Jan
26

HealthWonkReview’s Inauguration Edition

Through election after election, HealthWonkReview has been your go-to source for the real impact on healthcare, health policy, access, coverage, and the rest of the story about the industry that accounts for one-sixth of our nation’s economy.

In preparing this edition, I was struck by how much better these blog posts were than pretty much any articles in the mass media (with a couple notable exceptions.).

The depth, understanding of core issues, knowledge of how various parts of ACA interact, and ability of the authors to explain all this in words everyone can understand is impressive indeed.

Louise Norris, Roy Poses, Andrew Sprung, David Harlow, David Williams – these are the folks you need to be following.

Repeal…

Andrew Sprung’s contribution is a welcome list of 7 ways the GOP could blow up ACA gains.  Or maybe not.

Andrew describes various paths to repeal and replace, dissects the problems, perils and promise of each, and handicaps the odds.  It’s a very, very insightful read.

Tick, tock…Louise Norris just keeps getting better and better; as a small-business insurance broker she is on the front lines AND understands the core issues affecting ACA and health policy.  Her entry this month discusses the Republicans’ plan to have legislation ready tomorrow – yes, January 27 – to begin the repeal process. 

A bit of background on the trump Executive Order that required the January 27 legislation comes from the estimable David Harlow.  A quick read, and a valuable one.

Friend and colleague Bob Laszewski’s wondering if the trump administration is prepping for it’s own “if you like your insurance you can keep it” fiasco.  In a great companion piece to the Norris and Harlow reportage, Bob asks a question the current administration likely didn’t:

if you take this new executive order to its logical conclusion, doing things like killing or easing the individual mandate or allowing for cheaper medically underwritten plans can’t have any effect other than making an already fragile Obamacare risk pool worse. Making the pool worse can only lead to fewer consumer choices, or no choices, or higher rates and bigger out-of-pocket expenses for those who remain in the Obamacare risk pool.

My entry this month compares the Republican position on repeal and replace to Wile E Coyote’s headlong charge off the cliff.  Beyond repeal and into replace, things could get pretty interesting – as Mr Coyote learns every episode, it’s not the fall that hurts, it’s the reality of the landing.

As I see it there are two main issues:

  1. Repeal without replacement is a budgetary and political minefield.
  2. Congressional Republicans aren’t even close to agreeing on what a replacement bill would look like

One of the big changes might be block grants for Medicaid – where the Feds just give each state a chunk of money and the state gets more flexibility in how they spend it.  There’s a LOT of detail around this, but at least in Massachusetts, it may not be much of an issue.  David Williams posits that MA is in a pretty different place than most states, one where a full-on total repeal of ACA wouldn’t be a big deal.  That’s because Mass has been in the forefront of these changes, and things are working pretty well.

Federal changes…

OSHA is going to be a different animal altogether in the new administration; perhaps more akin to a cuddly panda than a persistent bloodhound. Julie Ferguson details how the agency is already shifting to a more “employer-friendly” mode.

Julie’s post also digs into the administration’s claim of a “dramatic expansion of the federal workforce in recent years.” and resulting hiring freeze and consequences thereof; quoting a source that finds there has been no federal workforce expansion and that “employment by the federal government as share of all US employment is relatively low compared to most of the last 70 years.”

That’s a fact, not an “alternative fact”, or what we would call a “lie”.

Peter Thiel is the focus of Roy Poses’ ire this month, and that ire is well-placed.  The trump advisor supported one “Jim O’Neill, one of Mr Theil’s business associates, for this position [of head of the FDA], despite Mr O’Neill’s apparent complete lack of experience or training in medicine, health care, public health, or biomedical research, and Mr O’Neill’s obvious conflicts of interest.”

Other news of note

Brad Flansbaum’s penned a piece on healthcare CFO and CEO ratings at The Hospital Leader. Interesting take on how administrators – who currently are not being “rated” – perhaps should be. Brad provides his views on a few evaluation standards; good to see the proverbial shoe being placed on another foot!

And the ever-wonderful Hank Stern informs us that healthcare inflation is not limited to this side of either pond; costs are going up in other countries too – driven there by a demand for private care.


Jan
25

Michelle Buckman – one of work comp’s good people

Ok, I’m biased. But there’s no question Michelle Buckman is one of the really good – and very talented – people in the industry.

Not only is Michelle a fellow Syracuse University grad, she’s also COO at MedRisk, a long-time HSA consulting client.

Michelle started out in MedRisk’s marketing department before she moved into operations. That’s where she made her mark – and continues to do so. A little history is needed here.

