Heading to New Orleans..

It’s the annual gathering of the work comp tribes time.  This year the National Work Comp and Disability Conference is in New Orleans, and I’m really looking forward to the great food, wonderful music, and Southern hospitality. As I’m sure many of you are.

I’m honored to be speaking twice – Thursday morning’s a discussion of chronic pain guidelines with Steven Feinberg MD.  Steve is compassionate, very knowledgeable, and highly experienced and I’ve learned much from him. Thursday afternoon is the Bloggers’ Panel; get there early as this session is always well-attended.  Any bets on how long before I get grief over the election results from Bob Wilson? (Bob was right and I was wrong in our predictions)

A couple years back I listed a few recommendations based on my far-too-many-years attending work comp conferences.

1.  Realize you can’t be everywhere and do everything. Prioritize.

2.  Leave time for last-minute meetings and the inevitable chance encounters with old friends and colleagues.

3.  Unless you have a photographic memory, use your smartphone to take voice notes from each meeting – right after you’re done.  Otherwise they’ll all run together and you’ll never remember what you committed to.

4.  Introduce yourself to a dozen people you’ve never met.  This business is all about relationships and networking, and no better place to do that than this conference.

5.  Wear comfortable shoes, get your exercise in, and be professional and polished.  It’s a long three days, and you’re always ‘on’.

6. Finally, what happens in New Orleans gets posted on Instagram.  Don’t be stupid. Like these guys. Alcohol is not your friend, and this is not spring break.

Travel pleasantly!

The future of Managed Care Matters

MCM has been up and running for more than a dozen years, over 3,000 posts, and multiple iterations. We average about 1400 visitors each day we post.

It’s time to review what we do and see what needs to change.

Not to worry (or cheer, depending on your view) It’s not going away.  Nope, we’re going to continue doing what we do – reporting what we think is important; calling out the bad actors; applauding the good folks; digging into the details; and challenging you, dear reader, to think more deeply.

This is more important now than ever.

The American health care system  – patients, providers, payers, suppliers, intermediaries – accounts for one out of every six dollars in our economy.  17 percent plus of our GDP. Almost three trillion dollars. Likely 20 million + jobs, many of them well-paid.

As we’ve seen with ACA, changing this “system” is wrenching indeed. It’s incredibly politically charged, stupidly expensive, delivers poor results for what we pay, brutally hard to explain, and stuffed with great reasons to not change. Oh, and there are more lobbyists focused on pharma, medical devices, insurance, providers and health systems than for everything else combined (I kinda guessed at that last one, but it’s likely true).

After the most bizarre and unpredictable election in memory, it’s now the Republicans’ turn.  Reforming 1/6th of the nation’s economy is challenging indeed, and we all hope they get it right, as there is so much at stake.

For my work comp readers, we’re used to being the flea on the tail of the elephant. When you buy just 1.25% of all the health care services in the country, you get used to being whipped around and having almost no ability to choose where you go.

Make no mistake, the “reform of health reform” will dramatically affect workers comp.

Here’s what’s happening at MCM.

  1. All comments will be moderated.  After a raft of nasty comments from a very few posters it’s no longer advisable to let comments go “live” without moderation.
  2. We’re adding a new category – Health reform’s impact on worker’s comp. You can see those categories on the right side of the home page, where all posts are neatly categorized. Just click on the one you want and voila!
  3. As always, courteous, intelligent, and fact-based disagreement is welcome. If you want to take issue with a post or specific content cite primary sources to back up your statements and claims. Unsupported rants will not be posted.
  4. Anonymous comments may or may not be posted.  You know who I am, it’s only fair I – and other readers – know who you are.

In January, we’re launching a periodic podcast which will focus on key issues, update you on deals and transactions, provide context on health reform, and answer your questions.  Will keep you updated on that – it’s been a long time in coming!

 

 

 

Getting serious about health reform, part two – Medicare

As the GOP goes about repealing and replacing ACA, they’ll have to carefully consider how  Medicare will be affected, because it absolutely will be.

