Friday catch-up

Buried under two projects this week – here’s what crossed my desk while I was trying to do actual work…

First, after the horrific tragedy in Parkland, I recalled this data point – the US has a significantly higher child mortality rate than other developed countries.  Gun violence is a major driver. A child age 15 to 19 in the U.S. is 82 times more likely to die from gun violence than such a child in the other countries.

More than 1500 of our kids die from gun violence every year.

The next time someone blathers on about “American Exceptionalism”, show them this graph.

Big spenders – 

We’ve long known that a few people account for a lot of health care spending. New news indicates this is more true now than ever; 5% of patients accounted for 53% of spending in 2015. What isn’t as well known is there’s a LOT of turnover in that 5%; fully two-thirds of the people in the group this year weren’t big spenders last year.

Consistently High Turnover in the Group of Top Health Care Spenders  Implications abound:

  • high risk pools can’t cover these folks if they can’t predict who they are
  • insurance is needed to protect us from the risk we need high cost services

Drug costs

From Adam Fein, news that the rest of the world is following in the work comp world’s footsteps at least when it comes to moderating drug cost inflation. There’s a lot of great information in Adam’s post, much of which refutes generally accepted wisdom or common knowledge.  One item of note – utilization – the volume of pills – was almost flat last year across all payers.  

Webinar on IME Reports  

Independent medical evaluations (IMEs) are a critical component of workers’ compensation and other disability benefit systems. Unfortunately, IME reports often lack quality, customer satisfaction of the various stakeholders is not measured, and TQM is rarely, if ever, applied to medicolegal and IME work.

On Wednesday, February 21 at 3 pm ET, Noon PT, Christopher R. Brigham, MD , a world-class expert on independent medical evaluations (IMEs), will host a unique, no cost webinar on “IME Reports: Assuring Excellence! ” 

You can register at this link https://zoom.us/webinar/register/WN_PsLc3YHXTRWBU6aq2W9Wsg

Have a safe weekend, and please demand your elected officials stop ignoring the causes of gun violence 

Stone Point buys Genex – again

Case management/bill review/UR/IME company Genex has been re-purchased by Stone Point Capital; Stone Point sold the business to Apax in 2014. Takeaways are:

  • Stone Point really understands workers comp and the WC services business. The company is currently pursuing insurer AmTrust and own or have owned a number of companies involved in workers’ comp including:
    • Cunningham Lindsey
    • Oasis Outsourcing
    • StoneRiver
    • Sedgwick
  • Apax’ divestiture is likely NOT a signal the firm is going to break up or sell off OneCall Care Management. OCCM is deep into a systems conversion intended to tie the disparate businesses it owns together and the company just moved most of it’s home office people into a single location. Perhaps most importantly, OCCM’s debt is still trading well below par, an indication the investment is under water.
  • CEO Peter Madeja and the core of the senior management team will stay on. Peter is one of the finest people I know, universally liked and respected in the work comp community, and he and his team have performed well, keeping Genex growing in a declining market.
  • My guess is Genex will likely keep acquiring related businesses. These could include firms in the IME and MSA space as well as the occasional case management company. Mature markets require participants to grow via acquisition, a strategy Madeja et al have mastered.
  • I’d also expect some much bigger acquisitions. I don’t think Stone Point bought Genex to get into the case management and bill review business; these folks have bigger plans.

A couple of side notes...

Stone Point’s initial investment in Genex back in 2007 was reportedly about $56 million. 

One report indicated a source said that this time around, Genex sold for three times the original equity investment (note Apax paid for Genex with a combination of debt and equity). Without any detail or ability to dig into that, I have no idea if that is accurate or even likely.

 

 

Anything but simple

To the casual observer, the work comp bill review process is pretty simple:

  • make sure the procedure codes are appropriate for the injury,
  • compare the billed codes to the state fee schedule/allowable amount,
  • apply any reimbursement rules, and you’re done.

The real story is far more complex.  It’s no longer just about making sure the claim exists, the body part matches the medical report, and the procedure makes sense for the injury.

Reimbursement has gotten enormously complicated. Coding and code modifiers, bundled payment logic, clinical appropriateness, duplicate identification, relatedness, location of service verification, surgical groupers are just a few of the issues and considerations often unappreciated – and not considered – during the bill review process.

Far from A to B, it looks more like this – and is unique for some bills…

While some will say this is “not new news”, what is new is the constant focus and attention required to stay abreast of the ever-more creative and sophisticated “revenue maximization” industry. (That’s the label for provider-focused efforts to get as many payer dollars as possible)

I’ve taken a close look at several approaches/techniques intended to help payers keep pace with provider billing. One that caught my eye is Equian’s Clinical and Coding Logic. The folks at Equian were kind enough to spend a lot of time educating me on the research behind their Clinical & Coding Logic (CCL) solution, how it is used, and where it can have the most impact.

