Friday catch-up

A busy week indeed!

Here’s what happened that’s worthy of your attention.

The Feds have been all over healthcare fraud for several years; earlier this week, Attorney General Loretta Lynch announced charges against 301 people accused of defrauding taxpayers – that’s us, folks – of almost a billion dollars.

Over the last decade, the Medicare Fraud Strike Force has charged “2,900 people with health-care fraud, who have billed Medicare for $8.9 billion.”  Note that doesn’t include Medicaid and private insurer fraud; I’d be surprised if the alleged miscreants weren’t going after every payer.

Workers’ comp

There’s been much talk of late about “broken” workers’ comp systems, a good bit of which has been hyperbolic and based on shrill trumpeting of anecdotal reports of payer screw-ups.  Rick Victor PhD, formerly WCRI Executive Director and now with the Sedgwick Institute provides a needed review of the facts in his latest missive.  A couple highlights:

  • The overwhelming majority of injured workers return to work and do so to their pre-injury employer at the same or higher pay
  • Most workers receive their first indemnity payment without dispute or substantial delay
  • By an overwhelming majority, most workers were satisfied with medical care received

I’d suggest that, like any and every other social benefit mechanism, work comp does have its issues, problems, shortfalls, and screwups, it works well for the vast majority of patients.

Yes, we can always do better.  Yes, there are bad actors.  But no, workers’ comp is NOT broken.

ODG delisting from National Guideline Clearinghouse

The kerfuffle about ODG’s removal from the NGC is a teaching moment that risks being overwhelmed by marketing-speak.

The central issue is NGC’s definition of and requirements related to assessing, documenting and applying scientific evidence.  An unrelated but still-relevant issue is applying for listing on NGC is discretionary, and by no means should a decision to NOT apply be construed as “evidence” the guideline developer is somehow lacking.

A quick summary of “evidence” is here; you may well think this is anything BUT quick, however like many critically-important but somewhat obtuse subjects, the devil is in the details.

Another excellent – and shorter – synopsis is from the Institute of Medicine. The IOM has eight standards for “trustworthy” guidelines:

  • Establishing transparency;
  • Management of conflict of interest;
  • Guideline development group composition;
  • Clinical practice guideline–systematic review intersection;
  • Establishing evidence foundations for and rating strength of recommendations;
  • Articulation of recommendations;
  • External review; and
  • Updating.

Suffice it to say that one person’s (or company’s) definition of “evidence-based” may well be different from another person’s – or generally accepted standards.

I’m hoping to continue the discussion of “evidence” in future posts.

Well worth a read

David Williams writes often and clearly about health issues; a recent post caught my eye and I’ve returned to it several times since. David discusses robotic surgery, making the case that technology may well hit surgery – and surgeons – just as it will affect long-haul trucking.

A stupid comparison, you say.

Before you do, read his post.

Finally, Health Affairs is looking for articles/research on various aspects of work and health for its February 2017 edition.  Details here.

Enjoy the weekend.

Exchange health insurance premiums up 10%…

ok, that’s the headline, but it’s so generalized that it’s all but useless. In fact, premium increases vary quite a bit around the country and even within markets.

Our plan is up less than 1 percent.  And here’s why.

The 10% figure is a very rough average of the price changes for the two lowest-cost “Silver” plans – the second-tier plans offered on the Exchanges in 12 states plus DC. In fact, premium changes for the benchmark second-lowest Silver plans range from a 13% decrease to an increase if 18% – and these are preliminary, before the state review process.

A couple other factoids.

  • 7 of the markets reviewed by will have fewer insurers participating, while the other 7 will either stay steady or have more competitors.
  • Most of the plans that were the lowest-priced in 2016 will not be the cheapest next year. However, in most markets, consumers who shop around will be able to find plans with premiums below their 2016 rates.
  • On average, 5.5 insurers will participate in the 14 markets next year, down from 5.9 in 2016.

We buy our insurance thru the Exchange in upstate New York. Our premiums will increase about 1% in 2017 – for a platinum plan, narrow network, no out-of-network coverage for a three member family aged 58, 57, 24.  Very low deductibles, but a very limited choice of providers.

So, what does this all mean?

Clearly, the narrow network is working for Fidelis, our insurer.