Briefly, reimbursement, senior drug benefits, hospital funding, and private Medicare Advantage programs were all altered by passage of ACA. Outright repeal of ACA will, according to most experts, result in higher Medicare costs in the future.

The GOP will have to walk a very narrow and tortuous path between increasing the deficit, something unacceptable to many legislators, and reducing benefits thereby angering its key constituency – seniors.

Not only did ACA make substantive and far-reaching changes to Medicare, but Medicare, Medicaid, group health and individual coverage are all inextricably linked. Reimbursement mechanisms and drivers, systems connectivity and protocols, coverage determinations and benefit design are related to, and influenced by, other payment sources.

Among the changes ACA made to Medicare are:

  • transition from strict fee for service to value-based purchasing
  • close the drug benefit’s “donut hole” (big out of pocket costs for recipients)
  • restrain increases in Medicare Advantage premium increases until the MA programs’ performance is on par with Medicare
  • fund ongoing and much-needed research

There’s been little detail from the incoming administration about future plans, however Speaker Paul Ryan’s “A Better Way” has a plan to address Medicare. It relies on privatization.  While Ryan’s website is outdated (still referring to the SGR), the “A Better Way” Plan, and recent press statements, provide some details on Ryan’s thinking about “repeal and replace”.

Before we jump into that, a word about ACA’s impact on Medicare. If ACA is repealed, there will be financial fallout for Medicare. In fact, as currently implemented, ACA’s passage has helped Medicare‘s viability.

Per Fact Check;

The law [ACA] both expanded Medicare fundingadding a 0.9 percent tax on earnings above $200,000 for single taxpayers or $250,000 for married couples — and cut the growth of future spending…The trustees’ 2010 report estimated that the ACA had added 12 years to the life of the Part A trust fund.” [emphasis added]

ACA also reduced some reimbursement (payments for imaging is one example), which many Republicans defined as “cutting” Medicare. That played well with seniors then, as most were highly protective of the system they’d been paying into for decades.

So, if ACA is repealed in its entirety, Medicare’s costs are going up.

Ryan’s solution

While there’s little in Pres. Elect Trump’s platform addressing Medicare, other GOP stalwarts have weighed To his credit, Speaker Ryan wants to improve Medicare’s future financial position; he proposes to do so by:

  1. Raising the eligibility age to 67 by 2020, and
  2. Dumping the current CMS-run system in favor of giving seniors vouchers they will use to buy coverage from private insurers. (currently private insurers administer the Medicare program under contract from CMS)

Financially, baby boomers MAY come out OK on the second point (except for those of us who are going to have to rely on the post-ACA private insurance market for two more years). But the Millennials and Gen Exers may well be looking at higher out-of-pocket costs if elected officials decide Medicare vouchers are just too expensive.

However, all seniors would be affected by a privatization of Medicare, and therein lies (one of) the issues.  Medicare is almost universally well-regarded and jealously guarded by seniors

  • 77% of seniors say Medicare is “very important” (that’s higher than the military)
  • more than 2/3rds say Medicare needs to make some changes to remain viable – but the overwhelming favorite “change” (87%) is for the Feds to negotiate drug prices
  • 75% of Medicare recipients believe it is working well

Most telling for Speaker Ryan, only a quarter of respondents thought Medicare should switch to the key plank of the Ryan plan – premium supports.

Reports indicate the GOP is going to move aggressively on repealing ACA and replacing it with something else.  Given the demographics of Trump/GOP voters (mostly older), their favorable views of today’s Medicare, and their lack of enthusiasm for higher premiums or cost share, this is going to be quite the challenge.

It will also be a clear indicator of how serious the GOP is about “reform”.

What does this mean for you?

The first 100 days are going to be quite interesting- watch for the battle between those focused on their core constituency and those seeking to fundamentally change health care.

 

 

Getting serious about health reform, part one

Selling health insurance across state lines is one of the central planks of the GOP’s plan to replace ACA.  Intended to foster competition and reduce costs, the idea is the more insurers competing for customers, the lower the price and better the product. And by eliminating the requirement that insurers comply with state mandates, costs would be lower because some services, conditions, and treatments would not be covered

In addition to these issues there is one real example that should sharpen our thinking.

