The Anti-Opioid Movement is gaining speed and traction

The pushback on opioids has accelerated dramatically; every day there’s at least one major announcement about states, the Feds, or other entities taking major steps to attack the overuse of opioids.

We are starting to see some progress.  Perhaps most noticeably, a few weeks ago the CDC published draft guidelines re the use of opioids for treating chronic pain.

Unsurprisingly, the pain industry wasn’t happy. They’ve penned letters to CDC officials and Congress, with one complaining: “a lobbying organization that seeks to reduce the prescribing of opioids appears to have played a significant role in developing the guidelines.”

Allow me a moment to pick my jaw off the floor.  This is the height of hypocrisy.

This is coming from an industry that has used the billions it has made from selling opioids to:

  • lobby state and federal elected officials and regulators,
  • pack ostensibly unbiased review panels with drug company shills,
  • fund “research organizations” that published biased research supporting opioids, and
  • brilliantly and effectively promote the use of this incredibly dangerous and damaging drug.

I’m just stunned at the unmitigated gall of these people.

CompPharma (the work comp PBM advocacy organization of which I am president) has joined with the National Safety Council, Physicians for Responsible Opioid Prescribing, American Society of Addiction Medicine, National Coalition Against Prescription Drug Abuse and several other groups to support the DC guidelines.

The human cost of opioids is a constant and terrible reminder of the impact the opioid promotion industry has on each of us.

Yesterday the estimable Steve Feinberg MD sent one of his periodic emails re interesting issues related to work comp and the delivery of care in comp.. This one was a column by Bob Beckel, an editorialist who recounted how he had to check himself into rehab after a mere eight weeks post-op care involving OxyContin and Percocet had addicted him to the stuff.

Truly frightening.  And very common.

A truly awful side effect of the rampant overprescribing of prescription opioids has been the explosive growth in heroin use.  When patients can’t get prescription opioids, those addicted or dependent may well turn to illicit versions of opiates, namely heroin.

myMatrixx’ Phil Walls RPh has written an excellent synopsis of the history and current status of heroin. Detailed, thorough, readable; download and read on your next flight.

Perhaps the most trenchant observation appeared a couple weeks ago in an editorial in the New York Times entitled “How Doctors Helped Drive the Addiction Crisis”.  Here’s Dr Richard Friedman’s concluding paragraphs:

WHAT is really needed is a sea change within the medical profession itself. We should be educating and training our medical students and residents about the risks and limited benefits of opioids in treating pain. All medical professional organizations should back mandated education about safe opioid treatment as a prerequisite for licensure and prescribing. At present, the American Academy of Family Physicians opposes such a measure because it could limit patient access to pain treatment with opioids, which I think is misguided. Don’t we want family doctors, who are significant prescribers of opioids, to learn about their limitations and dangers?

It is physicians who, in large part, unleashed the current opioid epidemic with their promiscuous use of these drugs; we have a large responsibility to end it. [emphasis added]

Kudos to Gov Charlie Baker (R) of Massachusetts.  Gov Baker is calling for a strict limit on initial opioid prescriptions throughout his state.  Of course several docs are protesting this, noting problems of access for patients who need the medications.  It would be even better if these docs noted the problems inherent in opioid prescribing; perhaps they did but the reporter didn’t publish those comments… (thanks to Jake for the tip!)

Finally, there are many, many pieces and parts to ACA, including significant funding for clinical research, patient outcomes research, and research into improving the delivery of care. The Patient-Centered Outcomes Research Institute just closed it’s request for proposals for research into Clinical Strategies for Managing and Reducing Long-Term Opioid Use for Chronic Pain.

There’s nothing more important in the work comp world than this issue. 

ACA – what can we expect in the healthplan market in 2016?

First, benefit plans offered on Exchanges are evolving rapidly, with smaller, closed networks getting a lot more traction. A recent report from Avalere found:

from 2014 to 2016, the percentage of plans offering PPO networks dropped from 39 percent to 27 percent. This represents a 31 percent decline over the three year period. Meanwhile, use of health maintenance organization (HMO) and exclusive provider organization (EPO) networks has increased.

This isn’t surprising; health plans get better reimbursement, tighter relationships, and fewer management with small networks.  Expect this trend to continue.

But not without major challenges from regulators, health care providers, and consumers. In New Jersey, the dispute between Horizon Blue Cross/Blue Shield and a big hospital over Horizon’s value-based care initiative and that initiative’s impact on St Peter’s University Hospital is now before a judge.  Essentially, St Peter’s isn’t on Horizon’s Tier One provider list, which means consumers would have to pay more for care there.  They don’t like that, and want in.  Horizon claims St Peter’s is not committed enough to population-based care.

Expect these disputes to become commonplace.

