A work comp exec’s MUST read

The health care “system’s” problems are even worse for worker’s comp.

That’s the conclusion I reached after I finally got around to finishing “Overkill“, Atul Gawande’s latest piece on the clustermess that is the American health care system.

The top takeaway is this – there is huge over-diagnosis of medical “problems” due to an over-reliance on fancy diagnostic technology, technology that far-too-often identifies physical abnormalities that have little to no effect on one’s health or functionality.

An excerpt makes the point:

Studies of adults with no back pain find that half or more have degenerative disk disease on imaging. Disk disease is a turtle—an abnormality that generally causes no harm. It’s different when a diseased disk compresses the spinal cord or nerve root enough to cause specific symptoms, such as pain or weakness along the affected nerve’s territory, typically the leg or the arm. In those situations, surgery is proved to be more effective than nonsurgical treatment. For someone without such symptoms, though, there is no evidence that surgery helps to reduce pain or to prevent problems. One study found that between 1997 and 2005 national health-care expenditures for back-pain patients increased by nearly two-thirds, yet population surveys revealed no improvement in the level of back pain reported by patients. [emphasis added]

More specific to workers’ comp, the good folks at Liberty Mutual’s Institute for Research found claimants with back pain with:

early or non-indicated MRIs led to a cascade of medical services in the six-month period post-MRI that included electromyography, nerve conduction testing, advanced imaging, injections or surgery.

These procedures often occurred soon after the MRI and were 17 to nearly 55 times more likely to occur than in similar claims without MRI.

“Being a highly sensitive test, MRI will quite often reveal common age-related changes that have no correlation to the anatomical source of the lower back pain,” said one of the researchers, Glenn S. Pransky, MD, Center for Disability Research, which is part of the Liberty Mutual Research Institute for Safety, in a statement.

According to Pransky, evidence-based practice guidelines for lower back pain recommend against early MRI except for “red flag” indications such as severe trauma, infection or cancer.

Dr. William Gaines, associate national medical director, Liberty Mutual Commercial Insurance Claims, said that the National Committee for Quality Assurance and the American Board of Internal Medicine have emphasized for years that overuse of imaging does not represent good care for low back pain.

What does this mean for you?

Our health care system is very, very good at finding physiological and anatomical “problems”.  Unfortunately, it is also very good at assuming those findings actually indicate an underlying and significant pathology.

 

Friday catch-up from the (still) frozen northland…

Hello all!

Well, (or rather, HELL!) it’s snowing in upstate New York…hopefully it’s a bit brighter where you are. Lots happened this week, so here we go.

First, this really needs a series of posts, but it’s so important that better fast than thorough. There is yet more evidence that the earning power of the vast lower-middle class (and poorer folks too) has been steadily declining.  And that’s a major issue for workers’ comp. Here’s the money quote from Neil Irwin’s piece in the NYTimes:

there really is a shift away from the sectors where less-educated workers can earn a decent living. [emphasis added] In 1990, 40 percent of the prime-age male workers without a high school degree worked as operators and laborers, a number that declined to 34 percent in 2013. Jobs in food service, cleaning and groundskeeping nearly doubled in the same span, to 21 percent from 11 percent. But it wasn’t an even trade: Pay for operators and labors was $25,500 in 2013, compared with $20,400 for the food, cleaning and groundskeeping category.

You’re not imagining it. The jobs that are being created for less-educated workers really do pay less than the ones that are being lost. [emphasis added]

What does this mean for work comp?   A few things come to mind.

  • if good-paying jobs continue to disappear, it is going to be increasingly hard to re-employ injured workers in positions where they earn the same pay they did pre-injury
  • comp premiums may decline slightly due to lowered covered payroll
  • we may see more longevity and less movement among workers currently in those jobs, meaning there are fewer opportunities for experienced workers to get re-employed
  • it’s theoretically possible that people working at jobs that are disappearing may see workers’ comp as a safety net

The net is the work comp system is going to be dramatically affected by this economic trend.  We need to be talking about it now, thinking about the potential implications, and seeking solutions – now.

The Catamaran acquisition of Healthcare Solutions was followed almost immediately by United Healthcare’s announcement that the company is going to buy Catamaran. Personally, I think HCS was the linchpin of the Catamaran – Optum deal; HCS’ unique position in the WC PBM, bill review, network, and related businesses made Catamaran so darn attractive UNH ponied up $14 billion just to get in the WC game.

