Express Scripts buys myMatrixx – a smart move for both

This isn’t surprising; workers’ comp is a very mature industry which demands consolidation.  As the market shrinks, winners will be those with size, scale, and buying power.

myMatrixx has a very strong brand, excellent customer implementation and service, strong clinical capabilities and a solid portal. What it doesn’t have is buying power, and the biggest payers shied away from myMatrixx as it is one of the smaller PBMs with a dearth of hundred-million-dollar accounts.

Express Scripts’ work comp division has scale, a core group of really good professionals, and a few marquee customers.  What it doesn’t have is a strong brand image and the resources demanded by payers increasingly relying on their PBMs for all-things-pharmacy; opioid management, data reporting, patient enrollment and monitoring, physician profiling, high-risk-claim flagging.

Artemis Emslie will assume overall leadership.  I’ve known Artemis for 25 years; she has a very good reputation in the industry and knows work comp pharmacy deeply. As she takes over what is now a very large work comp PBM, I’d encourage her and her new bosses to consider a couple things.

Keep the myMatrixx brand.  Brand is all powerful, and the market message that will be heard is things are changing, ESI is investing in and providing resources for work comp. That is critical.

Keep doing the smart marketing mM has done for years – rides from airports to conferences, the Phil Walls webinars, the overwhelming focus on pleasing customers.

Get out to all customers today, and listen listen listen.  Don’t inundate them with corporate speak and blather, rather ask questions, dig deep, and document everything. This is a great opportunity to hear directly from customers – a very valuable opportunity.

Staff at both companies are excited about the merger; I’ve spoken with several who are pretty pumped.  This itself is unusual and speaks to their inherent grasp of each company’s challenges.

While terms weren’t disclosed (they likely will be at some point as ESI is a public company) my sources indicate the price was in the $300 – $350 million range, a hefty valuation indeed.

What does this mean for you?

The whole is rarely greater than the sum of the parts.  In this case, it will be – if the new entity has adequate resources and sticks with what made mM successful. A stronger PBM with more capabilities is good news for all payers.

 

 

It’s not the price of the pill!

Some states and regulators are slashing workers’ comp pharmacy reimbursement. This is a huge mistake.

Work comp drug costs have dropped 11 percent over the last 6 years. Work comp PBMs have successfully reduced their revenues and profits, benefiting their patients, customers, employers.

(Contrast this with non-WC drug costs which have gone UP every year)

(Chart from CompPharma 2016 Survey of Prescription Drug Management in Workers’ Compensation; trend indicates decline in annual drug spend)

And for this, they are getting hammered.

Workers’ comp PBMs have done great work reducing the inappropriate use of opioids, protecting patients from deadly drug combinations, and cutting overall drug spend in the process. Fewer new patients are getting opioids and opioid spend is down significantly. Yet for reasons beyond understanding and contrary to all evidence, regulators in some states have decided that drug costs are now too high, so they are drastically slashing fee schedules.

This is not going to end well.

Managing prescription drugs is very labor- and technology-intensive, requiring

  • expert, highly trained, and very specialized staff, and
  • constant updating of critical information systems.

When regulators slash reimbursement, PBMs can’t afford the pharmacists, IT staff, business analysts, customer service personnel, legal and compliance experts, systems, and resources that have been instrumental in delivering better patient care and lower costs.

Folks, it costs money to do this. And fee schedules based on Medicaid ignore the fundamental differences between managing workers’ comp and Medicaid patients.

Without adequate reimbursement, we’re going to return to the bad old days of “fill it and bill it.”

A bit more explanation.  Work comp PBMs have dozens of clinical pharmacists focusing on:

  • developing, managing, and updating formularies for clients and individual patients
  • working with prescribers to alter patients’ drug regimens based on evidence-based guidelines
  • working with employers and insurers to develop and implement prior auth, medical management, and appeals processes
  • implementing comprehensive opioid management programs to prevent addiction and dependency
  • intervening when patients are prescribed multiple opioids, benzos, muscle relaxants, and other deadly combinations

Then there are the IT folks working on data links so claims adjusters get early, customized communications about potential issues, alerts when patients are prescribed long-acting opioids, information about multiple prescribers and/or multiple pharmacies, and dozens of other potential problems.  Problems that may kill patients, prolong disability, addict patients.

They work with PBMs’ business analysts mining data to find doctors with patterns of potentially-inappropriate prescribing patterns – such as the worthies in LA County.

Their legal and compliance teams work with insurers and employers to figure out what can and cannot be done to improve patient safety, alert law enforcement to potential fraud or diversion, and inform stakeholders of the frequent changes in all 50 states’ policies and requirements around work comp pharmacy.