Next, Co-ops – those start-up health insurance programs designed to add competition to the marketplace, are failing left and right.  Clear evidence that PPACA is failing, and another example of government’s inability to get anything right.  RIght?

Well, no.

In reality, this Congress screwed the Co-Ops.  

Long story short, the start-up Co-Ops were supposed to get financing in part from a risk corridor program that was part-and-parcel of PPACA.  The idea behind the arrangement was to help small players get started so they could provide an alternative to the behemoth health plans dominating our world.

Then Congress intervened.  Here’s Louise Norris:

On October 1, 2015 the federal government notified health insurance carriers across the country that risk corridor payments from 2014 would only amount to 12.6 percent of the total owed to the carriers. The program is budget neutral as a result of the 2015 benefit and payment parameters released by HHS in March 2014. And the “Cromnibus bill” that was passed at the end of 2014 eliminated the possibility of the risk corridors program being anything but budget neutral, despite the fact that HHS had said they would adjust the program as necessary going forward. But very few carriers had lower-than-expected claims in 2014. So the payments into the risk corridors program were far less than the amount owed to carriers – and the result is that the carriers essentially get an IOU for a total of $2.5 billion that may or may not be recouped with 2015 and 2016 risk corridors funding (risk corridors still have to be budget neutral in 2015 and 2016, so if there’s a shortfall again, carriers would fall even further into the red).

Many health insurance carriers – particularly smaller, newer companies – are facing financial difficulties as a result of the risk corridors shortfall. CO-OPs are particularly vulnerable because they’re all start-ups and tend to be relatively small. All of the CO-OPs that have announced closures since October 1 have attributed their failure to the risk corridor payment shortfall.

So, what happened is entrepreneurs based their business plans in part on the risk corridor program.  Congress, in its infinite wisdom, decided to not deliver on its original commitment, thereby killing off competition in many key markets.

One analyst has what I think is a pretty insightful take on non-financial enrollment challenges faced by new entrants to the health plan markets:

“I think the problem with [insurers not doing business profitably on public exchanges] is that it takes time…for them to mature. It is the nature of the insurance business when there is a brand new insurance line, where people had no insurance previously. There needs to be a motivating factor to buy insurance,” which may come when people face more significant fines in 2016 for not having coverage.

— Vishnu Lekraj, securities analyst for Morningstar, Inc. in HealthPlan Week

For a thoughtful piece on just what it takes to start an innovative health insurance plan/company/business, read this.  A key takeaway is it is not just about financing…

What does this mean for you?

Health plans are evolving rapidly, painfully, and some successfully. It’s not pretty but it is necessary.

NWCDC – the Wednesday Report

Kudos to NWCDC for the Keynote – a real, live health care expert spoke for 90 minutes (!) on achieving excellence in medical care.

Arthur Southam MD, the leader of Kaiser’s hospitals and health plan operations, was a great choice.  Admittedly I’ve always been a fan, so perhaps I’m not the objective reporter one would want.

Saw some but not a lot of traffic on the exhibit hall floor in a quick pass thru. Lots of really big booths these days but the number of exhibitors seems to be down from past events. That’s not surprising; industry consolidation in most of the niches means there are fewer companies to exhibit…

Interesting conversation today with a medical management services exec. The discussion ended up focusing on the kind of intelligence or awareness needed to build and grow a successful company.

What business starters have is an intrinsic, almost visceral understanding of what their customers want. They KNOW what their new company needs to do to meet those demands and they focus intensely on every little thing involved in delivering to the customer.

As these companies grow, the successful ones continue that intense focus. They know who their customers – the ones who “buy” or choose to use their services – are. They spend time with those customers; a LOT of time. They develop relationships based on that shared time together, but more importantly the relationship is anchored in the customer’s belief that the vendor understands them and their world.

The next stage is often a buy-out or sale.  In some cases, the buyer recognizes the value inherent in that focus, and supports it financially and strategically.  Investing in technology, staff, training; getting out to actually visit customers and end users (often neglected if not ignored completely), these buyers use their business acumen and experience to build ever deeper relationships.

Others focus on the numbers, all but ignoring what drives those numbers.  And that’s where they fail.

There’s much more to this, but it’s really late.  More tomorrow.

High deductible health plans are stupid.

Okay, poor grammar, but true.

High deductible health plans (HDPHs) are designed to a) reduce health insurance premiums by b) making people better consumers of health care. It’s also been suggested that lower costs of HDHPs may make it possible for more small employers to provide health insurance.

Let’s take these in order.

First, a bit more background these plans allow members to contribute, tax free, dollars to a Health Savings Account.  These contribution limits in 2014 were $3,300 for individual plans and $6,550 for family coverage.  The idea is folks will be more careful spending their “own” money than their employer’s or insurer’s.  Of course, the members have to actually fund these accounts; more on that in a later post.

