Med mal’s not a factor in health care costs – more evidence

More research indicates tight restrictions protecting physicians and facilities from malpractice suits doesn’t reduce health care costs.

Three states, Georgia, South Carolina, and Texas, essentially prohibit suits unless the physician intentionally orders care that s/he knows will hurt the patient.  A pretty very high standard, and one that would – one would think – allow docs to practice care with no concern about “defensive medicine.”

That may indeed be the case, however it is also the case that there’s no evidence that this high standard reduces cost.  The research, which focused on Emergency Department utilization and costs, found tight limits on suits didn’t reduce the “cost or volume of ED care.”

Moreover, “Legal risk does not motivate physicians as much as some previously thought.” [emphasis added]

This will not still the wagging tongues in the talking heads – nothing will.  But they’ll have less to wag about.

What does this mean for you?

Question those assumptions…

Drug formularies – much needed in workers comp

Controlling drug usage in workers’ comp is – far too often – the proverbial pushing on the rope.

Sure, PBMs and payers have done a remarkable job constraining costs and reducing the initial inappropriate use of opioids. Virtually all payers use PBMs and benefit greatly from PBMs’ clinical management and pricing that is almost always significantly lower than the state fee schedule or retail price.

However…the explosive growth of compounding, the fact that a quarter of drug costs are for opioids and a third for physician-dispensed drugs, the inability of clinical staff to get many prescribing physicians to discuss potential alternative treatments, and the frustration experienced by adjusters and employers unable to resolve claims due to long-term, highly-dangerous, and counterproductive use of drugs all argue for more regulatory help.

There are two valuable and too-little used tools in the box; evidence-based guidelines backed up by strong UR and formularies. While many jurisdictions dabble in guidelines, the litigious nature of comp coupled with the imprecise and nebulous wording of regulations often results in more problems, less clarity, and more delays.

In contrast, formularies established in regulation, whether the very tight version used in Washington State or the loose one in Texas, are clear, precise, and incontrovertible.  Drugs are either allowed or not.

CWCI’s just-released study analyzes the potential impact on work comp of those two formularies.  By comparing the drugs dispensed in the Golden State to what would have been allowed by Texas or Washington, Swedlow et al have determined that employers and taxpayers are overpaying somewhere between $102 million and $541 million annually – with no negative effects.

Before some naysayer starts screaming about the unfairness of payers influencing doctors’ treatment decisions, that naysayer should understand that formularies are in place in every group health, Medicare, Medicaid, and individual health plan.  Moreover, said naysayer should READ the CWCI study, and note that a “formulary” may be “set” to require dispensing of the drug that is the lowest-cost but otherwise identical drug instead of a higher-priced-but-otherwise-identical medication – or use any one of several other “levels” to establish a somewhat more restrictive formulary.

Formularies provide better care and tighter control without compromising.  And, a major benefit would be the huge reduction in the contentious and generally pointless UR dealing with drugs…a third of California’s IMRs are for drugs.

An excellent review is in this am’s WorkCompCentral – Greg Jones has penned a thorough, detailed, and well-researched piece that should be required reading.

Medicare Set-Asides and Workers’ Comp

I’m gingerly stepping into a topic I’ve mostly avoided to date – MSAs.  I avoid it because it is mind-numbingly complex, seemingly illogical in application, and served by often-contentious vendors.

NCCI’s Barry Lipton et al just released an excellent synopsis of the MSA situation (opens .pdf) and summary of where things are today. The report focuses on the feds’ review process, wherein they examine payers’ proposed MSAs.  Based on an analysis of data submitted by Gould and Lamb and NCCI’s Medical Call database, a few of the Research Brief’s highlights include:

  • most MSAs are for Medicare-eligible claimants, with 45% over 60
  • MSAs make up 40% of the average total proposed settlement
  • Drugs make up fully half of the MSA amount
  • CMS’ processing time for MSAs has declined of late to a median of 41 days
  • The gap between submitted and approved MSAs has shruck dramatically.
  • 29% of settlements are for amounts over $200,000, while 45% of the MSA amounts are less than $25,000.
  • Most MSA settlements are paid as a lump sum.
  • More than 90% of MSAs completed in December 2012 were approved as submitted.  That came after CMS changed approval vendors in July 2012.

The report is stuffed full of great information and, for those of us who are relatively ignorant of MSAs yet encounter them on occasion, well worth a read.

What does this mean for you?

If you don’t have the time right now, put it in your research file so you’ll have it when you need it.  And you will need it.

Physician dispensing in workers’ comp is killing your financials

The cost of physician dispensing is far above the outrageous premiums the dispensers charge.  The real cost includes:

  • longer disability duration
  • higher medical expense – over and above the excess cost of drugs
  • higher indemnity expense
  • more and longer use of opioids

Lost in the conversation, ignored in legislation, and pooh-poohed by dispensers and their enablers, the research – real research by real scientists, not anecdotal BS by dispensers – proves dispensing is having cost implications far and above the cost of the drugs.