Well, maybe not.  More seriously, UNH will own the third largest PBM, trailing only CVS/Caremark and Express Scripts, Inc.  The combination of OptumRx and Catamaran will fill about a billion scripts this year.  Catamaran itself was a relatively small player a decade ago; it grew rapidly via acquisition and diversification (along with ESI it is the only PBM active in the work comp and auto sectors).

With this transaction, UNH continues to diversify; the chart on page 2 provides a rather striking view into just how diversified this former HMO company has become.  For some, $14 billion seems like a lot of cash.  Not to UNH; this is a company with revenues that will likely hit close to $150 billion this year.  For you work comp folks, that is about 180% of total US WC premiums. 

(full disclosure – I owned a tiny bit of equity in HCS from a prior role on the Advisory Board of predecessor Cypress Care)

The good folks at Washington Labor & Industry (and other state agencies) are asking for public comment on their revised Prescribing Guidelines for Opioids. The pdf briefly summarizes changes from current guidelines, and is well worth your perusal.  Kudos to the Agency Medical Directors’ Group; they continue to lead the way for the rest of the country.

There’s a rather troubling piece in the latest Health Affairs about the cost and implications of over-diagnosis and over-treatment of breast cancer.  As one who is somewhat troubled by the proliferation of pink everything everywhere (cue the calls for my summary execution as insensitive and uncaring), I see this as evidence of a movement in danger of running amok.  From the article:

The average expenditures for each false-positive mammogram, invasive breast cancer, and ductal carcinoma in situ in the twelve months following diagnosis were $852, $51,837 and $12,369, respectively. This translates to a national cost of $4 billion each year. The costs associated with false-positive mammograms and breast cancer overdiagnoses appear to be much higher than previously documented. Screening has the potential to save lives. However, the economic impact of false-positive mammography results and breast cancer overdiagnoses must be considered in the debate about the appropriate populations for screening. [emphasis added]

Is breast cancer a major problem? Yes. As a major killer of women, and a disfigurer that does deep psychological damage, breast cancer is one of the major public health issues nationally.  That said, telling women who DON’T have breast cancer they do, and treating them for it, is awful indeed.

Finally, Darrell Bruga of LifeTEAM asked me if there is any technology platform already being utilized in workers’ compensation that is designed with the end user being the INJURED WORKER? Does anything like that exist where the claims examiner, caae manager, etc interacts with the injured worker digitally to communicate, provide information, provide health information, etc.

I don’t know of any such app; if you do please let me know – email at jpadudaAThealthstrategyassocDOTcom or just comment below.

The Everything-PPACA edition of Health Wonk Review

The ongoing rollout of the Affordable Care Act is the primary subject of this edition of Health Wonk Review – but there’s much more from the best of the health policy blogosphere – all summarized here for your reading pleasure!

PPACA rollout

Brad Flansbaum has written a thoughtful and compelling perspective on the impact of reimbursement changes on physician compensation, posing tough questions and seeming to come down on the side of longer/harder/tougher/knottier vs slam-dunk.

The coverage gap (wherein folks  have to pay a penalty if they go without insurance coverage) is covered by Louise Norris at Colorado Health Insurance Insider – in fact she’s more on the ball than any of the other sources folks normally turn to.  One key – if “your gap in coverage includes three or more months, you’ll be assessed a penalty for the entire period without health insurance; ” so being covered sometime during the fourth month doesn’t meet the test.

BTW, the IRS will assess a penalty for those going without coverage – and Louise has the skinny on those details too.

Bob Laszewski highlights the low consumer ratings of Covered California and the massive dollars poured into the site by the Feds.  Bob notes coverage expansion has been far below estimates, while costs have been far above.  Ouch.

Friend and colleague Hank Stern continues his merciless coverage of PPACA rollout with InsureBlog’s entry this biweek – a quick summary of notable news about the “ObamaTax”.  Double Ouch…

Another coverage gap is addressed by Anthony Wright of Health Access California.  Anthony reports on efforts by CA legislators to expand coverage to include undocumented workers in the Golden State.  Pending changes in immigration may well increase the number of people eligible for coverage under PPACA.

Some want to kill PPACA; others, more politically savvy, want to replace it. Writing in Health Affairs’ blog, Tim Jost discusses the various ideas/thoughts/concepts circulating among GOP Senators and Congresspeople, concluding that it isn’t really possible – given the GOP’s antipathy for the core goals of PPACA – to “replace” it.  And, most of the ideas floated to date won’t do much to increase coverage or reduce cost.

From MCM I submit a brief post detailing the cost trends for private health insurance, Medicare, and Medicaid.  Notably, the “Ms” have lower trend rates than private insurers.

SGR is dead!