Responding to customer concerns, MedRisk decided to internalize ALL customer-facing functions just after Michele joined the company. While Michelle, a graduate of Syracuse’ famed Newhouse School of Public Communications, didn’t have much in the way of formal business training, she most certainly understood interpersonal relations and communications. She put that expertise to good use, building a department with 165 highly trained and very motivated college graduates focused solely on helping each and every patient, provider, employer, adjuster, and case manager they work with. (Lots more detail on this here.)

Michelle worked very closely with IT under Vic Pytleski to develop applications, programs, and technology that would enable quick access to lots of information – and a way to report and monitor activity critical to continually improving results.

Regrettable Turnover (losing people you’d like to keep) among MedRisk’s Customer Advocates is 9 percent annually.

9 percent.

After the Customer Advocacy Program went into effect, duration of PT care decreased 15 percent.

Michelle and her colleagues have built a department staffed with highly trained, well paid, happy employees doing a really good job and materially improving results.

And all these folks are located here – in Pennsylvania, to be precise. Instead of “keeping expenses low” by outsourcing or offshoring jobs, Michelle et al viewed this from the customer’s perspective.  By approaching it from that angle, they were able to focus on what’s most important to any company – serving each and every customer as well as you possibly can.

The focus is NOT on “how can we squeeze another nickel out of operations?” but rather “what can we do better to make our customers’ lives easier and our patients healthier?”

That focus was the easy part. The hard part is to operationalize it, to make it real, to keep that tight focus, to recruit, train, incentivize, motivate, measure, and manage the people who make it work. It’s easy for consultants (and I am one) to talk about what organizations need to do.

It’s a whole different thing to actually do it – and not only keep it going year after year, but to continue improving.

What does this mean for you?

What’s really needed is not a degree or experience or training, it is a deep understanding of what’s important, and the passion and dedication and persistence to deliver.


Jan
24

Justice gets closer for John Plotkin

Former CEO John Plotkin should not have been fired by SAIF, Oregon’s state workers’ comp fund.  That’s the ruling by a Marion County Oregon Judge, and led to SAIF’s Board of Directors offering Plotkin $1.7 million as a settlement.

It isn’t clear if Plotkin has agreed to the settlement offer; published reports do not confirm his assent.

Judge Claudia Burton’s ruling requires SAIF to give Plotkin his job back – but SAIF already has a CEO, and the Board appears extremely reluctant to return Plotkin to the corner office.

SAIF’s summary firing of Plotkin was not only illegal, it was grossly unfair to Plotkin, SAIF employees, SAIF policyholders, and the taxpayers of Oregon.  The evidence clearly shows – and the Judge agreed – that his firing was motivated by SAIF’s internal politics, the ambitions of Board members, and not by anything Plotkin did or didn’t do.

No, the case against Plotkin was fabricated, comprised of misquotes, misattributions, and outright lies on the part of his antagonists. The Board’s conduct was appalling at best.

I won’t restate the many issues with the Board, the history of this disgusting affair, or the damage this has done to employee morale at SAIF; Bob Wilson has masterfully documented this case. I encourage you to read his view on SAIF’s offer.

What does this mean for you?

Justice can be done, but Plotkin’s case demonstrates it can require a lot of money, an ocean of resolve and patience, and a lot of vocal support from other stakeholders.

 

 


Jan
23

Monday catch-up – management moves in work comp services

Just when you think things are calming down in the work comp world, you get a week like last week.

Leading off, management changes.

First, sources indicated occupational clinic company US Healthworks laid off a sixth of its management staff, most in headquarters state California. This comes just six months after the company announced a major expansion in the Southeast with the acquisition of Lakeside Occupational Medicine Clinics.

The Lakeside deal followed a series of clinic acquisitions in other states over the last few years.

Acquired by healthcare giant Dignity Health for $455 million in 2012,word from these sources is USHW has not produced the desired financial results of late.

Couple major management changes in the work comp Pharmacy Benefit Management business.

OptumRx CEO Emry Sisson will be departing effective March 1, 2017.  Emry took the role after the Helios/Catamaran/Optum entities were combined; prior to that he shared the CEO slot at Progressive Medical and third-party biller Third Party Solutions with Tommy Young (Tommy left after the Optum acquisition).

Optum parent United Healthcare will be looking inside and out for a replacement. Knowledgeable sources within Optum indicate this was solely Emry’s decision and in no way driven by United or Optum.

Mitchell Pharmacy Solutions’ Brian Anderson will also be moving on; I’ve known Brian for over a decade and he is one of the most forward-thinking, innovative people in the industry.  He helped start the third-party billing business, so I do hold that against him :). Haven’t heard of a replacement yet and will let you know when I do.

