Insight, analysis & opinion from Joe Paduda

Aug
31

On chronic pain and opioids, California’s State Fund is getting it done.

California’s State Fund has made impressive progress in the quest to reduce inappropriate opioid use – progress that has undoubtedly saved countless lives, helped thousands of workers regain their livelihood while protecting their families.

This has been done thoughtfully and carefully, acknowledging that patients taking opioids typically suffer from acute or chronic pain. Helping patients find alternate means of addressing and reducing pain and the impact pain has on quality of life and functionality has been central to the approach.

I’ve written about the State Fund before; I’ve been deeply impressed by its commitment to doing the right thing the right way – and to actually getting those right things done. The Fund’s early efforts were well-designed and produced solid progress.

(And I love their old marketing messaging)

That hasn’t always been easy; as a governmental entity the State Fund has multiple constituencies with sometimes differing or even conflicting priorities. Despite those challenges, the people at the State Fund – and their vendor partners – are making a real impact on workers in the Golden State.

The latest is continued success in reducing the use of opioids while addressing patients’ pain. Under the leadership of Medical Director Dinesh Govindarao MD MPH and Medical Management Director Alma Del Real, the good people in the State Fund’s medical management and claims departments implemented a three-pronged approach;

  • early prevention and intervention in new cases;
  • addressing relapse (patients returning to use opioids after a period of no opioid usage) and delayed recovery response; and
  • reduction of chronic opioid usage in existing cases.

The results make it clear that the approach is working:

  • From 2014-2021, State Fund saw a nearly 80% decrease in the number of claimants on any opioid prescription and a 4.6% decrease from 2020-2021
  • The number of patients taking high doses of opioids (80+ MEDs) for more than three months has dropped 91% from 2014-2021

The State Fund’s approach to chronic pain has been an “all of the above” strategy, supporting pretty much any type of treatment or modality that might help patients address pain, improve functionality and get back to being fully alive.

What does this mean for you?

We in the workers’ comp industry take our lumps – and often for good reason – for being too conservative, not forward-thinking or innovative, hide-bound by policies and procedures and too slow to adapt to a changing world.

Yet work comp led the nation’s efforts to address the crisis of opioid overprescribing, delivering impressive results long before our colleagues in group health and governmental programs had made any meaningful progress.

 


Aug
22

Why expanding medicaid is a no-brainer

A dozen states have yet to expand Medicaid, a decision that has led to untold suffering for millions without healthcare.

This has also led to:

(I’ve written about this a lot.)

it looks like things might be evolving; Georgia is making progress, Expansion is on the ballot in South Dakota and there have been referenda in several Republican-led states.

Reality is states that expanded Medicaid saw significant positives; healthier people, improved economies, greater Federal financial support, and major job growth.

What does this mean for you?

Poorer folks need Medicaid, and there’s a ton of data showing why every state should do this.

Work comp folkshere’s how this affects you.


Aug
18

WCRI’s Primer on Behavioral Health Care in Workers’ Comp

is one of the most important papers WCRI  has published in recent memory.

Authors Vennela Thumula PharmD and Sebastian Negrusa PhD have produced a comprehensive analysis of the subject, one every work comp manager, claims exec, regulator clinician and risk manager should have within easy reach.

Among the topics addressed are:

  • How do you define behavioral health in the context of workers’ compensation?
  • What are psychosocial factors and can they be a barrier to recovery following a work-related injury?
  • How important is early screening for psychosocial factors and other mental health conditions?
  • What non-medical and medical interventions exist to help those with behavioral health problems?

I’m working my way through the study; it has reinforced my belief that mental health/behavioral health issues/concerns are likely the primary barrier to recovery.

Chief among these are psychosocial factors that may impede recovery;

      • poor recovery expectations
      • fear of pain\catastrophizing
      • perceived injustice
      • pessimism
      • general fearfulness
      • job dissatisfaction
      • lack of family/social support systems

Friend and colleague Bill Zachry has long noted that Adverse Childhood Events can be a key obstacle to recovery  – in fact research indicates victims of abuse are more likely to be disabled during adulthood.

