed market research.

Allow me to close with an example of what effective marketing can do.

I give you Joe Paduda. (forgive the use of the third-person)

A consultant in the industry, known by a few folks eight years ago, mostly former co-workers and colleagues, Paduda is now quite well-known throughout the industry. He has keynoted the two largest conferences, is a sought-after speaker and expert, almost four thousand people subscribe to his blog, and many seek to curry favor with him, or avoid pissing him off.  His client list is extensive, he does not work cheap, and he regularly turns down projects.

The “Paduda brand” drives success.  Smart, insightful, opinionated, honest, fair, objective with deep understanding of the industry and strong strategic sense.  A tendency to be bleeding-edge (not politically, altho some would disagree, but rather too far in front of trends) and occasionally, and pretty publicly, wrong.

Marketing – via the blog (thank you Julie Ferguson!) and public relations (thank you Helen Knight!) is the driver of my success.

If I can do it, so can you.  All it requires is consistent commitment, a willingness to spend money, and a relentless focus on building and strengthening your brand.

What does this mean for you?

Success – or lack thereof.


A tale of two states – Idaho and Florida

Yesterday came the welcome news that the good – and smart – folk in positions of authority in Idaho have drafted work comp regulations designed to prevent outrageous up-charging for physician-dispensed repackaged drugs.  Approved by both Legislative houses, the rules will shortly go into effect.  Idahoans are fortunate indeed to be in a state where they can proactively prevent a problem by implementing regulations, and don’t have to pass legislation to save taxpayers and employers dollars.

Oh, if that were only the case in Florida.  

Two bills have been introduced by allies of physician dispensers that purport to address the issue.  Both require physician dispensers to pay a $15 “rebate” to employers for each physician dispensed script they bill.  Why, you ask?

They say that physician dispensed drugs’ average bill is only $15 higher than the average retail pharmacy bill, so the $15 covers their higher costs.

They are, of course, lying.

First, physician dispensing companies get docs to dispense by telling them they can make another $50 grand (or more!!) a year giving drugs to work comp claimants.  You can’t make fifty grand if you only make $15 more per script – unless you dispense 3,333 scripts a year…

Second,  physician dispensers almost exclusively dispense generics, which are much cheaper – on a per script basis – than brand drugs. Retail chains sell brands and generics – brands cost over $200 per script. Thus, the claim that physician dispensed drugs only cost $15 more on average than retail is misleading and false on its face; in fact WCRI’s recent report on pharmacy in Florida notes: “physicians were paid 35-60 percent more than pharmacies for the same prescription.”

Of course, it is highly likely that the sponsors received thousands of dollars in contributions from those dispensers, who spent over $3 million in the last election cycle to ensure they could keep sucking money out of taxpayers’ and employers’ wallets to buy jets and fancy Italian sports cars – and generate fat profits to their investors – ABRY Partners being the most visible.

To our friends in Idaho; Yippee-Kai-Yay!

To those in Florida; Illegitimi non carborundum.



In workers’ comp, it’s the tail that’ll kill you

More than 10% of workers comp medical costs are for claims more than 20 years old.

And that percentage may well increase.  That’s the finding from NCCI’s latest research, courtesy of Barry Lipton, John Robertson, and Dan Corro. There are a few striking findings well worth considering:

  • Diseases were the largest contributor to costs, followed by complications from medical care.
  • Drugs (38%), home health, implants/orthotics/prosthetics and other supplies make up 58% of costs compared to 16% of costs for claims less than 20 years after injury.  Notably, the authors predict that drug costs for today’s injuries 20 years out may well account for more than 50% of total spend.
  • About a quarter of drug costs were for opioids – drugs that are not indicated for musculoskeletal conditions.
There is a wealth of information in the report, information that should be carefully considered by any and all payers with a significant number of legacy claims.  And, those payers with claims that look like they may well be around in 20 years.
Here are my top four takeaways.
  1. How new claims are handled has a dramatic effect on where they are in 20 years. The vast majority of those claimants should probably NOT be on opioids; the fact that they are indicates a) they will likely never get off and b) the reason they are not closed is very likely because they are taking opioids.
  2. There are two very different types of home health/DME; the commodity-type for relatively young claims that need a cane crutch or wheelchair for a few days and the legacy claims that need a van, home mods, and nursing assistance forever. Huge implications that are NOT well understood by most vendors and buyers.
  3. Far too many claimants get far too much care in hospitals, when they may well be better served in a less-intensive inpatient facility.  Hospitals LOVE workers’ comp; it is very profitable and there are few controls on length of stay.  Payers would be well-served to figure out how to use less hospital care.
  4. Payers should also carefully examine medical records for patients suffering from complications due to medical care.  Poor medical care, lack of diligence on the part of treating providers, and flat-out malpractice are likely contributing to higher claim costs.
And kudos to NCCI for conducting this research.