Coventry Work Comp Services business is said to be coming back on the market.  Word is the “book” will be not be released until parent Aetna’s acquisition of Humana is resolved.

That may well take a while…

Evidently this was the subject of much speculation at the JPMorgan Healthcare conference last week.  Key to any transaction will be the status of Coventry’s provider network contract.  Industry followers will recall Aetna’s first attempt to sell the business ended rather abruptly when potential buyers’ bids were much lower than expected due to concern about Coventry provider network contracts.

Word is the vast majority of those contracts – and especially those with providers who have a lot of Coventry business – have been transferred to “Coventry paper”. This should make the company much more attractive.

Conflicting reports on whether Aetna will bundle all component parts or pursue a different path.

Finally, registration for NCCI’s Annual Issues Symposium is open, and AMCOMP’s annual meeting is set for mid-March in Las Vegas.  Agenda is here.


Jan
20

Finally.

New Hampshire and the Feds are going after opioid manufacturers with a vengeance.

NH State law enforcement has reached a $3.2 million settlement with fentanyl drug manufacturer Insys and is pursuing investigations against Purdue Pharma, Actavis Pharma, Janssen Pharmaceuticals and Teva Pharmaceuticals.

The FBI indicted six senior Insys executives last month on charges of racketeering.

And actions have been taken against the company’s sales force and/or prescribers in several other states as well.

Insys’ Subsys fentanyl drug was narrowly approved by the FDA for breakthrough cancer pain. In what has become an only-too-successful marketing strategy, allegedly Insys aggressively promoted Subsys for non-cancer treatment purposes.  Reports indicate only 1 percent of Subsys scripts in New Hampshire were written by cancer doctors.

The Granite State has the highest death rate from fentanyl overdose in the nation.

A Physicians’ Assistant in New Hampshire was allegedly paid speaking fees as a backdoor way of incentivizing him to prescribe Insys’ Subsys(r) a version of opioid fentanyl.

Reports indicate of the 100,000 doses consumed in NH, this one PA, Christopher Clough, prescribed 84% of them.

What happened in New Hampshire is directly related to Insys’ marketing practices.  Make no mistake, this was all about profits, regardless of the damage to patients, families, society, kids.

This from the NYTimes:

“As Subsys grows more mature, we expect the number of experienced patients to grow,” Michael E. Faerm, an analyst for Wells Fargo, wrote last year in a note to investors. “As the experienced patients titrate higher, the average dose per prescription should increase.”

The former Insys sales representatives said they were paid more for selling higher doses…

What a great business. A highly addictive drug creates more revenue for the manufacturer and for sales reps as patients need more and more and more to get “relief” – or get high.

New Hampshire has subpoenaed other large opioid manufacturers who have refused to comply with the demand to provide materials. It’s highly likely Purdue, Teva et al will be compelled to comply when higher courts rule.

What does this mean for you?

A bittersweet moment indeed, but at long last corporate crooks are being criminally charged for their actions that killed people to create profits.

Here’s hoping they are convicted and sentenced to long terms at awful places.

 


Jan
19

Beware of “astroturf”

As “Astroturf group” is one that looks like a “grassroots” organization that is actually founded, funded, and an advocate for a large organization.

Big pharma is infamous for the practice; one great example is the American Pain Foundation, an opioid-peddling outfit masquerading as a patient advocacy organization (thanks to WCC’s Elaine Goodman for the reminder).  The APF was shut down after an expose by ProPublica’s Charley Ornstein and Tracy Weber.

The APF is instructive.  90% of its funding came from big pharma and medical device companies.

Endo, J&J, and Purdue Pharma of OxyContin fame were major backers.  This is the same Purdue that pleaded guilty to federal criminal charges in 2007.  Sadly no Purdue executives went to prison despite thousands of deaths and millions of addicts from opioid over-prescribing.

And ruined communities – this was once a trailer occupied by a heroin dealer in Kentucky. (Credit HuffPo)

burnt-house-64a18ea387dc25ab789335b313810e57

APF got both the Joint Commission – THE healthcare facility accreditation organization – and the Federation of State Medical Boards – to send letters and publish “guides” and other materials promoting pain as the “Fifth Vital Sign”, a brilliant marketing ploy that required physicians to ask about – and treat – pain.

Their reach extended into the Veterans Administration and hundreds of other organizations. The Fifth Vital Sign campaign, backed almost exclusively by opioid manufacturers, created the opioid disaster we are living thru.