Contrast this with UnitedHealthcare, which is exiting most markets after a financially abysmal couple of years.  Humana has also been hammered.  UHC (and to a slightly-lesser extent Humana) has long focused on the employed market, one where care management is far less of a priority than marketing to brokers, benefits managers, and folks with jobs.  Broad networks and generous benefit plans are absolute necessities, as moms – who are very influential in insurer selection – want their ob/gyns and pediatricians in-network.

Brian Klepper and Fred Goldstein said it very well when discussing Molina and Centene, two plans that are much like New York’s Fidelis:

[Plans with deep experience in managed Medicaid] have of necessity learned to manage risk more effectively than commercial plans. Medicaid plans receive a monthly rate for each enrollee, and then manage within that set budget. To accomplish this, they have become adept at understanding their populations’ clinical and financial risks, and putting medical management approaches into place that can mitigate those risks. In other words, when a plan with Medicaid experience moves into a fully insured (at-risk) commercial plan space, it is more likely to succeed.

The commercial plans, not so much. Most commercial plans have not been required to adhere to rigorous risk management disciplines and, if anything, their incentives are different. They can go light on large case management, for instance, allowing the costs of high-intensity patients to balloon, knowing that when costs exceed premium, they can recoup those costs through subsequent premium increases.

What does this mean for you?

Health insurance is changing, and plans that understand risk management are going to beat the pants off those who don’t – in the Exchanges.


Well, this makes NO sense…

The RFP will award the contract to at least two separate companies, yet the two “separate” companies that won the business are “partners” that work together quite closely.

And one has repeatedly failed to meet performance requirements and been accused of overcharging the client – while the other does not have the infrastructure or experience or basic functions required to meet the RFP’s requirements.

That’s the summary of the Veteran’s Administration contracting process for veterans’ disability evaluations, one that is now on hold pending protests from other bidders.  Yesterday Politico’s Ellen Mitchell reported that the contracting process is now on hold pending the resolution of the several protests, a delay that will cause further harm to veterans.

This is about the change the process for evaluating veterans for disability benefits, a highly-specialized service that long was the purview of the VA itself.  However, long delays in evaluations led Congress to launch a pilot program using non-VA entities to deliver the service.  The results were sufficiently positive to convince the powers-that-be to transition the evaluations to private entities.

And that’s where we are now – except the entities that “won” the vast majority of the business are either owned by or “partners” with Lockheed Martin – the giant defense contractor.

Despite a pretty shoddy performance record and demonstrated inability to meet the scheduling timeframes. So, the VA awarded most of the work to a company(s) that, to date, hasn’t been able to fix the problem that caused the VA to outsource evaluations in the first place.

After much work, three companies have protested the VA’s decision, and we’ll know more in a month or so.  (I’ve done work for one – Veterans’ Evaluation Services.)

In the meantime, veterans who need to get their evaluations done so they can start getting benefits and getting on with their lives are stuck in limbo.

Yes, the VA has been hampered by political enemies.  Yes, it has been damaged by the incredibly stupid sequester. But the failure of the contracting officials at the VA to consider their own standards when awarding this contract is a travesty, smacking of backroom deals for huge corporations.

HWR’s Pot Luck edition

hosted by Health Affairs and authored by REAL journalist Christopher Fleming is up here for your perusing pleasure.

Posts from Hank Stern, Louise Norris, David Harlow, Roy Poses, and Tom Lynch are among the insights you’ll find at this latest Health Wonk Review.

Trump on health care

I cannot believe we actually have to discuss presumptive GOP Presidential nominee Donald Trump’s health care plan.

Trump’s website calls for few specifics; most are recycled from other GOP positions while some directly contradict his past statements about healthcare or standard GOP health reform views. Moreover, he has been wildly inconsistent and often downright contradictory, often promoting then disavowing specific policy ideas in the same speech.

Notably, a couple positions contradict basic conservative ideology as well.

In fairness, buried in the dog’s breakfast that is Trump’s healthcare plan there are a couple good ideas.

With those rather major caveats, here’s what Trump says – as of this moment – about his plans for healthcare reform.

