Ebola and workers’ comp

Spoiler alert – no news here, and there won’t be.

Sure, there may well be a lot of hysterical nonsense about the potential problems for health care workers and first responders, flight attendants and TSA screeners.  But there won’t be a crisis, a disaster, or even a problem.

And no, hordes of Ebola-infected suicide germ-bombers aren’t going to invade over our “porous” borders. An idea so preposterous, so far-fetched, so un-doable that only the most naive, nutty, or non-sensical would give it more than a nano-second’s thought. The debunk is here.

Ebola is quite hard to transmit – it requires direct contact with bodily fluids from an individual exhibiting symptoms. This isn’t some airborne germ spreadable by sneezes or aerosol.  The US healthcare system is already quite focused on germ control – ever seen an ER staffer not gowned and gloved for any contact at all?  And if they even think there’s an infection risk, it’s full Hazmat time.

BTW, “direct contact” isn’t touching someone skin-to-skin. It occurs, according to the CDC, when “body fluids (blood, saliva, mucus, vomit, urine, or feces) from an infected person (alive or dead) have touched someone’s eyes, nose, or mouth or an open cut, wound, or abrasion.”

What does this mean for you?

Get back to worrying about motor vehicle accidents, flu, and silicosis.  Nothing to see here.

 

Reality vs magical thinking

Too many workers’ comp execs are allowing their political viewpoints to cloud their business thinking. They can’t abide the notion of PPACA/Obamacare, and along with the majority party in the House of Repesentatives, want it repealed or blown up or completely emasculated.

This is magical thinking.

And magical thinking will not help those execs, or their companies, prepare for or deal with the implications of Obamacare.

Look, as an proud socially-liberal Democrat (as if that’s any new news to you, dear reader), I had to suffer thru 8 long, painful, miserable, agonizing, soul-destroying years of George Bush.  For those of you on the other side of the political spectrum, I feel your pain.  Really.  Even if the current resident of 1600 Pennsylvania Ave is pretty far from a liberal (sorry, had to slip that in!).

That said, it’s time to accept reality.

PPACA/Obamacare is the law of the land, it is not going to be repealed, substantially delayed, or emasculated. It is here, and it is going to stay.

Despise it you might (as I despise Medicare Part D and the Medicare Modernization Act of 2003, and the Iraq war) but accept it you must.  If you spend your work time focused on what you don’t like about health reform, you’re not spending your time thinking about reform’s implications for workers’ comp – how you can mitigate any problems, leverage any advantages, and monitor and measure ways reform affects your business.

What does this mean for you?

Those who do focus on the business implications are going to be better prepared, and therefore more likely to be successful, than those who dwell on uncontrollables.

The revenge of the nerds

It’s about understanding medical care, cost drivers, and components thereof.

Several years ago (ok, more like ten) I was in a client CEO’s office discussing medical care cost drivers, competitors, and possible differentiation strategies.  He stepped out for a few minutes to take a call, and, finding myself with nothing to do, I pulled out the latest Health Affairs to catch up on the latest and greatest in health policy research.

Upon this august gentleman’s return to his office, he asked me if I actually read Health Affair. When I said I did, he said something to the effect of “no one reads that, they just carry it around to look smart.”

And therein lies the problem.

And no, it’s not that I don’t need all the help I can get to look smart.

It is a lack of attention to the underlying drivers, influencers, issues.  It is a failure to think about how Medicare’s physician reimbursement affects commercial rates, how Medicaid enrollment drives provider behavior, how Part D enrollment influences drug pricing, how the lack of coverage among certain populations increases facility costs to commercially-insureds, how low adoption of evidence-based medicine makes for poor outcomes, how productivity is affected by insurance coverage status, how payment reform will affect workers’ compensation medical expense ratios.

There’s also a predilection on the part of some to ignore, or more commonly discount, information that runs counter to their worldview.  I see this all the time with workers’ comp execs when discussing Obamacare; they allow their political blinders to affect their business decisions.

There is so much happening in health care delivery and financing and reimbursement and evaluation and coverage that no one can possibly keep up.

What does this mean for you?