And the front line – the customer service/patient communication staff that talks directly with prescribers, pharmacists, patients, adjusters, families, employers. These women and men have to be patient, kind, thoughtful, educated, knowledgeable.  It’s not like you can just put on a headset and start chatting about morphine equivalents, state regulations, the respiratory implications of increasing opioid intake, or polypharmacy. Initial and ongoing training and education is critically important.

There is much work left to do, as there are still hundreds of thousands of work comp patients taking way too many opioids. These are the most difficult, complex, time- and resource-intensive patients. They are also the patients that are going to be harmed most by the blunt instrument that is fee schedule reduction.

What does this mean for you?

Slashing fee schedules hurts patients, employers, and taxpayers.

If this continues, expect higher overall drug costs due to greater utilization, increased opioid prescribing and dispensing, and longer disability durations.

Note – as president of CompPharma, at some point I may be financially affected by big cuts in fee schedules. Hasn’t happened yet, and it may not.

Quick takes…

Crazy busy here at the intergalactic HQ of Health Strategy Associates, so I’ve been slacking on my blogging duties…

here’s what came across the virtual desktop of late.

Blockchain!

several articles of note – save them, file them, read them.  You WILL have to understand blockchain, and sooner than you might think.

Blockchain and the sharing economywhich will include insurance

What will blockchain mean for jobs? One expert says: “30–60% of jobs could be rendered redundant by the simple fact that people are able to share data securely with a common record.”

JobLock

The sharing economy depends on the ability of entrepreneurs to leave big employers with good healthplans. If ACA is repealed and/or individual insurance markets tighten up, the gig economy is going to get slammed.  “Job lock” is real; this from HealthAffairs

Without the ACA, there will be fewer Howards who start their own businesses, resulting in fewer jobs. That’s why anyone who tells you that the ACA is a “job killer” is flat wrong.

Drugs

Express Scripts’ new work comp drug trend report is out – key highlights are:

  • drug spend is down 7.6%
  • opioid utilization is down 11.1%

What this means – work comp PBMs and payers’ efforts to reduce opioid over-utilization are paying off, and this is excellent news for patients and employers alike.

HOWEVER, with half of all patients receiving at least one script for opioids, we’ve still a long way to go.  No vacations folks, now’s the time to keep a relentless focus on reducing opioid usage – especially for patients who’ve been on these drugs for months.

Truth is, some patients demand specific drugs, and it’s difficult for docs to convince them otherwise. And, it’s notoriously difficult to get physicians to change their habits...they are human after all.

Hawaii’s legislature is considering legislation to limit physician dispensing.  Thank goodness the Clifford Yees of the world seem to be sidelined – at least for the moment.

Back tomorrow to a deeper dive into a key issue…

On controlling opioid use, work comp leads the way

Outside the workers’ comp world, opioid utilization and costs are increasing significantly, driven by greater use of long-acting opioids.

According to a Prime Therapeutics study of 15 million commercial insurance claims, short-acting opioid prescriptions dropped over a 15-month period, but utilization of all types of long-acting opioids increased.

In contrast, we work comp Neanderthals have been driving down opioid usage for years.

a few data points…

What accounts for the disparity between workers’ comp and group health?

Work comp payers care deeply about outcomes, function, and return to work. Patients taking opioids are much less likely to return to functionality than those on NSAIDs or no drugs at all.

Some payers have dedicated units focused on chronic pain and prescription drug management. Others rely primarily on their PBMs, but almost all insurers and TPAs have been working this issue for years.

PBMs working in the comp sector dedicate a lot of resources to managing opioids. Investments in analytics, PBM – payer interfaces, staff training, clinical guidelines and the like are costly but drive these results.  Staffing – clinicians, pharmacists, data analysts, program managers, highly trained customer service staff – focus on this issue 24/7.

That’s not to say we don’t have a very long way to go; data from CompPharma’s annual survey of prescription drug management in workers’ comp and NCCI indicate spend for controlled substances (mostly opioids) accounts for about 28% of total WC drug spend.

I’m gong to be speaking at this month’s National Heroin and Prescription Drug Abuse Summit on what the real world can learn from workers’ comp.  The main takeaway -despite significant regulatory, economic, and legal barriers inherent in workers’ comp, payers and PBMs have made significant progress.

It’s time for the real world to get on board.

What does this mean for you?

We CAN reduce opioid use – it just takes dedication, resources, and persistence.

Who’s going to pay for the Opioid Crisis?

Insurers are loosening policy language to allow more treatment for opioid addiction. Treatment centers and providers are opening, expanding, and increasing services to meet growing demand. Workers’ comp requires treatment for those addicted or dependent on opioids, leading to higher costs for employers, insurers, and taxpayers. Medicaid will be saddled with much of the burden, as addicts often lose their jobs and have no other coverage – so we taxpayers will foot the bill.