Pigs will fly.  Lions and lambs will lie together.  The Cubs will win the World Series (well, that may be a stretch).  Those are events as equally unlikely as Congress agreeing on a bipartisan fix to Medicare physician reimbursement. Writing in medicareresources.org, the estimable Louise Norris contributes another worthy piece dissecting the implications of the replacement of the much-reviled SGR with small, but predictable increases in physician pay.  Of note, there are also incentives to improve quality, extension of some niche health plans, and continued emphasis on increasing transparency.  All good things, which just shows things can get done on Capitol Hill...

Our favorite health care economist, Jason Shafrin, contributes a quick take on the passage of a Medicare reimbursement “doc fix” – a fix that, while it adds $141 billion in additional cost over the next ten years, also simplifies other programs intended to reward top-performing docs.

Stuff you need to know

Julie Ferguson has a sobering piece on workplace suicides, noting law enforcement, farming, and auto repair are the industries most affected. Julie teases out the common factors, provides additional insight into specific industry risks, and focuses on the need for mental health support for family farmers.  A great piece.

Returning from the annual HIMSS conference, contributor John Lynn shares his thoughts on what’s going to happen to Health IT in the near future; with implications for new entrants, entrenched old-line vendors, and the mid-tier outfits alike.

This biweek’s “hey, I didn’t know that! that’s pretty cool” moment comes from Jaan Sidorov MD, who reports that:

persons of low socioeconomic status are more likely to have smart phones vs. the “banked” population. They may not have a checking account, but, compared to other segments of the population, they are more able to use these devices to access and manage their “e”care. [emphasis added]

HWR veteran Roy Poses MD has a tough piece on hospital CIO’s perspectives that they, the CIO, “own” patient engagement.  Roy’s take is this is part of the problem with health care; generic managers who don’t actually deliver care think they “own” it.  Well worth a read.

Finally, One Happy Nurse reveals why a 7 hour wait in the ER isn’t so bad…and she should know – she’s been working in an inner-city Level II trauma center ER for more than two years.

Whew…after almost ten years of HWR, it’s great to see the best keep getting better!

Which better controls spending – Private insurance or Medicare/Medicaid?

Before you read further, cast your vote…

Okay, a couple initial thoughts.

First, when comparing health care systems’ ability to control cost over multiple years, the best metric is the cost trend per member; this accounts for differences in demographics and membership growth.

Second, this only accounts for cost growth; not outcomes, patient or provider satisfaction, or efficiency.

That said, cost growth is the best metric to use when thinking about long term cost control, governmental budgets debt and deficits, and tax implications.

Drew Altman at the Kaiser Family Foundation has a simple graphic here that tracks cost growth over time.  The net – from 2007 to 2013, private insurance costs increased 29%, more than twice Medicare’s growth and five times higher than Medicaid.

(side note – the most recent data indicates Medicare has higher member satisfaction than private insurers…)

What does this mean for you?

If your goal is cost control, the answer is obvious.  However, personal and policy decisions are never simple.

The anti-vaccination idiocy

Penn and Teller profanely destroy the anti-vaccination case in a 90 second video well worth watching.

Unfortunately, many of the so-called anti-vaxxers won’t watch it, or understand it, or believe it.  No, they are willing to put their own kids – and everyone’s kids – at risk because of a completely wrong, now-retracted article in the Lancet purported to show a link between vaccinations and autism.

When, of course, there is NO SUCH LINK. As this group of parents with kids afflicted with autism eloquently shows…

And there’s any number of lunatics claiming vaccinations cause all type of horribles, e.g. whack-job, cartoon character Michelle Bachman’s assertion that the HPV vaccination can cause mental retardation

From the other side of the political spectrum, there are anti-vaxxer liberals who don’t get refuse to understand/outright deny the science – nice to know we all have morons in our midst…

Fortunately, people in third world countries are a lot smarter than these cretins 

We take vaccines so for granted in the United States,” Melinda Gates told HuffPost Live in January…

“They will walk 10 kilometers in the heat with their child and line up to get a vaccine because they have seen death. We’ve forgotten what measles deaths look like. We’ve forgotten … the scourges they used to be. But in Africa, the women know death in their children and they want their children to survive.”

The anti-vaxxers claim it is their right to jeopardize their kids – and yours. Fine.  While one could make a compelling case that their stupidity is grounds for a charge of child abuse, there’s a much bigger public health issue here, one that is all too obvious now that these idiots have allowed their kids into public spaces where they’ve infected others.

That case is simply this – if you choose to do, or not do, something that creates a significant public health risk, then you get to pay for the consequences.