Today three states allow citizens to buy insurance offered by out-of-state insurers. Maine, Wyoming, and Georgia have all allowed this for over a year, yet no out-of-state insurers are offering plans in those states.

the question is why?

Folks advocating this idea base their view that selling coverage across state lines will reduce costs by eliminating mandated benefits, which some think would reduce costs 30-50 percent.

That view reflects a lack of understanding of the cost drivers in health insurance, the primary driver being – you guessed it – the cost of medical care.  While mandates do influence costs, the underlying cost of insurance is the cost of care. And health care just costs more in Portland Maine than it does in Boise Idaho

There’s another concern that hasn’t been broached, perhaps because it is politically charged. States have significany regulatory authority over benefit design and mandates. Allowing the sale of non-compliant insurance in a state may well be anathema to those strongly supporting state sovereignty.

 

 

Telerehab’s coming fast

Regardless of what happens to health reform on the national level, the healthcare industry is relentlessly and rapidly adopting technology that will revolutionize patient care.  Big players are seeking out new tech devices, platforms, and applications, buying start-ups and rapidly pushing their products and services into their distribution pipeline.

One example is Zimmer’s recent acquisition of RespondWell, a start-up delivering comprehensive at-home telerehab intended to improve patient compliance with PT and deliver better outcomes. I recently interviewed RespondWell CEO Ted Spooner.  Spooner has a long history in developing tech that delivers services faster/better/cheaper with far less human intervention.  He and his team have taken that experience and used it to build a home-based rehab solution.

The quick backstory – Medicare and other payers are bundling payments for surgical procedures, forcing providers to assume responsibility for any procedure-related care for 90 days post-surgery. In this model, a health care system might get $37,000 to do a total knee replacement; out of that fee, around $5,000 would go to physical therapy.

But there’s a problem – in some places, there’s more demand for PT than there is supply of PTs.  As a result, some patients are on a waiting list – and as a result of that, surgeons, operating rooms, and related staff are not working to full efficiency.

There’s another issue here, one that gets at an uncomfortable reality – many services can be delivered in ways that don’t require nearly as much human intervention.

Telerehab provider RespondWell has come up with a solution, one that uses existing technology, platforms, and communications to “create accessibility and convenience for therapy to patients and give providers visibility to patients to adherence to therapy. Kaiser is one of the early adopters of the Therapy@Home solution.  To date almost all customers are healthcare providers, but Spooner expects payers to be in the mix quickly.

Briefly, Therapy@Home is set up for each patient recovering from surgery; the provider prescribes a therapy plan which is “loaded” into the App. The patient sees a web-based on-screen virtual therapist that helps them perform exercises correctly, while allowing the care team to monitor patient performance and compliance via the internet-connected device’s web camera.

Sessions and communications are recorded and stored for provider access if and when needed.

Here’s one key takeaway; about 60% of in-person PT visits can be eliminated using Therapy@Home.

Considering most total knee patients are older folks, I challenged Spooner on adoption and usage by senior citizens.  He noted that the over 55 population is adopting technology very quickly, driven by easy-to-use smartphones and apps that allow them to connect easily with friends and family.

While RespondWell is focusing on bundled payment-driven care today, this technology/service model (I’m not sure exactly how to describe it) is absolutely transferrable to other types of care – both within PT and in other service areas.

What does this mean for you?

Be a disruptor. Or be disrupted.

C’mon, VA, do the right thing!

There are thousands of veterans waiting for the Veterans’ Administration to streamline disability evaluations.  While they wait, the VA dithers.

This has dragged on for more than a year, a year in which the GAO pummelled the VA for failing to comply with its own contracting standards when awarding contracts to a huge defense contractor – Lockheed Martin – that has almost NO experience in disability evaluations.