This is not yesterday’s news it’s happening today.  In many state capitals the opioid industry remains a powerful and insidious force promoting opioid use.

The damage done is incalculable – hundreds of thousands of dead people, millions of addicts, destroyed families, devastated communities.

montvilleopioidvigil

Why discuss this now?  Because big business is ascendant.  With the incoming administration focused on reducing regulations and oversight across pretty much every industry we will undoubtedly see Astroturf groups proliferate.

What does this mean for you?

Our families and our towns cannot afford another opioid epidemic.


Jan
18

ACA Deathwatch: the GOP’s “repeal”

If you are confused and frustrated with the Republicans’ moves to repeal and replace ACA, rest assured they are way more frustrated – and more than a little concerned – than you are.

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Here’s what’s going on.

There are two main issues.

  1. Repeal without replacement is a budgetary and political minefield.
  2. Congressional Republicans aren’t even close to agreeing on what a replacement bill would look like

Republicans are working to finalize a bill that would defund major parts of ACA. There is NO consensus among Republicans on the details of this bill – and won’t be until at least January 27 (don’t be surprised if the replacement bill isn’t ready till well after January 27…). This won’t require any Democratic support as it is a budget bill. The GOP will own the bill – and the bill’s repercussions.

Earlier this week the CBO gave us a taste of what a repeal without credible replacement would look like, and that taste was bitter indeed.

  • 18 million would lose health insurance within twelve months
  • Premiums would jump by 20 percent to 25 percent immediately

BTW the CBO’s Director was appointed by Republicans in 2015.

If the GOP moves forward with repeal without a replacement bill – which looks highly likely – it will get hammered by Democrats in what will be reminiscent of the Tea Party’s assault on Democrats during ACA’s passage. Dems will turn the tables on Republicans, and with voters primed to fear losing coverage, the message will resonate.

The GOP’s problem is simple – ACA funding is very complex and cutting funding (which is how Republicans are “repealing” ACA);

  • decreases the number of people with insurance and/or
  • increases state government budget deficits and/or
  • increases the federal deficit and/or
  • hurts Medicare, and/or
  • hurts hospitals, and/or
  • hurts insurers.

There’s intense lobbying going on as device manufacturers, hospitals, governors, insurance companies, the very wealthy and other special interests seek to protect themselves.

While Republicans do have “plans” to replace ACA, they do NOT have consensus on “A plan”.  There’s a plan from HHS Secretary nominee Tom Price, another from Speaker Ryan, other plans based on prior GOP bills, plus lots of ideas from GOP-affiliated think tanks and lobbying groups. Make no mistake, there’s a lot of ideological division among Congressional Republicans.

When the GOP does write a replacement bill, it will be scored by the CBO.  A part of that scoring has to do with the definition of health insurance. Up till now, CBO used the ACA’s definition; now that ACA is going away, it will revert to the previous definition.  Not to get too deep in the weeds here, but that’s NOT good news for the GOP.

The dilemma facing Republicans is simple; there’s no way they can deliver on their promises to ensure people don’t lose coverage, reduce costs, and improve access.

Republicans are about to pull a Wile E Coyote, running full speed off the cliff. Given Democrats’ amazing ability to turn certain victory into crushing defeat by losing the messaging battle, the GOP may make it to the other side unscathed.

What does this mean for you?

The CBO is the key.


Jan
17

ACA Deathwatch – The Impact on Workers’ Comp

With Republicans getting closer to repealing ACA, it’s time to consider how this would impact workers’ compensation.

I’ve discussed the possible impact of ACA here; net is the big increase in the insured/employed population may be at least partially responsible for the flat-to-declining work comp medical costs we’ve seen over the last two years.

There’s also this.  A colleague alerted me to a 2014 RAND study that assessed the potential impact of ACA on liability insurance, including workers’ comp in 2016.

RAND’s main takeaway:

“the ACA is expected to reduce auto and workers’ compensation insurer costs and increase medical professional liability insurer costs by a few percentage points as of 2016.”

The report is fairly complex (a summary is here); here’s what it had to say in bullet points.

  1. RAND estimated work comp costs would be $930 million lower due to ACA.
  2. This reduction is driven by lower fees and other insurance coverage for workers.

“Lower fees” derive from lower fee schedules (we’ve seen this in imaging in CA and FL and facility and surgery in other states) and lower prices due to providers less concerned about indigent care and associated bad debt.

“Other insurance coverage” refers to group health or Medicaid coverage for non-occ conditions, as well as substituting for workers’ comp in some instances.