CCL has it’s roots in a commercial health application purchased by Equian some time ago, an application that has been adapted for use in workers’ comp. Building on that application, the company continues research to identify emerging billing practices, and develop identification techniques and rules to address those practices; to date more than 100 additional rules and millions of additional edits not found within typical bill review engines are in place.

There’s a LOT behind CCL; while I can’t provide more than a superficial overview, here’s a few things that popped up for me.

  • Diagnosis and procedure codes with a “low-likelihood”of occurring in work comp are flagged; when they appear medical records are reviewed in detail
  • Experimental and Investigational services typically fall thru the cracks in routine bill review processes; these have been identified and payment logic developed.
  • CCL includes identification of services that appear to be body-part related but actually address pre-existing conditions
  • Extensive research on the notorious 59 modifier enables reductions for inappropriate charges associated with surgery

Equally important is Equian’s ongoing research and analysis to identify emerging and previously unseen billing practices, development of identification techniques and rules, and evaluation of results.

CCL is a supplement to, not a substitute for the regular bill review process and technology. It requires data transmission to and from Equian via secure link, similar to PPO pend-and-transmit processes. Results shared by Equian demonstrate CCL is most useful for high-volume bill operations. Across the board, reductions average about $45 per bill (I was not able to independently verify savings or impact, and note that results are almost certainly highly contingent on each payer’s unique situation.)

What does this mean for you?

Never stand still.

Gas, meet fire.

I’m no economist. But I get math.

And so does the stock market. There’s a very good reason portfolio values have crashed; Congress just dumped a whole lot of gas on what was a controllable fire.

After eight years of slow but steady economic recovery we’re about to see a return to inflation – and all the bad stuff that comes with it.

Congress just voted to pass a budget that will add over $2 trillion to the deficit, weeks after ramming thru a devil’s brew of huge tax cuts for the wealthy, real estate investors, and big corporations.

The economic stimulus that will come from the budget and tax breaks is coming exactly when it isn’t needed – when the economy is well and truly recovered from the 2008 recession. Instead, this huge flood of cash arrives just as labor markets are tightening, wages are increasing, debt is getting more expensive and loans tougher to find.

In other words, inflation.

  • Government borrowing is about to increase a lot.
  • The cost of debt for companies, cities, states, school districts is about to go up – a lot.
  • Millions of baby boomers are retiring every year, hoping to live off their 401ks. Which are worth a lot less today than they were – and will likely lose more value in the coming weeks and months.
  • Demographics will drive health care costs ever higher – soaking up more of your personal funds and tax dollars.

From The Economist:

Public borrowing is set to double to $1 trillion, or 5% of GDP, in the next fiscal year. What is more, the team that is steering this experiment, both in the White House and the Federal Reserve, is the most inexperienced in recent memory.

American fiscal policy is being run by people who have bought into the mantra that deficits don’t matter. [emphasis added]

From Andy Roth, vice president of the conservative Club for Growth.

“With this deal, we will experience trillion-dollar deficits permanently…That sort of behavior, the last time I checked, is not in the Republican platform.”

From Paul Winfree of Heritage Foundation and former Trump economic adviser:

There will be ups and downs in the stock market, but the irresponsible combination of unnecessary tax cuts and huge increases in spending means inflation is inevitable.

And the current crop of morons in DC doesn’t give a rat’s ass.

What does this mean for you?

Electing responsible adults would be a good start.

 

 

Pennsylvania’s work comp formulary – the real story

There are honest disagreements about policy matters, and there is ignorance and fear-mongering.

That’s what’s happening in Pennsylvania’s House of Representatives, where a bill to mandate adoption of a formulary failed to pass yesterday.  It appears some politicians are being swayed by mischaracterizations by those who should know better, including “several unions joining with…trial lawyers.”

What’s especially disturbing is these unions and “plaintiff advocates” are claiming to defend injured workers, yet their opposition to this bill risks patient safety and does nothing to improve patient care.

(Note: this is NOT a slam against all plaintiff attorneys or organized labor)

One plaintiff lawyer characterized the bill as “just a cost-savings package for insurance companies.” That claim is blatantly false. Wording in the bill, SB 936, “expressly requires regulators to make sure any savings form a formulary are passed on to policyholders via reduced rate filings” (quote from WorkCompCentral)

Opponents of the bill say they’d support a bill that only addressed opioids.

This is nonsensical and naive at best.