According to a piece in Politico earlier this year;

the GAO “citing “prejudicial errors” has directed the Department of Veteran Affairs to go back to the drawing board…the office “recommended that the VA reopen negotiations with the offerers, solicit, obtain, and evaluate revised proposals; and make new source selection decisions” [emphasis added]

Oh, and the VA “misled two of the protestors during the conduct of discussions or negotiations.  These errors led the VA to make source selection decisions…that were unreasonable…” [emphasis added].

One of the protesting bidders – Veterans Evaluation Services – published an ad in yesterday’s WSJ calling on Trump to fix this.  Here’s hoping this gets results.  (disclosure – I’ve done work for VES in the past)

And fast, because our veterans have been waiting for far too long.

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Trump and workers’ comp

There’s no question the Republican sweep will hugely affect workers’ comp.

There are nothing BUT questions about what that impact will be.  Here are a few thoughts based on what little we know so far.

The quick take – huge uncertainty; if Trump delivers on his campaign promises, there’s a high likelihood of higher claims frequency and increased medical expenses. 

I preface this by noting Trump is already backing off campaign promises – including repealing “Obamacare”.

The DOL “intervention” in workers comp is dead.  There will be no new National Commission, no federal standards, no study or research or advisory panel. There will be much less emphasis on OSHA enforcement and workplace safety as well.

More jobs?

Energy projects will likely be fast-tracked, although there will be big battles in court as environmental concerns rally to intervene in the only way left open to them – civil suits. Pipelines, coal mines, oil will all see more jobs – although the world economy will have much more to say about that than the White House.

Trump has been touting a trillion dollar investment in infrastructure – anathema to Republicans who don’t want any increase in government spending. Where this will end up is anyone’s guess; if it does go forward, premiums, along with claims costs and medical expenses will rise significantly as these jobs are in high-claim-frequency and high-severity industries.

Trade drives jobs, consumer buying, and inflation. All of which impact work comp.

Trump will label China  – our largest trading partner – a currency manipulator (it’s been keeping the value of the renminbi low to make its exports more attractive). He has to, as that’s a big part of his campaign. BUT it’s going to be a lot of talk and NO action – this is going nowhere, for four simple reasons.

The law requires three conditions to be met for a country to be declared a currency manipulator; China only meets one.

Second, China has been increasing the value of the yuan for months.

Third, consumer demand has been a big part of our economic recovery. If Trump starts a trade war, consumer goods will get a LOT more expensive, driving down consumer purchasing power and consumer confidence. The working class that supported his election would be hurt the most.

Fourth, China owns a shipload of our debt. China can stop – or greatly reduce buying our debt, which will drive up borrowing costs, triggering inflation and more damage to consumer buying power especially for baby boomers who are already living paycheck-to-pacheck.

Oh, and we have a $28 billion surplus in the service sector. If a trade war does start, China will stop sending students here, stop importing movies and music, and its new moneyed class will find other travel destinations.

That said, even the whiff of a trade war will hurt work comp. Inflation will hurt investment returns and lower the value of claim reserves, export jobs will be lost, and the tourism, educational, and cultural industries will suffer as well.

For a brief and helpful summary of Trump and trade, click here.

ACA

Evidence suggests the Affordable Care Act has helped work comp. Work comp medical costs have declined since ACA’s full implementation despite rising employment and middling cost increases in group health. The newly-insured are in higher-frequency jobs.

If Trump rips out ACA “root and branch”, we can expect medical costs to increase and cost- and case-shifting to ramp up significantly.

There’s a lot more to this and we will be tracking it closely.

What does this mean for you?

Given Trump’s already walking back campaign promises, this is just speculation. For now, expect higher premiums, more claims, and higher medical costs.

The election’s impact on health care – experts opine

This is a special post-election edition of Health Wonk Review – we asked our contributors to share their thoughts about how the GOP’s sweep will affect health care, health reform, and the health care system.

I’d like to profusely thank our contributors.  For most, this was a totally unexpected result that no one i know (except Michael Moore, who I don’t “know”) predicted or even considered possible.  Our contributors have focused, dug in, and come up with some terrific insights into implications for health care.

Before we jump in, a couple key data points.