In addition to the ground-breaking work done by Alex Swedlow et al at CWCI, the folks at Accident Fund (kudos to Jeffrey Austin White) teamed up with Johns Hopkins to analyze the impact of dispensing on their claims.

The results – which will be discussed next week in an IAIABC-sponsored webinar – are striking.

Slots for the webinar are still available – it will be held next Wednesday, September 10 from 1-2 Central Time.

Kudos to IAIABC for their leadership on this.

 

 

Work comp claim reporting – why no data?

There’s very little publicly-accessible data about who reports work comp claims, via what channel.  We just finished up a brief project for a client interested in comparing their data to national benchmarks, and we found precious little data on the topic. It may be out there, but it sure is hard to find…

We know the sooner claims are reported the better; there’s some good research out there altho arguably the best – the Hartford study – is dated.  There is more info about the impact of delays in reporting on ultimate claim costs, which is certainly critical, but that’s “outcome” information.  What we don’t know is the “process” information – which helps payers understand where they stand and what they can and need to do to improve.

Payers need to know when and who and via what channel claims are reported, by type of payers, states, industries, employer sizes, class codes – if they want to set goals, figure out where to put their efforts, who to target.

In general, we learned that the vast majority of claims are reported by employers via phone.  Whilst many payers have web- or email-based reporting capabilities, these are rarely used.  Some have developed smartphone-based reporting, but with a couple exceptions (very large self-insured employers) very few claims come in via this channel.

What does this mean for you?

Should we do a Survey of Work Comp Claim Reporting?  I’m thinking this may be worthy of study; perhaps HSA should develop and conduct a quick study to gather some baseline intel on the current state of the industry.

If this makes sense to you, please say so in the comment section.

Thanks!

 

 

 

 

Workers’ comp – the near-term outlook

NCCI’s just-published assessment of work comp trends has a wealth of information, much of it well worth contemplation by anyone in the industry.

Here are a few takeaways that jumped out at me.

  • Overall the current state of the market is steady – the market and rates are firm, premiums are trending up modestly, frequency is continuing its structural slow decrease, and claims cost inflation appears to be well within acceptable ranges.
  • Employment has returned to its pre-recession level, yet the percentage unemployed remains above 6 percent.  Employment drives premium so that’s good news, however there’s plenty of room for that percentage figure to drop even more.
  • More specifically, employment in manufacturing and construction, traditionally high-premium industries, remains lower than it was before the recession.  If this picks up significantly, so will work comp premiums and rates.
  • If investment yields remain low, we may well see premiums increase as insurers seek to offset the decline in ultimate cash flow.
  • Medical trend is pretty low as well as the work comp world’s experience parallels group and governmental program results.

Which leads to the key questions – what could change the outlook from “steady”?

  • A surge in employment especially in construction will increase injury risk and premium volume.
  • Continued low investment returns may force insurers to raise rates.
  • An uptick in medical inflation – perhaps due at least in part to cost-shifting – could lead underwriters to push rates up quickly.

What does this mean for you?

Lots of ifs and maybes; fortune favors the alert.

 

 

Survey of Drug management in work comp – quick take

This is the eleventh (!) year I’ve been involved in surveying workers’ comp payers to get their take on pharmacy management.  Now that Yvonne Guibert (thank you Yvonne) has finished collecting the data, I’m working on the report.  It’s going to take a week or so, but I’ve pulled a couple highlights to whet your appetite.

  • Overall, drug spend declined for most of the 25 respondents, with some seeing percentage decreases in the double-digits.
  • In addition, total spending (across all respondents) declined as well – by about the same margin.
  • Top problem? close between opioids and physician dispensing, same as last year.
  • Biggest emerging problem? Compounds, without a doubt.
  • 21 of 25 respondents said prescription drug costs were more or much more important than other medical cost issues at their organization.
  • 88% of the 25 respondents (large, mid-sized, and small WC TPAs, state funds, and carriers) have a urine drug monitoring program in place today or will by the end of the year.

Much more to come – the data geek in me is getting all fired up about what we’re going to learn.

Thanks to the 25 organizations who spent time collecting their data, then sharing it with Yvonne.  This is not an easy task, but one that really helps all of us understand what is going on with pharmacy programs, utilization, solutions and cost drivers and how payers are addressing the issue.

Stay tuned…

Friday catch-up

Here’s the quick summary on a couple happenings in work comp this week.

The big news comes from Liberty Mutual, where long time Medical Director David Deitz will be retiring, and Frank Radack has been named VP of managed care.

David is one of the true stars in this business, and this will be a big change for Liberty.  Word is one of his regional medical directors will assume the leadership role on an acting basis; more to come on that to be sure.  Dr Deitz has a wealth of experience; he has developed and implemented evidence-based guidelines, is an extremely knowledgeable analyst, a very effective communicator to clients, prospects, and regulators alike, understands the US health care delivery system like few others, and knows work comp.  I am fortunate indeed to count him as a friend, and hope we get to work together again.

Frank is a very experienced business guy with a strong history at Liberty; he ran Liberty’s bill review operation years ago before taking over their reporting/RMIS function some years back.  His depth of knowledge about what customers want to know and what is important to them will undoubtedly help Liberty focus their managed care efforts.