The paper also provides state-by-state details on coverage of mental stress and psychotherapy issues and the status of BH specialists as treating medical providers.

I’d be remiss if I didn’t note Carisk’s David Vittoria has been a persistent voice advocating for increased focus on BH issues. (Carisk is an HSA consulting client)

The study is free for WCRI members; there’s a nominal cost for non-members. Get yours here.

What does this mean for you?

Read this paper.


Aug
17

Climate change’s hidden impact on workers’ comp

Storms are more intense and more frequent; so are droughts. Everywhere is getting hotter. When it comes, rainfall is more intense.

The direct impacts of climate change on workers’ comp are pretty obvious:

  • higher risk for public safety workers;
  • increasing heat exposure and associated risks for agriculture, construction, forestry and other “outside” workers;
  • more infrastructure and construction work and associated payroll to rebuild and adapt

[Jeff Rush from California Joint Powers, Louisiana Work Comp Corporation’s Jill Leonard and I will be talking about climate change’s impact on workers’ comp at the National Comp Conference in Vegas) – mark your calendar for 12:30 on Thursday October 20.]

Thinking about this, there are both acute and chronic issues at hand; Fire, flood, and storm are acute events. This requires a crisis management approach; anticipate, prepare, triage, respond, recover.

Heat is different – it is chronic; unlike events it is pervasive, consistent, slowly increasing. This requires a more traditional risk management approach; assess, evaluate impacts, plan, educate, train, monitor, report, improve.

There are other hidden impacts, ones that payers would do well to think through.

For example…let’s use Hurricane Harvey which hit southeast Texas in 2017 causing $125 Billion in economic damage. As human-caused climate change increased Harvey’s severity by 30%; climate change’s added cost ran well into the tens of billions for that one storm alone. For a very detailed discussion of this see here.

photo credit CNN.com

Research published in the Harvard Business Review found:

  • 90% of businesses in the area surveyed by the researchers lost revenue due to Harvey;
  • 40% of businesses experienced property damage of which
    • over a a quarter were closed for a month, and
    • one out of eight were closed for more than three months.

Think about the – 1/8th of businesses are closed for more than a quarter, a time when payroll is likely non-existent – or close to it.

No payroll, no premiums.

Well, you may say, insurance covered that.

Nope – only 15% of surveyed firms got a payment – of any kind – from insurance.

What does this mean for you?

The more you think about human-cause climate change, the more impact you find.


Aug
15

I’m turning optimistic…

After too many months of doom-scrolling catastrophic weather events, rising inflation, ridiculously high medical costs, Russian fascism, social media wars over gender issues and elected officials that can’t seem to do anything but campaign for their next election, I’m starting to get just a little optimistic

The economy…is doing pretty darn well. (Most of the below from Scott Galloway)

  • Employment has risen every month this year and we added more than 500,000 jobs in July
  • The unemployment rate is near a 50-year low.
  • Family spending – which accounts for 70% of the economy – has increased five of the last six months.
  • Two out of three companies in the S&P three companies have beaten Wall Street’s revenue estimates, and three in four have beaten earnings estimates.
  • According to one economist peoples’ fears are “completely at odds with the reality. I’ve never seen a disjunction between the data and the general vibe quite as large as I saw.”
  • yeah, inflation…but it was lower in July than June, and gas prices are down 20% from their high earlier this year…

Congress is actually getting a LOT done.

The just-passed Inflation Reduction Act will:

Oh, and the legislation also kept 13 million folks’ health insurance premiums affordable, which will keep more of us alive.

On the state level, it’s not just stupid waste-of-time caterwauling about gender issues… Colorado just passed bi-partisan legislation that “prevents hospitals or their collectors from initiating or pursuing debt collection from a patient if the hospital’s website was not in compliance with the Centers for Medicare and Medicaid Services (CMS)’ price transparency requirements at the time services were delivered”

Kudos to Colorado’s legislators for doing something Congress SHOULD HAVE DONE – put some damn sharp teeth in hospital price transparency legislation.

What does this mean for you?

Things are better than some would have you believe!