The ones who take the time to read and listen objectively, to think about import and impact are going to be more prepared, more aware, and better equipped than those that, for ideological or other reasons, have tunnel vision.

And thus more successful.

 

The other ways health care will change

That’s the title of a talk I’m giving today at the New York Academy of Medicine. There’s a lot of discussion around the major changes associated with health reform; access to care concerns, fear of adverse selection, provider and payer integration, Exchanges and Medicaid expansion.

The key is understanding that health insurance has fundamentally changed.  Today, health insurers make money by underwriting; figuring out who is going to have claims, avoiding them if possible and budgeting for the claims they can’t avoid.

That’s over.  Now, success will be driven by branding, marketing, and population health management.  Those are areas of expertise not associated with health insurers, ones they are trying to understand/obtain/build as fast as they can. That is perhaps the biggest change coming, a 180 degree shift in business operations and focus.

Here are the other changes on the horizon…

Disability Management will be the next big thing – buyers will want to know what they get for their dollars, and that deliverable will be healthier, more productive people.

Broad access is over.  Amidst all the caterwauling about small networks and restricted benefit plans is a hard truth; providers will give better deals to health plans who can direct patients to them.

Rise of the non-physician will be rapid and reach surprising heights. No question there aren’t enough docs to deliver the same medical care to more people – but that assumes that is the right care (which about a third is not) and docs should be delivering this care – which in many instances is not necessary.

(Almost) every state will expand Medicaid.  When Medicaid was first introduced in the sixties, many states did not go along – initially.  Yet all did within a few years.

Vertically integrated systems will be big winners.

Medicine will become less art and more science.  This goes to the heart of the first issue; a lot of care is the wrong care, delivered at the wrong time, in the wrong setting.  Within ACA is significant funding for outcomes research and dissemination, and the work is proceeding at a rapid pace.

Hospitals will get back to basics.  While some will continue to spend billions on fancy technology and patient rooms, most will not see much of a payoff from that investment. Instead, expect facilities to focus on streamlining processes, improve administrative efficiency, and reduce costs.  They have to in order to survive.

Revenue maximization will get ever more sophisticated.  Providers are getting really smart about coding, payer contract negotiations, and reimbursement “management”.  Payers who are vulnerable (that’s you, property & casualty) are going to get hammered.

 

What does this mean for you?

Prepare.  Watch, listen, and read.  The world is changing, and it will affect you.  

Repeal and replace Obamacare – making the case

Refusing to accept reality, the efforts of some states, individuals, corporations, and elected officials to “repeal and replace” Obamacare continue; a recent conversation on Mark Walls’ WCAG focused on this issue as well – with far too much demagoguing and scare mongering. Bluto would be proud.

bluto_288x288

The “plans” to replace Obamacare typically include some/all of the following:

  • allowing people to buy insurance across state lines
  • providing a refundable $2500 tax credit to all to buy insurance
  • giving states block grants to use for their Medicaid programs and freedom to spend it however they want
  • funding high-risk insurance plans for people with pre-existing conditions so they can get coverage when insurers reject their applications.
  • additional tort reform

Let’s briefly review these ideas, focusing on their implications for coverage and cost control.

Coverage across state lines

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

Ha.  That view reflects a complete lack of understanding of the cost drivers in health insurance, the primary driver being – you guessed it – the cost of medical care.  For anyone to suggest that a person in Massachusetts will save thousands if they can buy a policy sold in Idaho is lunacy.  yes, mandates do influence costs, but the underlying cost of insurance is the cost of care.

Refundable tax credit

People can’t buy insurance for $2500, so giving low-income people that amount won’t make them buy it as it is still unaffordable – especially if there’s no mandate to do so. Moreover, many who don’t have insurance couldn’t get it due to pre-existing conditions, and no insurance company would sell insurance to anyone who may end up costing the insurance company lots of money.  That would be foolhardy.

Block grants

Good idea, if they actually use the money to increase the coverage and benefits for Medicaid eligibles, instead of trying to dissuade or discourage potential eligibles from signing up.

Funding high risk pools or insurance plans

These have been tried, and almost all have failed miserably as states don’t like to keep funding them.  Florida’s high risk pool has been closed for years, and only a couple hundred citizens are still covered.  Moreover, this dumps the potentially high cost individuals on taxpayers, allowing commercial insurers to cherry-pick the best risks that will generate the largest profits.