Bear mauls stoned worker, judge adds insult to injury.

Let’s start off the week with another warning on the perils of marijuana.  Specifically, if you try to feed grizzly bears while stoned, they may try to eat you.

And that would be a compensable injury.

This actually happened in Montana – thanks to Kristie Wolter for providing the details.

Here’s the scene – at a tourist bear park, a guy ostensibly there as a volunteer – but getting paid – goes into a bear pen with food and gets mauled, escaping only by crawling under the electric fence.  Goes to hospital, then files a WC claim.  Park owner says the guy’s a volunteer so no WC, guy gets lawyer, goes to court, and judge renders opinion.

Which says, in part:

“[Bear park owner] Kilpatrick’s testimony that he gave Hopkins money on multiple occasions, “out of my heart” coincidentally while Hopkins was performing “favors” for Kilpatrick at the bear park is not credible. There is a term of art used to describe the regular exchange of money for favors – it is called “employment.” [emphasis added]

Further, Kilpatrick asserted that Hopkins’ decision to get stoned was a/the major contributor to Hopkins’ injury.

Again, the judge:

“Hopkins admitted to smoking marijuana before arriving at work on the morning of the attack, I cannot conclude based on the evidence before me that the major contributing cause of the grizzly bear attack was anything other than the grizzly. It is not as if this attack occurred when Hopkins inexplicably wandered into the grizzly pen while searching for the nearest White Castle. [emphasis added] Hopkins was attacked while performing a job Kilpatrick had paid him to do – feeding grizzly bears. The fact that the grizzly attacked Hopkins while he was performing this job is not exactly a “man bites dog” event. When a grizzly bear is sighted on a trail in Glacier National Park, the trail is closed to all hikers, not just the hikers who may have recently smoked marijuana. Kilpatrick installed multiple electrified fence lines at the bear park to separate the grizzly bears from all customers, not just the customers who may have recently smoked marijuana. When it comes to attacking humans, grizzlies are equal opportunity maulers; attacking without regard to race, creed, ethnicity, or marijuana usage. Hopkins’ use of marijuana to kick off a day of working around grizzly bears was ill- advised to say the least and mind-bogglingly stupid to say the most. [emphasis added]

And there you have it.  Our workers’ comp system protects even the mind-bogglingly stupid.  

One can only hope Mr Hopkins protects his progeny from similar disasters by not having any.


The inaugural edition of Health Wonk Review

Health Affairs hosts this fortnight’s edition of Health Wonk Review, and does it with their usual  thorough style.  Host Chris Fleming’s put together the best o’ the blogs on health care costs and drivers thereof; presents an alternative view of the nursing “shortage” (hint:  there won’t be one); and digs into Louise’ discussion of the merits of charging smokers more for health insurance.

All the best of the blogging world, brought to you each bi-week by your buds at HWR!


Medical marijuana and workers’ comp. Seriously?

I was chatting with Jennifer Wolf-Horesjh, Executive Director of IAIABC, this morning when the conversation turned to medical marijuana in workers comp.  I have no idea how we ended up there, but Jennifer is a great conversationalist and very well informed about everything work comp-related, so she’s on top of the issue (and pretty much everything else).

As luck would have it, IAIABC just completed a survey of states’ positions on work comp and medical marijuana.  A couple states have specifically banned the use of medical marijuana in worker’s comp treatment (Montana and Vermont), while others have administrative restrictions/requirements in place. Others allow it.  (Jennifer also told me about a recent court case wherein an insurer was required to pay for the marijuana growing equipment used by a claimant; if anyone has a record of that send it over and I’ll update the post. )

So, here’s the deal.  What logic would one use to approve the use of medical marijuana in workers’ comp?  There’s very little evidence that it is beneficial for most conditions for most people, although some anecdotal evidence that it works for a few. But just because a (very) few find relief from cannabis does not make it a viable medication – and one employers should be paying for – without careful scrutiny and ample evidence that it works for a specific claimant.

Alas, logic and workers’ comp aren’t often used in the same paragraph, so perhaps this is just another indication of how screwed up WC is.  As if we needed one.