  1. Health care accounts for one-sixth of our GDP.  This is a HUGE, incredibly complex, deeply entrenched business.
  2. Unlike any other part of our economy, health care is unique because it profoundly affects us as individuals.
  3. ACA is MUCH bigger than the Exchanges; only 1 American out of 19 is covered via the Exchanges.

More on what ACA is and is not, and how it has been portrayed in the media from Daniel Dawes at healthinsurance.org.  If you’re up for more fact-checking, Daniel’s got you covered.

David Williams encourages Democrats to go ahead and allow Republicans to repeal ACA. Filibustering such a move, while possible, would delay the death by a thousand cuts from executive action and the budget reconciliation process. That being the case, let ’em at it.

David correctly notes that the GOP’s positions are often directly contradicted by (some of) Trump’s positions, and health care is no exception. He also breaks down the key “policy initiatives”, most of which won’t do anything to bend the cost curve. David concludes that once Trump figures out these initiatives aren’t going to solve the problem, he may well decide to go back to his earlier plans to adopt a Canadian-style system.

We welcome Matthew Holt back to HWR!  Somehow able to write a cogent post while watching election returns (when I was hiding under the covers), Matthew wonders how Trump is going to A) repeal “Obamacare” while ensuring everyone has access to high quality, affordable health care. The middle-aged white folks who supported him expecting he’d “fix” health care are going to be disappointed if he doesn’t deliver…

That, plus the fact that the entire health care system – payers, providers, IT, pharma – have spent six years working to adapt to ACA and there will be an awful mess if there’s a hard stop on Inauguration Day.

Bob Laszewski tells us the GOP does have a written plan, and it’s ready to go.  He also believes the Dems will work with the GOP to replace ACA because there are a lot of Democratic Senators up for election in 2018.

Thanks to Peggy Salvatore for her contribution; she notes that for many voters “Obamacare” may well have been a big reason they pulled the lever for “anyone else”. She also hopes Trump will assemble a team of experts to plan the new health care laws.

Brad Wright notes that while most may think ACA will be repealed, most also thought Clinton would be our next President.  The real question is what will happen to the 20 million + who have coverage due to ACA.

Tim Jost of Health Affairs reminds us that the simplistic statement “repeal Obamacare” is not going to happen.  Most Americans equate the Exchanges with “Obamacare”; ACA is much more than that.  An outright repeal would impact everything from pharmaceutical pricing to biosimilars to Medicare reimbursement to hospital financing; the entire system will grind to a halt if the “replacement” plan isn’t carefully thought out and well planned. 

Given Trump’s wildly inconsistent stances on health care and the low likelihood that the Ryan plan’s policies will do anything to bend the cost curve, I don’t see a solution coming that will make Trump voters happy. 

Thanks to Roy Poses for his post on how the current system is “rigged” to enable companies to sell useless stuff.  The FDA finally caught up with a company shilling its “beads” as a drug delivery tool, when it had been explicitly prohibited from doing just that. Perhaps we need MORE regulatory enforcement, not less.

TrumpCare – initial takes

Okay, time to dig into what this election means for health care.  I’m still working thru how this will affect workers’ comp; my first post next week will focus on that.

To my loyal readers, thanks for your patience while I diverted from health care and work comp and used MCM to discuss the election and its impact on me. For those friends and colleagues who thoughtfully and kindly contributed to the conversation, I deeply appreciate your insights and views. We may not agree and that’s fine as long as we seek to understand.

I’m really working to keep my inner snark under control here, so bear with me folks.

The biggest problem in crystal-balling about the election’s impact on health care is Trump has been all over the place.  He’s advocated for a Canadian-style system, vowed to repeal Obamacare, lauded single-payer, and gone off in other directions enough to convince me he doesn’t have any firm plan.

His party does have a “plan”, at least current Speaker Paul Ryan detailed one earlier this year.  It includes

  • Selling insurance across state lines (an air sandwich if ever there was one),
  • block grants for Medicaid;
  • no mandate but no coverage for pre-existing conditions without continuous coverage;
  • cap employer tax break for health insurance;
  • refundable tax credit for individual purchase of insurance;
  • end the Independent Payment Advisory Board.