Tort reform

Tort reform will not appreciably reduce medical costs. 

Research indicates defensive medicine accounts for 2.4 percent of US health care costs.  That’s not to say medical malpractice and associated costs are not significant contributors to health care costs as they most certainly are.  However, the majority of malpractice victims never pursue a claim.

Of course, lost within this mishmash of convoluted half-thoughts and unworkable, un-informed, and simplistic “solutions” is a rather awkward truth; the individual mandate and other key parts of PPACA, currently reviled as socialism, communism, or worse, came from ideas advanced by conservative icon William Kristol, right-wing think tank Heritage Foundation, Sen Orrin Hatch (R UT) and former GOP Presidential candidate Mitt Romney, among others.

So, repeal and replace, with, what?

Fun Friday Factoids

In St Pete at CompPharma’s annual meeting, so can’t do a deep dive into any big blog-able issues…yet there’s so much deserving of attention.  Here – in easily digestible bite-size chunks – are a few items of interest.  Happy dining!

Congress will NOT fix the Medicare physician reimbursement issue this year – so they will boot that can into Q1 2014.  Why do you care? Because work comp fee schedules are usually based on Medicare’s rates, so this will affect work comp.  And, if it is changed, it will impact cost-shifting and commercial reimbursement rates.

Since Florida implemented its Prescription Drug Monitoring Program, oxycodone-related deaths have dropped 41%.  Someone remind me why the governor refused to fund this for months…

Higher medical costs in northern California appear to be driven by consolidation of the provider market.  A report in the NYTimes discusses Sutter Health’s high charges and the lack of justification therefore, Sutter is one of the most costly providers in the nation.

A hearing in Pennsylvania on physician dispensing in work comp included a discussion of the higher medical costs, longer disability duration, and higher indemnity expense associated with doc-dispensed drugs.  Reportedly one of the legislators displayed an ad from a dispensing company’s website that discussed how dispensing docs could make $100,000 without doing any work.

Enrollment in Exchanges has picked up dramatically; according to the Kaiser Foundation, as of this time last month 1.3 million applications had been completed, a quarter of those from California.  WIth over 26,000 enrollments in just the first two days of December, there’s a lot of pent-up demand yet to work its way thru the system. We shall see if the back end, where data gets shared with insurers, holds up. Jury is out…

 

Obamacare’s dilemma, simplified

The healthcare.gov website is not going to be fixed by the end of the month.

As a result, most people will NOT be able to enroll in commercial plans that start January 1.

Many of those who are already insured got cancellation notices, so their policies will not exist after January 1.  And it will be very, very difficult for insurance companies to postpone or “cancel” those cancellations. Not because they don’t want to but because they can’t.

Insurance companies have spent years preparing for January 1; programming computers, developing policy language and getting it approved by regulators, setting up new provider networks, cutting deals with providers; setting up EDI links with the government and banks, and building new reimbursement and clinical management programs. All are ready to go, tested, checked, and waiting for the ball to drop.

They can’t just undo this; they can’t call “Time Out” or hold off, or stop.  The train is leaving the station, and there’s nothing the President or anyone else can do to stop it.

Which puts the Administration in a very poor position, albeit one they built themselves.  The website won’t be ready, and the current policies won’t be in force as of January 1.

Is there a solution?

Not that I see.

What does this mean for you?

Depends on your state.  I’ll address the impact on workers’ comp in a future post.

Big doings in the world of opioid management…

While we’ve been marveling at the truckloads shiploads of dollars investors are pouring into work comp service companies, there’s been a lot more activity of much greater import out in the real world.

Here’s a quick update on the latest news in opioids, and opioid management.

Barry Meier continues to do the best national reporting on opioids; his piece this morning on moving Vicodin(r) et al to the Schedule II list is great reporting indeed.