Comparing a HDHP plan to a “regular” lower deductible plan, premiums are reduced – but that’s only because the cost is shifted from the employer/insurer to the consumer.  It’s a shell game, and the consumer ends up with the empty shell.

There’s no evidence that these plans make us better consumers of health care, and growing evidence that there’s no such result.  Here’s a quote from a story about a recent study of high deductible plans…

employees who reduced their use of care the most before reaching their deductibles were the sickest workers, even though they were also the most likely to continue using services after their deductibles were reached. Once such workers did exceed their deductibles, their use of medical services increased, the study found.

This brings up the main reason high deductible plans don’t control costs; the 20% of consumers who incur 80% of health care dollars blow thru their deductible sometime in March.  After which their care is free, so they use a lot of it.

Couple that result with the fact that many healthier folks avoid preventive care – including maintenance medications – because they don’t want to spend the money.

When it comes to controlling costs, high deductible plans are counter-productive.

As to the possibility that HDHPs help smaller employers afford coverage, that’s indeed possible.  Notably, according to a Health Affairs article, less than 2% of the smallest employers offered HSA plans in 2012 compared to about a quarter of the largest employers.

And, as of 2012, there were only about 6 million HSAs reported to the IRS, so it does not appear as if the takeup has been dramatic.  Of course, that may well have changed over the last two years.

So, if you’re looking to benefit design to control costs, what’s a better alternative?

Simple.  Replace deductibles and copays with co-insurance.  That is, have consumers share in the actual cost.  If treatment costs $100, then the consumer pays $20; if it is $4000, then the consumer pays $800.  This will make the consumer cost conscious without breaking their bank.

I understand that this will require the consumer, provider, and health plan to know what the cost of care is, ideally before treatment.  That is another major benefit of a co-insurance based program; it will speed adoption of transparent pricing and make consumers much more discerning buyers.

Yes, keep an out of pocket limit to protect consumers.  High utilizers will feel the pain of paying co-insurance far longer than they do today.  As a result, they will be better consumers overall.

What does this mean for you?

This isn’t that complicated, nor is it difficult.  Health plans that do this will gain a competitive advantage.

Catching up…

It’s the busy time – budgets, 2016 planning, getting those revenues in before year end. Tough to keep track of important stuff – no worries that’s what we at the Intergalactic Headquarters of Health Strategy Associates are here for!

First, a brief comment on the Cadillac Tax.  The cries for repeal are ill-advised and politically driven – even if they have the support of both Bernie Sanders and many in the GOP. Fact is repealing the Tax would cut Federal revenues by $87 billion; notably those calling for repeal haven’t figured out how to replace the lost income.

Under PPACA, hospitals, health care providers, insurers, drug companies, device companies are all paying their share to help reduce the number of uninsureds.  Yes, some union members and highly-paid executives with rich benefit plans are going to pay slightly higher taxes – but that’s because they are lucky enough to have incredibly generous benefits.

Whatever happened to shared sacrifice, to working together to solve big problems, to Kennedy’s call to ask not what your country can do for you but what you can do for your country?  We constantly hear politicians talking about making America great; that doesn’t happen without sacrifice from all of us.

It’s time to for Sen Sanders, his GOP allies, and highly-compensated workers and executives to stop whining, suck it up, and do their part. 

Okay, that’s off my chest.

Helios has published their latest update on regulations and legislation affecting pharmacy issues in work comp.  A helpful document to file away for future reference.

NWCDC – the Vegas confab looks to be a big event this year; don’t forget to register for the Women in Workers’ Comp Leadership event here.  It will be held the day before the Conference officially begins.

In the shameless self-promotion department, the must-attend session is the Blogger’s Panel on Thursday at 3:30.  See Mark Walls do his level best to maintain order among chaos as Becky Shaffer, David DePaolo, Bob Wilson and I opine on the great events of the day.

Bob and I will be joined by John Plotkin and Bob Reardon of ISG at ISG’s event at 5:30 on November 11 – we’re going to discuss social media as a force for good in the work comp industry.  Make sure to register here.

WorkCompCentral’s CompLaude Awards Gala will be held December 5 in Burbank.

Finally, for those docs looking to increase their income, here’s a GREAT opportunity.

As a colleague noted, if the new guy is making $700k a year, how much are the partners making??


Prepping for the National WC Conference

It’s just around the corner; time to get those appointments nailed down and social calendar set.  There’s always a lot to do and much to learn.  I’ve been going to NWCDC since it was held in the basement of a hotel in Chicago; based on that long experience here are a few things I’ve learned.