Aug
12

Health insurance saves lives

A just-released study shows people with health insurance are a little less likely to die than those without insurance. 

That is not surprising; preventive care, access to medications to control diabetes, hypertension, depression, cancer and the like, and early diagnosis of potentially life-threatening diseases are all going to keep people alive longer.

From the study:

The study approach taken by the research team bypassed concerns raised against previous non-experimental research on this topic.

The outreach intervention was a joint project designed primarily by the Treasury Department’s Office of Tax Analysis, funded by the Department of Health and Human Services (HHS), and implemented by the IRS.

What does this mean for you?

Health insurance saves lives.

For workers’ comp, the implications are clear – workers who have health insurance are likely to be healthier than those without – and therefore more likely to recover from occupational injuries or illnesses.


Aug
9

Amazon, Kaiser, and primary care

Two seemingly-unrelated new items hit my news feed – Kaiser Permanente lost over a billion dollars last quarter, and Amazon paid $3.9 billion to buy One Medical, a primary care company.

Amazon is betting it can make primary care “work”, yet one of the best healthcare systems hasn’t been able to translate excellent primary care into lower costs.

Reality is, in the US primary care is (mostly) a money-loser.

One Medical, Amazon’s new purchase, has consistently lost money – a lot of money. That’s because reimbursement for primary care remains pretty low – despite Medicare’s move to increase pay.

We spend twice as much on healthcare as other developed countries, yet our outcomes, well…suck. One driver is likely access to primary care:

  • High income countries spend 2 to 3 times more on primary care services than we do; United States as a proportion of their (14% of total health care expenditures vs. the US’ 5% to 8%)
  • In those other countries primary care providers (PCPs) account for a substantially higher proportion of all practicing physicians; almost half of French physicians and a quarter of docs in the UK are PCPs compared to just one out of 8 in the United States.
  • that last data point may be due to pay; family practice docs make less than half what orthopedic docs do.

Good primary care saves big bucks by reducing the need for specialty care – an economic impact that isn’t reflected in primary care reimbursement in the US. At least not in most reimbursement schemes; risk-taking, ACOs, risk share, and other variations are among the models that attempt to reward PCPs for effectively managing patient health.

Amazon’s move to buy One Medical comes on the heels of lots of other investments in primary care; what’s notable is how few have resulted in profits.

Can Amazon “fix” primary care?

Well, they’ll  have to be a lot better than Kaiser Permanente.

KP is one of – if not the best – health care systems in the world, with excellent primary care and provider compensation that better reflects the value of primary care.

Yet KP lost over a billion dollars last quarter – and over $2 billion for the first half of 2022. Yes, a big chunk of the Q2 loss was due to investments, and there are extraneous factors – COVID-related mostly; Kaiser also has to pay orthopedic surgeons and other specialists a lot (increasing KP’s overall cost of care) because those docs could make much more outside KP.

Still, when one considers that Kaiser Permanente’s operating margins are generally pretty thin and certainly KP is less profitable than other health plans (UnitedHealth Group’s Q2 profits were up 19%) it shows just how difficult it is to make primary care “pay.”

What does this mean for you?

Pay more for primary care. 


Aug
8

The Inflation Reduction Act’s biggest loser

For the first time in about forever, big pharma lost.

One can’t overstate the impact of the-about-to-become-law Inflation Reduction Act on pharma. The most powerful lobbying force in Washington got steamrolled – with one major exception.

Medicare will now be able to negotiate drug prices, a change that will lead to massive savings for seniors (a group I will join next year) and taxpayers alike. This didn’t come without a last-ditch effort by a horde of suits invading the Senate and House…but for once, the invasion was turned back.

Medicare part D was a huge taxpayer gift to big pharma as it covered seniors’ drugs while not allowing Medicare to negotiate prices. This was a giant boondoggle; Christmas, birthdays, anniversary and graduation presents all rolled into one 20 year giveaway. (historians will note this was entirely driven by Republicans – and added $9.4 trillion to the ultimate Federal deficit)

Imagine if you could a) add a huge new market for your services/products and b) set your own prices…why…you could buy that baseball team you always wanted!