Why are a comprehensive formulary and UR necessary and appropriate? 

Formularies have been in place in Medicare, Medicaid, Group and individual health insurance for decades. Workers’ comp PBMs use formularies and utilization review to ensure patients get the right drugs for their conditions, protect patients from potential ill effects from inappropriate medications, and streamline the approval process.

Second, it’s not just opioids that are potentially dangerous or deadly. Benzodiazepines, muscle relaxants, anti-depressants: all have significant risks, can be mis-used, and represent clear risks for patients.

Third, combining a formulary with utilization review is essential for patient safety. A formulary alone is just a set of guidelines; UR is how these guidelines are applied.

The compound drug scandal in Pennsylvania is prima facie evidence of the need for a strong formulary and tight utilization review. This from the Inquirer:

Three partners at [law firm Pond Lehocky] and its chief financial officer are majority owners of a mail-order pharmacy in the Philadelphia suburbs that has teamed up with a secretive network of doctors that prescribes unproven and exorbitantly priced pain creams to injured workers — some creams costing more than $4,000 per tube.

Pond Lehocky sends clients to preferred doctors and asks them to send those new patients to the law firm’s pharmacy, Workers First. The pharmacy then charges employers or their insurance companies for the workers’ pain medicine, sometimes at sky-high prices, records show. [emphasis added]

Formularies and UR are not the entire answer. In addition, Pennsylvania – and other states – should:

  • adopt mandatory reporting to and checking of a drug monitoring program (PDMP),
  • require a comprehensive approach to opioid prescribing (Washington State’s example is one of the better ones),
  • vigorously enforce drug distribution reporting requirements, and
  • demand manufacturers and distributors pay for the damage they have and continue to cause.

Note – as I’ve opined before, I have concerns with closed or binary formularies, and strongly believe payers and PBMs should have the flexibility to adapt formularies to match the needs, conditions, and co-morbidities of individual patients.

What does this mean?

We are doing everything we can to ensure patients get the drugs they need quickly, while protecting those patients from potentially dangerous medications.

It’s not about costs, it never was, and it never will be. 

 

Lock ’em up!

In the State of the Union address, President Trump said:

“We must get much tougher on drug dealers and pushers if we are going to succeed in stopping this scourge,”

There was only a passing reference to treatment, and there’s been no appreciable effort from the White House to expand treatment.

That approach has not and will not work. Period.

Equally troubling, the White House has sidelined professionals in favor of political appointees with little knowledge of or experience in dealing with opioids, the opioid crisis, pain management, or treatment. Politico:

“Among the people working on the public education campaign that Trump promised is Andrew Giuliani, Rudy Giuliani’s 32-year-old son, who is a White House public liaison and has no background in drug policy…”

This is both personal and professional for me.

A family member in law enforcement ran a drug task force in a major city.  He died in the line of duty, leaving a gaping hole that will forever be an unbearable burden.

Our daughter and her husband deal with the opioid crisis every day in their jobs working in Emergency Departments. They see the futility of enforcement-based approaches several times each shift, and it is a crushing burden.

Patients with Substance Abuse Disorder (SAD) will do anything to or for anyone to get their drugs. Prostituting their kids, stealing from parents, abandoning their families…if people will do this, the risk of a jail sentence is NOT going to get them to stop taking opioids.

And the suppliers are making hundreds of millions of dollars every week…Nothing will prevent new ones from replacing any pushers unlucky or stupid enough to get caught.

The problem is both demand and supply.

Supply can be laid directly at the feet of opioid manufacturers and distributors. They lied, they knew they were lying, and they kept lying about the addictive risk of opioids. They convinced prescribers that addiction risk was so low as to be unimportant for patients that “truly had pain.”

Now that they’ve created demand – millions of users, they stand aside, blaming their victims for using the products pharma knew would cause addiction. Unable to obtain prescription opioids, users switch to heroin.

Purdue, Endo, J&J, and other opioid manufacturers created an incredibly “loyal” customer population of patients who will do anything to get their drugs.

We desperately need a major expansion of treatment programs and funding for those programs.

We do NOT need any more dead law enforcement officers, burnt-out first responders, bankrupt governments, profiteering private prison operators, devastated communities and ruined families.

But that’s exactly what we’ll get with a law enforcement approach to opioids.

I am deeply troubled that the President has done nothing to increase treatment, to add funding, to staff the Office of National Drug Control policy with people who have a clue.

The Administration has not appointed a director for ONDCP. A young man with no credentials or experience or demonstrable ability was the Deputy Director of ONDCP. The President’s budget proposed slashing ONDCP funding by 95%, a move that prompted fellow Republicans to promise to fight the cuts.