  1. Repeal Obamacare – but keep the mandate banning insurers from considering pre-existing conditions.
  2. Allow the sale of health insurance across state lines
  3. Full deductibility of individual health insurance premiums
  4. Allow individuals to use Health Savings Accounts
  5. Full pricing transparency for all health care providers
  6. Change Medicaid to block grants
  7. Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.

Rather than getting into an analysis of each of these “ideas”, let’s look at the overall impact.

First, the number of Americans without health insurance would immediately explode. About 21 million people have gained coverage under ACA; they would likely lose that coverage. Unless insurers can figure out how to comply with Trump’s requirement that insurers have to cover anyone regardless of pre-existing medical condition without going bankrupt.

If not, only healthy people would be able to get health insurance.  Health insurers would immediately begin canceling and/or non-renewing and/or not offering policies for individuals, families, and employers with many health conditions/diagnoses.  This is a matter of survival, as any healthplan forced to cover sick people would quickly find its costs exploding while healthy members fled to lower-cost healthplans.

This is fundamentally unworkable; you can’t require health insurers to cover people who aren’t forced to buy insurance, as only sick people will buy insurance. 

Notably, there’s no mention of what Trump would do to address this.

Third, full tax deductibility of premiums makes consumers less sensitive to the cost of health insurance and healthcare, a violation of conservative free market ideology.

Fourth, health care providers would have to comply with an as-yet undefined governmental bureaucracy regulating “transparency”, with requirements around posting prices, updating same, making this information available to consumers, and enforcing these regulations. If anyone thinks healthcare providers would not instantly figure out how to game this, they’re hopelessly naive.

Finally, the American health care industry is in the midst of adapting to PPACA, a process that is well underway. The changes are monumental for every stakeholder.

Any individual with an IQ above that of your average tomato plant would understand that throwing the brake switch to stop a runaway train will kill most of the passengers.

The net – Trump’s ideas are either totally unworkable and/or widely discredited. He does not have an ideologically consistent, coherent or even remotely intelligible health care plan.


Disability – it’s not a “medical” condition

A while back I had the pleasure of interviewing Glenn Pransky MD, M.Occ.H., the director of Liberty Mutual’s Center for Disability Research.  As I noted in a post a few months ago;

Glenn is the Director of Liberty Mutual’s Center for Disability Research; he is an occ med physician and has his Master’s in Occupational Health as well and has authored over a hundred articles, research papers, and book chapters.  That’s all quite impressive; what really struck me is how approachable, genuine, and open Glenn is. [my use of his first name is intentional, Glenn is completely without pretension or ego.]

Here’s the first installment of the interview (note I captured this as accurately as possible however any errors are mine) :

MCM: How has the “condition of disability” evolved over the last 20 years?

GP:  [There’s been an] Increase in the amount of health care treatment where it isn’t so clear that it makes people a lot better, along with growth in Social Security disability. More and more people seem to see themselves as permanently disabled.

Workers are staying in jobs longer because they have no resources to retire.

There are more employees with chronic conditions or who are in poor health; [there’s a] wave of baby boomers who are really unhealthy…less routine exercise in our working population. The Return to Work context of 20 years ago has changed, major shift in chronic musculoskeletal conditions is more prevalent today than it was 20 years ago – we are shifting from acute to more chronic disease state.

[Most recently there has been a] Shift from traditional jobs to non-standard work arrangements, contractors, out of house, gig economy etc. Non-traditional work situations are limited in terms of resources for RTW.  The Upside is there is more focused problem-solving on RTW these days than before

MCM: What “causes” disability?
GP: A lot of factors. It starts with a health condition that limits [the person’s] ability to work. Whether it becomes a work loss is due to other factors; whether there are accommodations available, the treating physician’s focus on disability prevention, and whether there is reassurance that the injured worker’s RTW will be safe and supported.

For everyone who’s disabled according to Social Security there’s someone working full time that means there is more [to the disability] than the health condition. Work is better for people, as prolonged disability is bad for your health. Research indicates that even when controlling for the patient’s medical condition, when working age people are out of work, they become sedentary, depressed, detached, and mortality increases.

There are significant opportunities [to mitigate disability]; early positive contact w the injured worker makes a difference; work accommodations offered for temporary alternate duty reduces TTD days by 30%, supervisor response “how can I help”, how can we accommodate” can make a difference of 20% reduction in TTD…Also having a formal policy and consistent approach to it makes a difference.