If ACA is repealed without a simultaneous and credible replacement, we may well see a rise in the number of workers without health insurance. The key issue to track is a cutoff of funding for Medicaid expansion – ACA added about 13 million more employed people to the insured rolls; if they lose coverage they’ll need a different payer to cover their injuries. Bad news for workers’ comp.

There are other issues, but Medicaid is the big one.

What does this mean for you?

Be careful what you wish for.  And be even more careful of hasty and simple solutions to very complex problems.


Jan
13

Friday catch-up

2017 is starting off to be the most interesting/bizarre/entertaining/terrifying year in memory.

As one who tracks the goings-on internationally and in DC with some diligence, it’s been impossible to keep up with the craziness. Here’s my attempt to summarize the week that was.

The one thing you missed – and why you shouldn’t have

Trying out a new mini-post on the most important thing may have missed this week. Today’s it’s UnitedHealthcare’s acquisition of a big outpatient surgical clinic company.

This is important because the giant ($175 billion) healthcare company is investing more in care delivery – likely to better control its “cost of goods sold”.  As vertically integrated healthcare systems (think Kaiser, UPMC) get better at insurance, insurers have to get better at care delivery.

ACA Deathwatch

The reports of ACA’s death appear to have been greatly exaggerated. 

Yes, the Senate passed a bill that is the first step in a repeal process.  But it is ONLY a first step. Without diving too deep into the nerdy details, the bill just instructs Senate Committees to begin drafting a repeal bill and lays out general principles.  But there’s no consensus on when the repeal would take effect, what a replacement would look like, or even how it would be funded.

Things are going to get pretty complicated, especially in the Senate. There’s a lot of concern among Republicans in key leadership positions that quick movement on a bill would lead to a considerable backlash – and major political damage.

For freemarketers and Libertarians, there’s this:

“We did have the government out of the individual market up until 2014 [when most of the ACA provisions went into effect], and we know exactly what happened: There were millions of people who couldn’t get coverage,” Field said.

The ACA created a market that did not exist before — one that insures sick people. Field says it’s a market failure that the industry on its own will not cover the highest-risk customers. “If you want to cover everyone, the government has to do something.”

Town said pushing the government out of the equation will leave many citizens without access to health care.

“If you want to live in that world, so be it,” he said. “But I think we as a society have made the joint decision that having a vast part of a population uninsured and having limited access to health care is not a route that we want to go. Getting rid of the ACA is not going to get rid of the government’s role in health care.” [emphasis added]

Here’s a good summary of some of the issues the Republicans face – and why they are treading carefully…key quote:

The real reason health care premiums and deductibles are so high is that medical care is very expensive in the United Statesfar more costly than it is anywhere else in the world. The United States pays very high prices to doctors and hospitals and drug and device makers, and Americans use a lot of that expensive medical care. [emphasis added]

And here’s why keeping only the popular parts of ACA won’t work.  Alas.

Work comp

The M&A activity level has dropped off considerably – if not precipitously. The WLDI sale – a relatively small transaction – is one of the very few recent deals. Don’t expect activity to ramp up as the industry is:

  • pretty consolidated already, so there are fewer companies available to buy;
  • work comp is a declining industry with negative growth – not very attractive to investors;
  • prices were really high for a long time, and company owners still expect to get paid a lot. Sellers still expect to get those high prices, but…
  • buyers are much more cautious due in large part to the “OneCall Effect” (financial returns haven’t met expectations).

Don’t miss the Rx Drug Abuse Summit – April 17-20 in Atlanta.  It’s the most comprehensive and focused event on the biggest issue in workers’ comp.

Nothing is more important to work comp than the overall economy.  Read this – when you have time – for a solid grounding on what to watch for in 2017.  Spoiler alert – economic growth, which has trended up significantly over 2016, is likely to moderate over the next two years. And watch out for inflation.

 

Finally, for management wonks, here’s a great piece on execution from Harvard Business Review.


Jan
12

Cutting thru the ACA repeal confusion

Today’s HealthWonkReview has a series of posts on:

  • the current status of the ACA repeal process, implications thereof,
  • GOP plans to pass a replacement and
  • Dems’ plan to thwart Reps’ moves to kill ACA
  • insurers’ reactions,
  • providers’ reactions,
  • and what it all means to consumers.

The posts are all briefly summarized and you can click thru for more details…

Then there’s an expose on HHS Secretary nominee Price’s ethical problems from trading stocks in companies affected by legislation he was working on.  Yeccch.

And lots more…

Of course, the posts have citations and backup info.

Thanks thanks thanks to Julie Ferguson for collating all this for your edification!