Well, at least the insulin manufacturers won. Republican senators blocked a provision which would have capped diabetics’ monthly insulin costs at $35. 

1 out of 7 Americans that need insulin spend more than 40% of their income after food and housing on the drug.

What does this mean for you?

Just when you thought Washington couldn’t do anything – it does something really big and really important. 


Aug
5

Jobs…but…

Over half a million jobs were filled in July, far exceeding expectations.

We have now recovered every job lost during the pandemic – a darn impressive record given inflation, higher interest rates – the unemployment rate now matches its 50 year low. 

Things are looking pretty good, although people remain  concerned about inflation. The good news there is fuel prices have dropped appreciably over the last few weeks, with gas prices falling 50 days in a row.

The result is a very mixed economic picture, although things seem to be trending in a positive direction on the inflation front.

What does this mean for you?

More jobs -> more payroll.


Aug
1

Just the facts, ma’am…

Today we’re doing a very quick recap of stuff we learned over the last couple of weeks…no opinion here (yeah that was really hard for me…)

Extra credit for identifying the man in the picture…

But first, for those of us perennially mad at ourselves because, well, we screw up and aren’t perfect, read this. Short take – perfectionism…

“…makes for a thin life, lived for what it isn’t rather than what it is. If you’re forever trying to make your life what you want it to be, you’re not really living the life you have.”

Drug prices

Make for great politics…even when all the caterwauling is wrong. The issue is what we – the consumer – pay is NOT what insurers, PBMs, and other payers pay.

That’s due to the “gross-to-net bubble”, a term popularized by the estimable Adam Fein Ph.D.

When rebates and discounts were factored in, brand-name drug prices declined—or grew slowly—in 2021.

So…you getting those rebate checks?

COVID’s origins

Remember the theory that COVID came from a Chinese lab? It is looking increasingly sketchy.

comprehensive, detailed, and multi-factor analysis by scientists from four continents found

the emergence of SARS-CoV-2 occurred via the live wildlife trade in China, and show that the Huanan market was the epicenter of the COVID-19 pandemic.

The peer-reviewed research published in the journal Science covered molecular epidemiology and spatial and environmental analyses.

Investors and physician practices

Private equity investment in physician practices varies a lot by specialty and region. Quick takes…

  • about 5% of physicians were in private equity-acquired practices
  • The highest percentage was in D.C. (18.2%)
  • More than one in ten docs in AZ, CT, FL, MD, and FL were in PE-acquired practices

The researchers wrote…

“Because some private equity acquisitions consolidate physician practices into larger organizations, geographic concentration of private equity penetration may be associated with reduced physician competition, which could lead to increased prices, [emphasis added]

An interactive map and the research report are here.

Gun violence

Gun makers earned over 1 Billion (with a B) dollars from sales of military-style assault weapons over the last decade. A report to Congress found:

  • gun makers marketed to young men by claiming their weapons will put them “at the top of the testosterone food chain”…
  • the weapons were described as an “apex predator”
  • some ads for these weapons “mimic first-person shooter video games popular with children.”

source here

The AR-15 is the most common of these weapons…the NRA named it “American’s Rifle” back in 2016. (and here I always thought it was Davy Crockett’s flintlock rifle…)

(disclosure – I hunt and have several rifles – none are semi-auto like the AR-15)

Workers’ comp physician fee schedules

…are all over the place…Louise Esola at Business Insurance reported on a recent WCRI analysis that found:

About one-quarter of the fee schedule states established their rates for office visits near the Medicare level or below, while about the same number of states set their fees for major surgery at triple the Medicare rates or more in each state…

The study – authored by Olesya Fomenko and Te-Chun Liu and up to date as of this spring – is here. (sorry for misspelling of Dr Fomenko’s  name in  earlier version…darn spellcheck!)

Clearly politics trumps policy…unless someone can tell us why it makes sense for Florida to pay docs below Medicare, while paying hospitals many times Medicare… I’ll stick to politics, campaign contributions, lazy legislators and hand-cuffed or ineffective regulators as the main driver of work comp fee schedules. (oops opinion inserted into post…just can’t stop myself)

Happy August!


Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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