For insurers- early contact and problem solving research in Australia shows this reduces TTD days.

MCM: What is the role of medical treatment and treaters in disability; causation, prevention, and mitigation?
GP: Providers that are focused on RTW are better for patients and deliver the best outcomes when they practice EBM and communicate w patients on this; there is good evidence that this improves RTW. There are a series of studies from Bernacki in JOEM – more recent ones from WA COHE program…when patients get medical care that does not have a strong evidence base, disability is prolonged. Opioids are a great example.

More to come from Dr Pransky – my quick takeaway is this:

Disability is NOT a medical condition.  

Work comp pharmacy – early results of 2016 Survey

I’m up to my eyeballs in the 13th (!!) Annual Survey of Prescription Drug Management in Workers’ Compensation; the response from payers willing to devote time to the project has been gratifying indeed.

Previous Survey reports are available here; note these are the Public versions; respondents get a much more detailed and comprehensive version.

A bit of background first.  I conduct these surveys telephonically, speaking to the individual at the insurer/self-insured employer/state fund/TPA/trust who is directly responsible for the pharmacy program. In addition to asking their opinions and views, we get data on a variety of key metrics including:

  • drug spend for 2015 and 2014
  • opioid spend for 2015
  • compound drug volume
  • generic fill and efficiency rates
  • mail order usage

A few early findings.

  1. Pharmacy continues to be seen as more important than other medical ost areas, primarily due to the “downstream” effects of opioids on claim duration, return to work, and related pharmacy spend.
  2. Most respondents are seeing a decline in drug spend.  This is a bit of a surprise, as national research suggests drug costs are going up.  A possible explanation is that (most of) these payers are pretty sophisticated, have been working diligently on pharmacy issues for years, and most (but certainly not all) have employed a variety of programs to reduce unnecessary use of potentially dangerous drugs.
  3. The percentage of spend that goes to opioids varies greatly, from around 21% to over 50%.  Some of this is due to regional or state differences, but much is not. Much more to dig into here.
  4. Mail order continues to be woefully under-used, with most respondents reporting penetration rates in the low single digits.  Argh.
  5. Compound drugs are seen as highly problematic and payers have a wide variety of programs/efforts/mechanisms in place to address compounds.

Much more to come; when the Survey Report is done I’ll post a link.

Enjoy the weekend!


What’s your state’s prescription opioid death rate?

Utah’s is 16 deaths per 100,000 residents.

New Hampshire? 18.2.

West Virginia leads at 24.7.

Rhode Island is well into the double digits at 14.2.

Texas is among the lowest at 2.5, as is Nebraska at 2.8.

For 2014, the national death count was almost 19,000.  You can check every state here.

19,000 people died from prescription drugs – pills that a doctor prescribed for a patient. Not heroin, not crystal meth, not Ecstasy.  Pills a drug company marketed, many of them supposedly “abuse-deterrent”. Pills a stockholder profited from.

I bring this to your attention, dear reader, because the news these days includes some signs that we’re making progress, that opioid scripts are down and things are improving.

They are NOT.

In fact, don’t be surprised if the death count in 2015 hits 22,000.  That’s just a number, but it’s a number built on dead sisters and brothers and cousins and best friends, dead moms and dads and kids and BFFs and girlfriends and hunting buddies.

What does this mean for you?

Please don’t relax one bit.  Keep the pressure on, keep the focus tight, keep demanding answers, and above all, be aware,


Clinton health plan 2.0, updated

Now that Hillary Clinton is the Democratic Presidential nominee, it’s time to delve into her health policy platform.  The quick recap is she is looking to expand and build on ACA, tweaking various parts and pieces to fix legislative errors, incent states to participate, and reduce out of pocket costs. (we discussed this in yesterday’s Blab; you can watch it here.)

Expand Medicaid

Clinton would offer 100% funding for any state that expands Medicaid for at least three years, then tapering down to 90%.  This would likely encourage more states to take the step; Florida and Nebraska are two where elected officials are under increasing pressure to make the move.

Remove the family glitch

A drafting error doesn’t allow taking an employee’s family into account when determining subsidies for insurance bought via the Exchanges.  Clinton would offer tax credits to offset those out of pocket costs for eligible families.  The tax credit proposal is a convoluted way to fix what should be done via correcting the original language.