Here’s the problem.  Nothing here will reduce the cost of health care. 

The voters who backed the GOP and Trump expect health care costs to come down, insurance to be cheaper, less complicated, and provide better coverage, and the whole system to function better/easier/faster with less hassle.

But mostly they want it to cost less.

These initiatives will not do that.

Reducing cost will require narrower networks (you can’t keep your doctor), lower benefits (what, this isn’t covered?!), price controls (anathema to conservatives) and/or tight utilization control (don’t get between me and my doctor).

Yes, forcing people to buy insurance and not covering pre-existing conditions if they don’t is going to make more people buy insurance and that’s good.  But it’s still unaffordable for many, and they will won’t sign up.

What does this mean for you?

It’s easy to criticize; now that Trump et al own this, they’re going to see just how hard it is to fix health care.

 

 

The optimist’s case for Trump

In an effort to get my head around Trump’s victory, I’ve spoken with several good friends with diametrically opposite political leanings, folks in the demographic that used to be called Northeast Republicans. The conversations have been long, heartfelt, passionate, and courteous. Here’s what I’ve learned.

The depth of disgust for the Obama years is deep.  One very knowledgeable colleague described economic growth under the President as “zero”.  While GDP growth has not been anywhere near as robust as one would like, it has averaged 2.1%. A detailed and dispassionate perspective is here. Job growth has been anemic indeed, labor force participation is low – but improving, while wages have improved markedly – if only recently. And, the last 8 years has also been a time of relatively low growth in world GDP, much lower than it was during the Reagan, GW Bush, and Clinton eras. Tough to grow a very mature economy when our buyers and sellers aren’t growing at all.

The discussions have been wide-ranging but all come back to this sense that the country is somehow on the “wrong track.”

Into this comes Donald Trump, a candidate with a chequered business career, well-documented behavioral issues that would disqualify him from being hired by most employers, is notoriously thin-skinned, and has policy positions that are, at the very least, confusing and ideologically inconsistent. And that’s leaving out the really ugly stuff.

Among his policy ideas/positions/stated plans:

  • building the wall – consistent with GOP orthodoxy
  • renegotiating NAFTA – not consistent
  • declaring China a currency manipulator – not consistent
  • raise the minimum wage – not consistent
  • ramp up fossil fuels – consistent
  • friendship with Putin – not consistent
  • spending a trillion dollars on infrastructure- not consistent
  • reduce taxes on the wealthy – consistent
  • repeal “Obamacare” – consistent
  • climate change is a hoax – consistent
  • add $10 trillion to the debt to accomplish varied goals – not consistent.

Point here is not to get into policy details, but rather to note Trump doesn’t toe the ideological line, rather he jumps back and forth with amazing rapidity.

When I ask my friends why they voted for Trump, it clearly isn’t about policy. Trump’s “policies” are decidedly NOT conservative. They say things like:

  • “I hope he surrounds himself with people smarter than him and listens to them”
  • “he didn’t mean those things, he just says crazy stuff”
  • “the legislature will do most of the policy setting work”
  • “he will get the best SecDef (Secretary of Defense) and he (Trump) will lead from ahead”

I don’t see it.  Trump won by ignoring all experts, by going his own way, by following his own genius. And that has brought him to the most powerful position on the planet. Why would he listen to anyone else?

If anything, these conversations have gotten me even more bewildered. Middle-aged successful intelligent professionals decided to vote for – and support – a candidate with many views directly contrary to theirs, with serious behavioral issues, and with a temperament they acknowledge is highly concerning instead of a pretty ordinary but highly experienced center-left politician with a long reputation for working well with Republicans.

The risk:reward thing is what stumps me.  Trump will have the nuclear codes.  He will have the “trade-war codes”. He has control over foreign policy. All areas with huge risks – some of them existential. Yet none concerning enough that my colleagues didn’t vote for him.

I very much hope my colleagues’ optimism is well-placed.

And very much fear it isn’t.