We know who’s going to be writing the checks – ultimately you and me and our nations’ employers in the form of higher insurance premiums, higher taxes, and lower earnings for employers.

That’s wrong.  And not just-kinda-sorta-of-that’s-too-bad wrong, but ethically, morally, and maybe even legally wrong.

The purveyors of this poison have made billions by lying, deceiving, and killing our fellow citizens.  By crushing families, destroying towns, bankrupting businesses, ripping apart our social fabric.

And we’re left paying the bill in dollars, deaths, and soul-searing pain.

I have a modest proposal.  Make the pill-pushers pay. 

Congress should pass a bill, and the president should sign it, making the opioid industry pay for its sins. Treatment coverage, a flat amount for each person that died on their poison, and reimbursement for all past costs incurred by individuals, families, taxpayers, and employers.  Bankrupt the industry, take every penny the owners have, and use it to help those they’ve harmed.

Let’s call it the Corporate Opioid Responsibility Payment Service Establishment Act. CORPSE for short

What does this mean for you?

Make the bastards pay. 

 

 

Finally.

New Hampshire and the Feds are going after opioid manufacturers with a vengeance.

NH State law enforcement has reached a $3.2 million settlement with fentanyl drug manufacturer Insys and is pursuing investigations against Purdue Pharma, Actavis Pharma, Janssen Pharmaceuticals and Teva Pharmaceuticals.

The FBI indicted six senior Insys executives last month on charges of racketeering.

And actions have been taken against the company’s sales force and/or prescribers in several other states as well.

Insys’ Subsys fentanyl drug was narrowly approved by the FDA for breakthrough cancer pain. In what has become an only-too-successful marketing strategy, allegedly Insys aggressively promoted Subsys for non-cancer treatment purposes.  Reports indicate only 1 percent of Subsys scripts in New Hampshire were written by cancer doctors.

The Granite State has the highest death rate from fentanyl overdose in the nation.

A Physicians’ Assistant in New Hampshire was allegedly paid speaking fees as a backdoor way of incentivizing him to prescribe Insys’ Subsys(r) a version of opioid fentanyl.

Reports indicate of the 100,000 doses consumed in NH, this one PA, Christopher Clough, prescribed 84% of them.

What happened in New Hampshire is directly related to Insys’ marketing practices.  Make no mistake, this was all about profits, regardless of the damage to patients, families, society, kids.

This from the NYTimes:

“As Subsys grows more mature, we expect the number of experienced patients to grow,” Michael E. Faerm, an analyst for Wells Fargo, wrote last year in a note to investors. “As the experienced patients titrate higher, the average dose per prescription should increase.”

The former Insys sales representatives said they were paid more for selling higher doses…

What a great business. A highly addictive drug creates more revenue for the manufacturer and for sales reps as patients need more and more and more to get “relief” – or get high.

New Hampshire has subpoenaed other large opioid manufacturers who have refused to comply with the demand to provide materials. It’s highly likely Purdue, Teva et al will be compelled to comply when higher courts rule.

What does this mean for you?

A bittersweet moment indeed, but at long last corporate crooks are being criminally charged for their actions that killed people to create profits.

Here’s hoping they are convicted and sentenced to long terms at awful places.

 

Beware of “astroturf”

As “Astroturf group” is one that looks like a “grassroots” organization that is actually founded, funded, and an advocate for a large organization.

Big pharma is infamous for the practice; one great example is the American Pain Foundation, an opioid-peddling outfit masquerading as a patient advocacy organization (thanks to WCC’s Elaine Goodman for the reminder).  The APF was shut down after an expose by ProPublica’s Charley Ornstein and Tracy Weber.

The APF is instructive.  90% of its funding came from big pharma and medical device companies.

Endo, J&J, and Purdue Pharma of OxyContin fame were major backers.  This is the same Purdue that pleaded guilty to federal criminal charges in 2007.  Sadly no Purdue executives went to prison despite thousands of deaths and millions of addicts from opioid over-prescribing.

And ruined communities – this was once a trailer occupied by a heroin dealer in Kentucky. (Credit HuffPo)

burnt-house-64a18ea387dc25ab789335b313810e57

APF got both the Joint Commission – THE healthcare facility accreditation organization – and the Federation of State Medical Boards – to send letters and publish “guides” and other materials promoting pain as the “Fifth Vital Sign”, a brilliant marketing ploy that required physicians to ask about – and treat – pain.

Their reach extended into the Veterans Administration and hundreds of other organizations. The Fifth Vital Sign campaign, backed almost exclusively by opioid manufacturers, created the opioid disaster we are living thru.

This is not yesterday’s news it’s happening today.  In many state capitals the opioid industry remains a powerful and insidious force promoting opioid use.