Allow near-seniors to buy-in to Medicare

More an idea than an actual policy position, Clinton is talking about allowing “people 55 or 50 and up” to voluntarily pay the entire “premium” to join Medicare.  With much to be fleshed out, this looks to be a response to Sen Sanders’ call for free public insurance for all.

This could have some major downstream effects; by removing we older and more expensive people from the privately-insured pool, insurance costs for younger folks would decrease.  This “public” option would also inject competition into areas where there isn’t any due; rural markets in particular could benefit.

Address drug prices

Clinton has several ideas including eliminating the tax deductibility of marketing expenses, setting limits on consumers’ out of pocket costs for prescription drugs, and allowing Medicare to negotiate directly with drug companies.

Most striking is the mostly-unformed concept of forcing drug developers to spend a set amount on R&D, with any additional revenues handed back to the Feds for government research on new therapies. This is intended to address the industry’s argument that research costs demand high prices (an oft-criticized and rather doubtful argument).

Sounds good, but I doubt – very much – if it could be implemented without causing a lot of problems as drug companies quickly figure out ways to game the system.

At some point it may make sense to review Trump’s, but at this point the GOP nominee – as frightening as it is to write that – has yet to come forth with any coherent health reform plan other than “repeal Obamacare” and sell insurance across state lines – neither of which makes any more sense than anything else he says.

What does this mean for you?

If Trump continues to insult and antagonize big chunks of the voting public, he may well drag down his fellow Republicans, handing the Senate to the Democrats and significantly reducing the GOP’s House majority.

Then Clinton’s plans have a very good chance of becoming law.

Monday catch-up

Summer’s arrived in upstate New York – and boy do we appreciate it. While I was watching all the trees turn green, I missed reporting on a bunch of stuff last week.

So better late than never, here it is.

P&C industry outlook

Let’s start with the macro stuff.  A couple weeks back, Fitch published a piece wherein they opined the P&C industry is in for a tough time this year. After several years of stellar performance, Fitch expects prices to decrease as competitors battle for market share. Here’s how they put it:

Renewal rates are flat or declining for most commercial market segments following a hardened market from 2011-2014. The price competition comes from underwriting success and market capacity expansion from earnings accumulation. As price competition intensifies however, this will likely be a drag on premium growth, according to Fitch. Commercial lines written premium volume grew by only 1.8 percent in 2015.

For work comp, Fitch identified prescription drug costs and continued low interest rates as problematic; the first increases costs while the second reduces investment income.


The number of opioid scripts in the US actually declined last year. And that was the third year in a row. That’s the best news we’ve heard in quite a while. Since 2012 – the peak year for opioid script volume – the number of scripts has dropped by 12% – 18% (depending on the data source).  

In case you’re interested, prescription opioids accounted for about $10 billion in total spend in 2015. Workers comp accounted for around 14% of that, a rather striking figure when you consider total work comp medical spend accounts for 1.4% of overall US medical spend.

Yup, work comp uses about ten times more opioids than other payers.

And how the bad news; the drop in scripts hasn’t been accompanied by a decrease in the death count, which stands at 28,000 for 2014.

California Workers’ Comp

Well, at least it hasn’t gotten any worse.  That’s my take on the just-released CWCI study on the UR/IMR process for Q1 2016.

  • IMR volume is about the same as last year at 160,000 determination letters per year;
  • the overall IMR uphold rate is the same as last year at 89%;
  • Rx drug requests still account for nearly half of all disputed medical service requests submitted for IMR (and 40% of the Rx drug IMRs are requests for opioids or compound meds);
  • and a small number of docs still account for the majority of the disputed  service request that undergo IMR (the top 10% of medical providers accounted for more than ¾ of the IMR service requests).  

My take – the IMR process is preventing people who don’t need opioids from getting scripts for opioids.  That’s a very, very good thing.  Yet the same docs keep prescribing this crap to patients knowing full well these requests will be rejected.

I’m very much looking forward to hearing all those “injured worker advocates” heaping praise upon the system for protecting their clients’ health and wellbeing, and that of their kids as well.

I’ll personally nominate each of them for a Comp Laude Award.