Why is this necessary?  Mike Whitely’s eye-opener in WorkCompCentral summarizes a report from the Trust for America’s Health on stopping the prescription drug abuse epidemic. Couple of most distressing items:

  • more than one of every ten teens reported “non-medical” use of prescription drugs
  • Drug overdose deaths doubled in 29 states over ten years
  • Drug overdoses now kill more 25-64 year olds than motor vehicle accidents

A big part of the solution is instituting real prescription drug monitoring programs; Kudos to the Pennsylvania House for passing (191 – 7!!) legislation addressing prescription drug monitoring; a new bill is in progress that would require docs and dispensers to report controlled substance scripts within 72 hours, with the directive that a “real-time” reporting requirement should be implemented as soon as possible.  (hat tip to work comp central).

TPA Broadspire is doing good work on opioids; they report encouraging results as almost three-quarters of claimants in their pain management program reported a significant decrease in drug usage (mostly opioids). These were mostly long-term claimants, with an average claim duration of 8.1 years.

And we’re about to wrap up the work on our Survey of Opioid Management in Workers’ Comp; a webinar is scheduled for November 12 at 2 pm; I’ll get sign-up info out tomorrow.

Thanks to CID Management for sponsoring the Survey.

Someone please explain this…

If the medical device tax isn’t repealed, a few dozen Congresspeople are willing to default on our debt, potentially causing international financial turmoil and a major recession.

That’s reality, or at least what passes for reality these days.

Here’s the path we’ve trod to get to this point.

  1. A few dozen Congresspeople refused to pass a budget by October 1 because they wanted PPACA killed.  The Speaker of the House, averse to violating the “Hastert Rule”, went along with their demands.
  2. The Senate refused to comply, and anyway, the President would not have agreed.
  3. As public opinion turned increasingly against the few dozen, and their increasingly untenable position became increasingly obvious they changed their demands, from a delay to:
    • a delay of PPACA implementation, then
    • a repeal of the medical device tax, then
    • a delay of the enrollment mandate, then
    • a demand that Congresspeople and their staffers would have to pay all their premiums themselves; then
    • a delay of the employer reinsurance tax…
    • now PPACA appears to be off the table, and instead there’s a demand for some budget talks around addressing the sequester and long-term entitlement cuts.

Sure, some of these were mixed in together, and others were sorta kinda coupled, but you get the picture.

As some readers have pointed out, the Congresspeople’s actions are, in fact, legal.

They are also mystifying.  Sure, the most vocal come from very safe districts where their actions seem to reflect the current will of their voters, but is delaying the medical device tax really worth defaulting on the national debt – and the all-too-likely consequences of a default?

Medical device tax or… world-wide financial meltdown, immediate return to 2008 recession…

Of course, now that the GOP is on the run and desperate for a deal, any deal that allows them to declare victory (maybe changing PPACA’s health plan colors from bronze silver and gold to red, white, and blue?), Senate Majority Leader Reid is playing his own brinksmanship game, demanding a roll-back of the sequester.

The GOP won’t agree to that, so we’ll likely get just what we would have had if this whole stupid pointless embarrassing mess hadn’t even happened – a short-term deal late on October 16 (that’s tomorrow!) with some nice words about negotiations over long-term entitlement reform and revenue generation.

What does this mean for you?

Elections have consequences.

Status report: Obamacare implementation

Here’s where things are.

Briefly, my best guess is less than a hundred thousand folks have enrolled in insurance via the Exchanges so far.  That’s based on reports I’ve seen from several sources identified below.

And, there are a lot of health plans participating, with 2/3 of states offering 4 or more health plans, each with multiple benefit plans.

Not surprising, as Massachusetts’ experience with their “exchange’ indicates people accessed their system about 18 times before actually enrolling.

Those shopping for coverage are finding lots of options, as 2/3 of the states have four or more health plans selling thru the Exchanges, while eleven of the most populous states have ten or more plans participating.

Carrier Participation Map - Final

Of course, PPACA implementation started back in 2010, with the elimination of lifetime caps on medical expenses, extension of coverage to dependents up to age 26, increased reimbursement for primary care under Medicare and other interim actions.

What does this mean for you?

Not surprisingly, there’s far more shopping than buying, and a raft of technical and capacity problems on the Exchange servers.  As the tech issues get fixed, we’ll see more traffic and more enrollees, especially in late November.

Until then this will quickly become yesterday’s news.