Friend and colleague Todd Brown informed me (and others) that Maryland is looking for input from self-insured employers and groups on prescription drug costs.  Their survey is here.  Given the physician dispensers’s BS claims about lower costs and better outcomes associated with their nefarious practices, it would behoove any and all self-insured employers to respond to the Survey.  Like, NOW.

Adjusters are happier than we thought…

Jack’s been getting ever deeper into the world of the adjuster of late – here’s his latest post.

Over the past couple weeks Joe and I developed and sent out an Adjuster Survey to get more insight into adjusters’ (and other front-line staff’s) work life. We are looking for first hand information as website reviews and other second-hand sources can be easily misinterpreted.

Surprisingly, the response rate to date is an astronomical 24.4%.  We are delighted with our results, but we’re looking for more.

Perhaps even more surprising adjusters’ views of their work life are very positive; contradicting what I had read online prior to developing the survey.

Just over 90% of our participants claimed that their daily workload was either “manageable” or “a bit too much, but still manageable.”  We were very pleased to see that these participants were not getting overworked and that they were at least tolerating their work environment.  About 66% of the survey participants said that their work environment was “great” or even “unbelievably fun and enjoyable,” while another 30% said that the work environment was “tolerable.”

A tiny percentage – 3% of participants – claimed that their work environment was “not fun at all.”

We are data hounds here at Health Strategy Associates, and need you to help develop an even better understanding of adjuster likes, dislikes, and attitudes.

Please take roughly 2 minutes out of your day (that’s all it takes!) and fill out our survey.  In appreciation of your participation, you will receive a $5 Starbucks eGift card via email if you fill out our survey by Friday.

We’ve been getting great feedback thus far and would like to continue this run.  Once again, here is the survey link if you missed it.  Enjoy the (generally pretty good) work week!

Seven out of ten work comp adjusters say…

Senior Associate Jack Johnston joins us again, getting us up to speed on his research into work comp adjusters -

Over the past month or so I’ve been doing research on the claims adjuster profession to get a better understanding of what adjusters like, don’t like, and what their managers can do better – both in improving the adjuster’s lot and the companies they work for. From what I’ve gathered from various online sources, for the most part, adjusters aren’t the happiest, most fulfilled workers.

Gathering information from general websites such as www.glassdoor.com and adjuster-specific websites – www.claimspages.com, www.adjusterspace.org, and fromoneadjustertoanother.ning.com has produced a few positives and a lot of negatives.  Here’s what adjusters have to say about their job and the company they work for:

The Good:

Among those with good things to say, when it came to the pros a lot of them talked about the good benefits they received.  Getting paid during time off and having a 401k; can’t complain about that!  Another somewhat common pro was the flexibility of the work schedule.  Some adjusters stated that if they were doing well enough with work, they could get permission to work from home.  Other adjuster work-life positives included satisfaction with their compensation and the enjoyable camaraderie with co-workers.

The Bad & the Ugly:

While there were a lot of different complaints listed in the many sites I was researching, there were a handful that popped up repeatedly.

Let’s start with caseloads.  There seems to be a ridiculous number of cases handled by some adjusters, forcing them to work overtime (which they don’t get paid for).  Overall, most adjusters appear to be overworked; common complaints included: we are “always behind on work” and “There was an enormous amount of work that is expected of everyone, and it can be very defeating to have most of your days end without a feeling of accomplishment. (sic)” 

Even if an adjuster is doing a good job in the office (or at home), s/he probably shouldn’t expect much of a reward.  Promotions are scarce and raises tend to be paltry, with most getting a 1-2% increase (and that’s only if you are lucky enough to be given a raise).  The lack of ability to move up in the organization has upset many of the adjusters as they feel they aren’t rewarded for the work they put in with the heavy caseloads they deal with every day.

A fair amount of reviewers I read complained that instead of promoting within their company, the firm would hire someone from an outside company and place them in the higher position.  That’s a low blow to the employees who have been working there for years, expecting their effort and loyalty to lead to more responsibility and more income only to see the new person get the job.

Another common complaint is that managers are not qualified and don’t do a good job providing feedback to adjusters.  The adjusters never receive compliments or congratulations and are always told what they are doing wrong and how much more work they have to do.  They complain that they are not trained enough to handle some of their cases efficiently and they also feel that their offices are understaffed.  The adjusters want upper management to be realistic.

Conclusion:

I understand that this is certainly not the voice of all of the claims adjusters in the workers’ comp world but this is what I’ve found.  Websites like www.glassdoor.com can be easily accessed and false information, positive or negative, can be posted by bad actors. 

With that said, 69.2% of adjusters on the glassdoor website would not recommend their job to a friend.

Summary:

  • Adjusters like their benefits, salary, and co-workers… for the most part.
  • Schedules can be flexible (can work from home with permission).
  • No raises, room for growth, and no pay for working OT.
  • Overworked, large caseloads.
  • Always behind on work.
  • Lack of feedback from upper management.
  • And perhaps the most telling quote – “Run, do not work here”