One example is telling. A program slated for major change is the High Intensity Drug Trafficking Initiative, the single most important program focused on fentanyl. According to one expert, moving the program out of ONDCP;

“does not make practical sense. Imagine taking the responsibility of emergency response away from the CDC in the middle of the Ebola emergency. It would never happen,”

What does this mean?

Without a focus on treatment, there is no change.

An anesthesiologist on opioid addiction and treatment

Some doctors are changing the way they talk about and address pain, offering hope that fewer opioid addicts will be created.

And we are starting to learn how to better help those with substance use disorder – a term that better describes those addicted or dependent.

I learned a lot in a recent interview with Faye Jamali MD, a California anesthesiologist who found her brain “hijacked” by opioids.

According to Dr Jamali, It began with a fluke of an accident at a child’s birthday party, in which she broke her wrist. Two surgeries followed. Sidelined and in pain, Dr Jamali turned to painkillers prescribed by her doctor. Feeling increasingly depressed, and with easy access to drugs, Dr. Jamali began to inject herself, rather than heading to the ER. “That’s when my brain got hijacked,” she says, adding that “I knew nothing about addiction.”

After going thru the recovery process, she’s been sober for eight years, and recently left Kaiser Permanente to help other physicians recover. Here’s an excerpt from our conversation. (Note emphases are mine, and I while tried to capture her comments precisely I may have made errors)

MCM – How has pain management changed?

Dr Jamali – Over the last 4-5 years there’s been a big push to limit amount of narcotics prescribed. Before, it was taught that if patient has pain, just give them as much as they want…that’s changed, that isn’t being taught now, we are on the right track now.

[Instead medical students are being taught] multimodal analgesia, NSAIDs, nerve blocks, and to use PT more.

In California there has been a big push to look at pain holistically and change patients’ expectations about discomfort levels. You can help manage it using different medications and medical services.

MCM – Can you talk about specific changes you are seeing with pain management?

Dr Jamali – with pre-emptive analgesia, there’s less post operative pain if you block it first with nerve blocks [before surgery is performed], then keep using nerve blocks to reduce the need for opioids after surgery. We found that that the care type was key to minimize the amount of opioids needed pre- and post- surgery. Patients who have pain in the hospital are much less likely to get up and walk around, so [nerve blocks help patients be] ready for more activity.

Patient acceptance of pain is also important; We have worked to help patients understand about managing pain, by decreasing opioids or [prescribing] no opioids, you feel better because your mind will be clearer and you will recover faster. There are other ways to manage the pain, to get you comfortable enough to do your errands. Lots of positive reactions from patients to this as opposed to the last time they had this.

Patients have been very happy with the nerve blocks and nerve catheters… patients doing a second knee replacement said this [change in pain management] was night and day with them, [they were] more clear headed, more comfortable, could do their PT…We take pain seriously – pain impedes recovery, this different strategy was better for them.

MCM – For those already addicted– what has worked?

Dr Jamali – [The most successful] Programs for recovering physicians are completely holistic, not a 28 day approach, may be 90 days. Physicians in recovery should have a 5 year plan of what you should be doing; weekly group, Medication Assisted Therapy, practice monitors. For the general population it is extremely expensive to go to inpatient treatment.

12 step is the only one that is free, but there is very little data [on success rates] as it is anonymous.,. Basic data indicates [long-term success is] 8-10% [of patients], AA-type programs say it is higher. Patients do it because it is free. In and of itself it isn’t enough. Should be longer, include component of what made this person get into addiction, lot of times there are factors that enabled addiction, in many instances that isn’t covered [by these programs].

Relapse occurs because we aren’t treating the disease…we don’t only treat the first 90 days of diabetes…. It [substance abuse disorder (SAD)] is a medical disease that needs long-term treatment.

We need to think of addiction as a disease and not stigmatize it. As long as there is a stigma we won’t treat it as we do with other diseases. All evidence indicates it is indeed a disease, this is a powerful highjacking of the brain that leads to this behavior.

There should be national or state standards for treating SAD, requiring enough long term treatment…Can’t just lock them up, need to have a plan. There should be a gold standard for what should be offered to patients who are addicted right now. Look at the causes, what is needed to deal with that over the long term.

Public perception is changing, it used to be addicts are bad people, now we see doctors, soccer moms, teenagers who are part of the problem, they can’t get more drugs so are doing heroin.

MCM – What is the role of opioid manufacturers?

We dealing with the intersection of profits and what is best for society. Far too many pills are going to small towns. Incentives are in the wrong place. Free market has a role in many areas, in healthcare it should not be a free market system…Should not be a profit in treating patients with illness. There’s no financial incentive to prevent a disease if they can profit from it.