There’s an excellent white paper on the topic from PBM myMatrixx as well as a webinar for your edification.  PMSI’s Jay Krueger has also authored a paper on the subject, and WorkCompInsider was an early reporter on the subject as well.  Oh, and in case you think you’ve heard it all, read Jon Coppelman’s piece on an idiot who a) got stoned and b) then went to feed bears in an animal park.


Flu season and Tamiflu – which one’s more hyped?

It’s full-on panic mode; flu season is upon us, the media’s in a frenzy, and the world is coming to an end.  If you didn’t get your shot, you’re going to be in serious trouble, laid up for weeks with a nasty case of the horribles if not stuck in a hospital ER with tubes dangling from your appendages.

To listen/watch the media, you’d think the Mayans were right about the end of the world, if not precise with the timing or cause of earth’s demise. Then again, this is what (much of) the media does – generate eyeballs/ears by getting us all excited about something or other.  Now that the most recent fiscal crisis is a distant memory, there’s got to be something to get us riled up – so flu it is.

Unfortunately the sensationalism isn’t limited to the illness itself; the enthusiasm for Tamiflu, the equivalent of the mining-after pill for flu sufferers, is similarly hyped.

Through a combination of carefully-orchestrated clinical trials, precisely-written journal articles, and professionally-managed media placement, the makers of Tamiflu have been able to convince many of the drug’s powerful ability to moderate the effects and shorten the duration of the illness. Sounds like a no-brainer, except…

Except the reality is nowhere near as encouraging.  Turns out Tamiflu actually only shortens duration by a day or so, and while it can moderate the worst of the symptoms, isn’t going to get you up and going in no time.  Here’s what the Cochrane Collaboration, perhaps the world’s leading analysts of medical research and intervention concluded after reviewing the research behind Tamiflu:

1. The manufacturer of the drug sponsored all the trials and the reviewers found evidence of publication and reporting biases.

2. The studies did not show that Tamiflu (oseltamivir) reduced the risk of hospitalization.

3. The studies were inadequate to determine the effect of Tamiflu (oseltamivir) on complications.

4. The studies were inadequate to determine if Tamiflu (oseltamivir)  reduced transmission of the virus.

5. The use of Tamiflu (oseltamivir) did reduce the duration of symptoms by about a day.

I bring this to your attention, dear reader, not to scare you even more, but rather to encourage you to learn more about medical miracles/drugs/treatments before signing up.  If you don’t, you may well find yourself poorer, just as sick, and perhaps with a few side effects you hadn’t counted on.

Thanks to Gary Schwitzer at Health News Review for the tip; his blog is a must-read for those seeking the real story behind the mass media’s health hype of the moment.


Predictions for health care in 2013

There’s going to be more change in health care this year than in any year in memory.  Here’s what I see coming.

1.  Most states will expand Medicaid.

Despite their protestations to the contrary, governors – even those in redder-than-red states – will accept the federal dollars and expand Medicaid.  The pressure from hospitals and providers will be overwhelming. Expect all but a relative handful to bow to that pressure and take the money.

2.  There will be a lot more M&A at the highest levels – among providers, health care systems, and payers.

Expect the big to get much, much bigger.  They have to – the need for cash to fund innovation and change demands it, and smaller organizations just don’t have enough resources to meet the needs.  Anthem, Aetna, UnitedHealthcare, Express Scripts, Yale-New Haven Hospital, St Luke’s in Boise, CIGNA, Wellpoint; all are actively and aggressively looking to grow through acquisition.

3.  Many more docs will be employed by hospitals by 1/1/2014.

About a third of all physicians are currently working for hospitals/health systems today.  Many more will be in 12 months.  The pace of consolidation is accelerating, driven by the new focus on Accountable Care Organizations, a desperate need to strip out cost, and increasing expenses associated with independent practice.  I’d expect another 5% of docs will be employed by health systems by the end of 2013. 

 4.  Congress will not fix Medicare physician reimbursement

It will add too much to the deficit, plus they are stuck between the rock (really mad physicians) and the hard place (need to cut entitlements) so Congress will do what they do  Oh so well; punt.

5.  The feds and CMS will get even more aggressive on Medicare and Medicaid fraud.

CMS, the FBI, and various other governmental entities have greatly expanded efforts to combat fraud related to Medicare, Medicaid, and other federal health programs over the last few years – ranging from relatively small cases to medium-sized actions to mega-busts. Total in 2012 was about $3 billion; expect a substantial increase in 2013.

We’ll revisit at the end of the year to see how I did.