Monetarily, criminally, civilly.

DWI, knowingly infecting partners with STDs, failing to keep firearms locked up, texting and driving, all are akin to the anti-vaccine movement.  And all come with legal consequences.

What does this mean for you?

Be careful, stupidity didn’t die out with the Middle Ages.

Friday catch-up

The first week back from a couple of pretty slow weeks is always hectic – here’s a brief recap of what happened while we all were working.

The big news in the comp world is Congress passed the TRIA extension.  The President will certainly sign it, and we all can relax just a bit.  The six-year extension, which passed with overwhelming support in both Houses, includes a higher deductible and lower Federal cost-share in each of the next five years. The result will be more risk especially for smaller insurers who have less ability to cover potential claims from a major incident.

That said, the 9/11 attacks were just about the worst-case scenario, and the industry was able to absorb the financial hit without too much difficulty.

actually, that wasn’t the biggest news.

That was yet another announcement that the employment market is accelerating ; a quarter-million MORE jobs were added last month, lowering the unemployment rate to 5.6 percent. That bodes well for the insurance industry; the recent evidence that wages are improving is more good news.  Consumers’ energy costs down are dramatically, effectively increasing the average person’s annual wages by about $1000.

Expect consumer spending to increase; if moves to reduce the cost of housing bear fruit, that will help the construction and durable goods industries as well.

Here’s hoping our politicians don’t screw this up…

Thanks to Rob McCarthy for the heads-up on an op-ed piece by Ezekiel Emanuel recommending we skip that annual physical – they cost billions but there’s little evidence they have a positive impact on health or cost. Here’s the conundrum; from a societal perspective Dr Emanuel’s prescription makes sense, but as individuals we make decisions based on our own perceptions of risk and value...

A devastating piece about what it’s really like to be poor is making the viral rounds.  If you have ever blamed someone for being poor, having “too many kids” by “too many fathers”, for not using Medicaid or a free clinic, for smoking or not doing anything else you think they shouldn’t do, and not doing the things they should, read it. The whole thing. As one who is guilty far too often of these judgments, it was a virtual ice bucket in the face. 

PPACA – another perspective

Let’s stipulate that the US health care “system” was and is a mess.  Our costs are about twice as high as other industrialized countries’, outcomes are not as good, and for consumers and purchasers, it is confusing as hell.

The question is, is PPACA making it better?

There’s no question the PPACA has a lot of flaws, several of which are being used for a series of legal challenges.  There’s a reason for that; PPACA wasn’t supposed to be the be-all and end-all bill.

The legislation that was eventually passed originated in the House, and it was only passed “as is” because Scott Brown won the Massachusetts Senate election and his seating forced passage of the House bill by the Senate.  (Brown’s election gave the GOP 41 seats, allowing for a filibuster)

I won’t get deeper into the political history of PPACA passage; wikipedia has a very good synopsis for those interested in more history. The net is, PPACA is here.  It is not going away.  And there are no alternatives out there that make any sense and/or have any chance of passage and adoption.

So PPACA has a lot of warts – so does pretty much every Congressional legislation.  We may not like it, it may drive us nuts, but it’s reality. Our legislative process is sausage-making at its finest. Or worst, depending on your perspective.

Pre-PPACA, our health care “system” was hurting our international competitiveness, driving up the Federal deficit and state and local expenditures, covering fewer and fewer people, and delivering lousy care to a large part of the US population.  Now, several years into passage, we’re starting to see indicators PPACA is having the desired effect.

Medical inflation remains relatively low.  I, and others, would argue that is in large part because of the systemic changes driven by PPACA.

Some factoids:

  • last year health care spending grew 3.6% – the lowest rate since 1960.
  • over the last four years, health care inflation has tracked GDP growth – compared to prior years when it was consistently higher than the GDP growth rate.
  • the system is getting better – serious medical errors declined by 17% between 2010 and 2013 – saving about $12 billion.
  • Medicare inflation is flat.  In fact, CBO projections for Medicare expenditures in 2019 have dropped by $95 billion over the last four years. As Medicare utilization isn’t really affected by the economy, that’s a pretty solid indicator that the program is more sustainable than we thought just a few years ago.
  • Medicaid costs are up – as we’d expect them to be.

Overall, things are improving, rather dramatically – but not without pain.  Narrow networks, lower earnings for some doctors, higher insurance costs for some employers and consumers, a financial squeeze for many hospitals, all are real and painful.

What does this mean for you?

Fixing very big problems is ugly, thankless, and rife with collateral damage.  It’s also absolutely necessary.

 

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.