Key takeaways:

  • Substance Abuse Disorder is a chronic disease
  • We need to stop stigmatizing sufferers
  • Long-term multi-modal treatment is critically important

 

 

 

Big pharma’s “not responsible” for the Opioid Disaster

Opioid manufacturers and distributors are “lobbying up”, spending almost $2.5 million dollars to lobby state Attorneys General over the last three years, likely in an effort to convince them to not sue manufacturers.

These millions allow manufacturers and distributors access to Attorney General meetings, where CBS reported their representatives spoke “on a panel, telling a group that they were not responsible for the opioid crisis, according to several attendees.”

Overa ten years, these distributors and manufacturers sent 21 million pills to a single West Virginia town, a town with a population of 2900 souls.

That’s around 462 tons of pills.

320 pounds of opioids for every person in Williamson, WV.

Two independent pharmacies – just a quarter mile apart – each got more than a million pills a year. The explanation offered by one of the pharmacies – that the pharmacy serves a much bigger area than just the town of Williamson – is beyond ludicrous. The entire county’s population is less than 27,000.

It gets worse…this from Gizmodo…

An investigation by the Charleston Gazette-Mail found in 2016 that almost 800 million hydrocodone and oxycodone pills were distributed throughout the state’s pharmacies from 2007 to 2012—a figure all the more astounding given that the state has only 1.8 million residents. [emphasis added]

That’s more than 400 pills for every man, woman, and child.

BTW, Purdue Pharma has made $35 billion from sales of Oxycontin.

How in the hell can distributors claim they are “not responsible for the opioid crisis” when distributors sent 2 million opioid pills a year to 2 pharmacies in a tiny town?

A new paper from University of Virginia researcher Christopher Rhum discounts many of the factors blamed by some for the huge spike in drug deaths, placing the blame squarely on the supply of opioids. According to The Economist, “The epidemic is caused by access to drugs rather than economic conditions.”

Of note, the owner of one of the Williamson pharmacies was quoted saying: ““All the prescriptions we filled were legal prescriptions written by a licensed provider,”

Tomorrow, an interview with a licensed provider.

Thanks to Liz Carey of WorkersCompensation.com for her story on this.

Media coverage of Amazon/Berkshire/JPMorgan misses the point.

The coverage of the JPMorgan/Amazon/Berkshire Hathaway healthcare initiative has been universal, breathless, and mostly superficial.

Scoffers, “experts” are gleefully predicting this attempt to do something really different will fail miserably, victim of ignorance and hubris. While there are no guarantees, these naysayers ignore:

  • the three CEOS and their staff are brilliant, powerful, have almost unlimited resources, and are very, very cognizant of the difficulties they face. These are as far from idealistic newbies as one could get.
  • the “competition” is pretty lousy, hasn’t delivered, and their incentives are NOT aligned with employers’. If the big healthplan companies could have figured this out on their own, you wouldn’t be reading this.  It’s not like A/B/J are taking on Apple, Salesforce, or the old GE.
  • the financial incentives are overwhelming; healthcare costs are over $24,000 per family and heading inexorably higher. Unless these companies reduce and reverse this trend, they’ll have a lot less cash for future investments.

Many are also talking about “initiatives” that are little more than tweaks around the edges; things like:

  • publishing prices and outcomes for specific providers aka “transparency”
    My view – research clearly demonstrates consumers don’t pay attention to this information, so there’s no point
  • using technology to monitor health conditions and prompt treatment/compliance
    My view – lots of other companies are already doing this, and this is by no means transformational
  • use buying power to negotiate prices
    My view – it’s about a lot more than price, it’s about value.

Here’s a few things A/B/J may end up doing.

  1. Own their own healthcare delivery assets.
    My view – Insourcing primary care, tying it all together with technology, and owning a centralized best-of-breed tertiary care delivery center would allow for vastly better care, lower patient hassle, and cost control.
  2. Buy healthcare on the basis of employee productivity
    My view – Healthcare is perhaps the only purchase organizations make where there is no consideration of value – of what they get for their dollars. To the Bezos’, Dimons, and Buffets of the world, this is nonsensical at best. They will push for value-based care, defined as employee productivity.
  3. Build their own generic drug manufacturer
    My view – No-brainer.
  4. Allow employees to go to any primary care provider they want, but require them to go to Centers of Excellence for treatment of conditions that are high cost with high outcome variability.
    My view – No brainer.

I’d also expect many more large employers will join the coalition, for the simple reason that they have no other choice.

What does this mean for you?

Do not discount this.