  1.  Don’t schedule too tightly.  It can take a bit to get from one meeting to the next, so be aware of location and how long it takes to get around.  And don’t forget that you’re bound to run into colleagues and friends on the way – catching up always takes a few minutes.
  2. Set your schedule ahead of time.  Review the agenda, figure out the must-dos, and block them out.  Then, schedule around those must-dos.
  3. Download and use the NWCDC smartphone app. It is here.  This is a no-brainer; it will make your life so much easier.
  4. Use your smartphone’s voice recorder to “take notes” after your meetings.  Unless you’ve a much better memory than I have, it is too easy to forget what transpired, what you committed to do when.  And, the voice function allows you to record your thoughts while heading to your next meeting.
  5. Don’t get caught up in the rumor mill.  There’s a lot going on in Vegas, and the M&A world has never been busier.  As one who has gotten it wrong a time or two, I’d suggest listening with a skeptical ear, and not passing anything on unless you’ve got the scoop from two different and credible sources – who didn’t get it from the other “different and credible” source!
  6. Know the landscape.  The Mandalay Bay location is great – a very welcome change from the Hilton – but it is spread out and it takes a while to get from the meeting rooms to the lobby to the exhibit floor.  And, there are two Starbucks, so make sure you are specific about where you are meeting.
  7. Wear sensible shoes.  You are going to be on your feet all day and much of the evening, so be kind to them.
  8. Finally, what happens in Vegas gets posted on instagram.  Don’t be stupid. Like these guys. Alcohol is not your friend, and this is not spring break.

Finally, among the events you should strongly consider, register here for the 2nd Annual Women in Work Comp Leadership Forum; it starts at 2 pm on November 10, the day before the official NWCDC kickoff.




Social media in work comp isn’t just about busting claimants

Sure, the news is replete with stories about work comp claimants busted for posting pictures of their car repairs or elk hunts or CrossFit workouts.

But social media is also a force for good – it enables communities to learn quickly about news that wouldn’t be worth any mass media’s time. Communities can share their views, provide guidance and support, engage intelligently.

Bob Wilson, the legendary WorkCompKing, John Plotkin and I will take the stage at 5:30 pm Nov. 11 at the Mandalay Bay in Vegas to discuss how social media can be used for good. (Registration is here; cocktails and hors d’oeuvres will be served) Our Bob’s public discussion of SAIF’s appalling treatment of Plotkin is well known and but one example of the power of social media.  (Bob’s post on the session is here.)

More to the point, the SAIF community’s support for John would have been much more difficult to marshall, document, and report without social media.

That and Bob’s biting wit and relentless pursuit of the issue may well make other organizations a bit more cautious before crossing the stupid line.

Hope to see you there

What’s happening in the “real” health care world?

While premium increases remain at pretty low levels, employees’ share of costs is increasing.  In fact, that’s one reason premium increases are as low as they are.  Without the higher employee premium contributions, deductibles and copays, premiums would have gone up a couple more points.  According to Bloomberg, several factors are contributing:

  • the Cadillac Tax – high-cost health plans will see a tax of 40% on the cost above $10k for individuals and $27.4k for families.  This is leading some to increase deductibles and other cost sharing to keep premiums under the “Cadillac” level.
  • Increasing cost-sharing keeps premiums lower – and lower premiums are more attractive to buyers.  Deductibles now average above $1000; deductibles are up 67 percent over the last six years.
  • And higher premium contributions are also a driver; on average workers are paying more than $1000 towards their coverage.

Consolidation among health plans continues, although there’s little evidence that it will lead to lower costs or better quality.

CEOs from Aetna and Anthem testified before Congress last week, with both touting the benefits of their pending acquisitions of smaller health plans.  While it sure looks like the consolidation binge is concentrating power in the hands of a very few health plans, Anthem CEO Joseph Swedish claimed otherwise, stating: “health insurance is flush with competition…The number of health insurers increased by 26% in 2015 with 70 new entrants offering coverage.”

Not sure Mr Swedish’s claim accurately portrays the state of competition in health insurance, and the American Hospital Association and AMA certainly think it’s a bad thing.  An analysis by the AMA indicates

The combined impact of proposed mergers among four of the nation’s largest health insurance companies would exceed federal antitrust guidelines designed to preserve competition in as many as 97 metropolitan areas within 17 states

While I am VERY skeptical about any analysis by the AMA, I believe that in this case they have a point.  As one expert notes:

I’m aware of no peer-reviewed, published analyses that show that insurance mergers, on average, benefit consumers.

What does this mean for you?

Huge changes in the health care system will have far-reaching implications; watch for more battles between big provider groups and big payers, with smaller payers suffering fall out.  This “fall out” will take the form of higher medical costs due to lack of bargaining power,