The damage done is incalculable – hundreds of thousands of dead people, millions of addicts, destroyed families, devastated communities.

montvilleopioidvigil

Why discuss this now?  Because big business is ascendant.  With the incoming administration focused on reducing regulations and oversight across pretty much every industry we will undoubtedly see Astroturf groups proliferate.

What does this mean for you?

Our families and our towns cannot afford another opioid epidemic.

Halloween catch up

Off to New Orleans for client meetings; should be interesting spending Halloween evening downtown.

A couple tems of note that deserve mention.

Over the weekend 178 GOP and 1 Dem representative called on CMS to stop with all the value-based stuff. Claiming the agency is overstepping its bounds, a letter signed by these worthies evidently wants Medicare to return to fee for service.

In a word, this is dumb. FFS is a big reason health care costs are out of control while quality is spotty at best. Fiscal prudence would seem to demand rapid adoption of value-based care. I know taxpayers will be far better served when more care is based on what actually works, not on what providers can bill for.

CompPharma’s annual Survey of Prescription Drug Management in Workers Comp will be out tomorrow at CompPharma.com. Big news is respondents’ drug costs dropped 8.7% in 2015. Opioids are still the biggest concern and compounds the top emerging issue.

Finally it looks like occupational injuries declined yet again; the Department of Labor reported the injury rate dropped from 3.2/100 to 3.0.

That is good news indeed – especially for those workers who didn’t get hurt.

Hope your week is most excellent.

Note- sorry about no URL links; posting from my phone which makes that really complicated.

What the latest work comp drug spend means

NCCI released a study yesterday indicating drug spend for active claims increased 6 percent in 2014, driven by higher prices. That’s consistent with the finding from CompPharma’s Annual Survey of Prescription Drug Management in Workers’ Compensation, however more recent data indicates drug spend in 2015 dropped precipitously.

The chart below is from CompPharma’s to-be-released-momentarily 2016 Drug Survey; for the 30 payers surveyed (combined they account for just under a quarter of total work comp drug spend), drug costs dropped 8.7 percent in 2015.

drug-cost-trend

Two observations.

Work comp PBMs are Unicorns; incredibly rare and completely unique, their business model is based on reducing their revenue.  In a very small, totally mature industry, PBMs compete for payers’ business by showing how they will reduce drug costs, and especially reduce overuse of opioids.

What other business does that?

In addition, work comp PBMs do this without the economic levers of deductibles, copays, coinsurance, and tiered formularies that group health and Medicare PBM programs use.  In fact, non-work comp PBMs can’t fathom how they do this.

“How they do this” is thru a deep understanding of drivers, a willingness on the part of the PBM to eat the cost of drugs that a payer decides aren’t compensable or related, a lot of analytics to identify potential issues and problems, many well-trained people dealing with patients, prescribers, pharmacists, adjusters, case managers, attorneys, sophisticated clinical management programs.  All this is necessary, highly effective, and expensive indeed.

I bring this to your attention, dear reader, for a couple reasons.

First, on a per-pill basis, work comp drugs tend to cost more.  That’s because it costs a LOT more to manage work comp pharmacy than to manage group, Medicare, or Medicaid.

Second, slashing fee schedules to Medicaid reimbursement means PBMs can’t afford to keep driving down costs and reducing opioid usage.

What does this mean for you?

PBMs and payers are doing great work addressing a major driver of work comp costs and disability; below-break-even fee schedules will force them to become pure transaction processors, something employers, taxpayers, and patients can ill afford.

Note – I am president of CompPharma.

What its like fighting the opioid industry

I’m struggling to find an analogy that fits how one-sided this fight is.

it’s not a knife-to-a-gunfight thing; at least you could throw a knife and have a chance of injuring your adversary – then run away.

it’s not a David v Goliath thing, because big pharma is VERY aware of “David’s” capabilities and vulnerabilities.

The best I could come up with is an ant vs. a boot.

ant

A couple recent articles highlight how bad our collective butt is getting kicked (thanks to Steve Feinberg, MD – a colleague and pain management doc in CA).

While publicly vowing to help roll back opioid usage, the opioid industry is spending millions to convince state legislators to slow-walk efforts to reduce opioid prescribing, weaken PDMP usage requirements.  One telling datapoint; Pharma spent $880 million on lobbying and contributions from 2006 – 2015, anti-opioid groups spent $4 million on contributions to state political campaigns AND lobbying from 2006 – 2015.

In New Mexico, efforts to curb opioid prescribing have been defeated, thanks to an overwhelming push by big pharma.  The opioid pushers hired 15 lobbyists, contributed to most members of the key Committee working on the bill, and got what they paid for.

And it’s not just overt lobbying by pharma; these bastards are funding “patient advocacy” groups like the Cancer Network, creating their own “astro-turf” patient groups, even stuffing wikipedia with opioid advocacy crap and changing entries to delete negative information about opioids.

What does this mean for you?

This…

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