Compounding drugs – myth v reality

There’s a lot of nonsense circulating about the wonders of compounded medications, almost all of it promulgated by companies and people in the compounding industry.

What’s notable about all of their claims is the complete lack of scientific research supporting their claims that more people need compounds, that compounds work, are safe, and deliver better results than non-compounded medications.

Turns out the reason these advocates don’t cite research is – the research doesn’t support the use of compounds for more than a very few patients.

That’s the key takeaway from CompPharma’s just-released research paper; Compounding is Confounding Worker’s Compensation.  You can download it here.

Here are a few of the findings:

  • Compounds have not been proven to be more effective than commercially available, manufactured drugs that have been approved by the U.S. Food and Drug Administration (FDA) in similar classes. In fact, efficacy data in general are non-existent for the types of compounds seen in workers’ compensation claims.
  • Using compounds poses risks to patients
  • Compounds are often not medically necessary
  • Compounds are expensive

Despite reports of outrageous cost inflation, dozens of deaths due to faulty processes and poor quality control, and little progress in improving oversight, compounding continues to plague work comp.

What does this mean for you?

Time to develop and implement a policy for approving and reimbursing for compounds – one based on science, and not marketing nonsense.

Note – I am president of CompPharma, altho I had little to do with the actual research paper; credit for that goes to the pharmacists and government affairs people from CompPharma’s member PBMs.  They did a terrific job.

Friday’s catch up post

A week on the road ends today – if flights are on time and the weather gods are merciful.  Here’s what I missed while sitting on planes and in airports…

This week marked the 103rd anniversary of the Triangle Shirtwaist Fire, the tragedy that led to major changes in employment law, drove adoption of workers’ compensation coverage, and focused the nation’s attention on abusive employers – here in the US.  The rest of the world has a long way to go, as we’ve seen.  There’s a very good, and very graphic, video here that shows the rest of the world needs their own drastic changes in employment law and policy. What happened 103 years ago in New York happens far too frequently today – just not here. 

With the witching hour fast approaching, it looks like the PPACA rollout will end up with somewhat more than 6 million enrolled, most taking advantage of a subsidy or covered thru Medicaid.  Before we all start declaring victory or pronouncing defeat, let’s just sit back and realize we won’t know if PPACA’s goals of reducing cost, improving outcomes, and covering many more Americans will be realized for at least a few years…

Saw an item in Insurance Thought Leadership by one Al Lewis claiming that wellness is a fraud, an” industry conceived in lies, retractions, and hypocrisy.” Lewis doesn’t suffer from a lack of ego; he claims, among other things, to be “widely credited as” the inventor of disease management (now that’s a ballsy assertion). Lewis’ assertions about wellness are similar; simplistic to the point of being misleading.  

Fact is, the wellness story is much more nuanced, more complex, and while there are certainly misstatements and over-the-top claims (akin to naming oneself the “inventor of disease management), there is ample evidence that properly conceived and implemented programs can and do have measurable, positive effects on individuals’ health status and health costs. A RAND study reported:

  • We found statistically significant and clinically meaningful improvements among program participants in exercise frequency, smoking behavior, and weight control, but not cholesterol control.
  • Participation in a wellness program over five years is associated with lower health care costs and decreasing health care use. The average annual difference is an estimated $157, but the change is not statistically significant.

I’d note that almost all business decisions are made based on evidence that is not “statistically significant“, so don’t get caught up on that metric.  More evidence of wellness programs’ effectiveness is here and here.

Back in the real world, a 12 month fix for the Medicare physician reimbursement mess known as SGR will happen before the end of the month. The House passed legislation yesterday, and word is the Senate will follow shortly.  There’s a few other provisions in the bill that, among other things, reduce long term care reimbursement, delay ICD-10 rollout for another year, and cut Medicare payments to rural hospitals.  These may or may not, end up in the final bill that gets signed into law.  I’ll keep you posted.

This matters to workers comp as all states with doc fee schedules use Medicare as the basis (except IL).  In only a couple states is there a “direct” linkage, but what Medicare does tends to eventually work its way into WC fee schedules, and, perhaps more importantly, affects physician behavior.  A cut would motivate docs to shift costs to work comp…

Sticking with work comp, the rumors that Aetna will sell off its work comp subsidiary continue.  As I’ve noted ad nauseum, that’s just not possible.  Can they sell PBM First Script?  Sure, and well they might.  How about their case management and UR and IME and other “ancillary” business? Well, if anyone wants to buy it, perhaps.  Bill review?  no way – unless they do a renewal rights deal, as the current application is just not viable. That, and the fact that Aetna laid off most of the tech support staff indicates they may just let it fade away.

Which leaves the work comp PPO – the Coventry network. Word is Aetna execs have been trying to figure out how to sell it – except it isn’t “sell-able”, at least not for a price that would be anywhere close to the money they are making off the network today.  As I said a couple years back; 

if Aetna wanted to sell the WC business it is hard to see how it could transfer the network’s provider contracts to the new owner as most are a combined WC/group/governmental contract. Sure, Aetna could guarantee access to their contracts going forward for some period certain, but given Aetna’s history with workers comp, any buyer would be very reluctant to bet the future of their investment on that guarantee.

I do have first-hand knowledge of this; about 15 years ago UnitedHealthcare sold MetraComp’s WC network to NHR, which was then sold to Concentra. (I worked for then consulted for MetraComp) There was a deal in place wherein UHC was supposed to maintain the network contracts; didn’t happen.  Discounts declined, the network shrunk, and the asset value diminished rather quickly.

I’d be remiss if I didn’t make sure you are going to Operation UNITE’s Prescription Rx Summit in Atlanta April 22 – 24.  The Summit is focused on all aspects of the prescription drug abuse problem – the top problem in worker’s comp today.

Enjoy the weekend – hope your flowers are blooming!

HWR is up

As the March 31 “deadline” for enrollment in insurance approaches, the good folks at Health Affairs have put together the best health policy blog posts of the last two weeks and present them to you for your edification.

And managed to do this while keeping up on March Madness too – Christopher Fleming is one impressive guy…

In these days of less and less insight from the mass media, we’re fortunate indeed to have very smart – and very good writers – working for you - and for cheap, too!

Another bomb drops on physician dispensers

Allstate Insurance filed suit against physician dispensing “technology” firms Infinite Strategic Innovations Inc (ISI) and Doctors Medical LLC earlier this week.  This is the second in what may be an-ongoing series of legal actions by the giant insurer, and comes on the heels of a settlement in their earlier suit against dispensing “technology company” Automated Healthcare Solutions.  

While the AHCS suit has been dismissed, I think we can assume Allstate made out quite well in the “dismissal”; Allstate doesn’t move unless they are very confident, and they come with overwhelming force.  Even the most arrogant, litigious, and downright nasty opponents are going to quail in the face of an Allstate lawsuit. While no one’s talking,   it is logical that Allstate would not have allowed the suit to be withdrawn unless they were pretty darn happy with the resolution.

My guess is Doctors Medical’s owner, Tom Mollick, is having a very bad week. And things are not going to get any better for Mollick et al.

From reading the complaint, Allstate is claiming ISI and DM received payments totaling $93,265 for PIP claims in Michigan, and has billed Allstate another $443,751 for other claims.  Allstate wants (most of) their money back, doesn’t want to have to pay most of the pending claims, and wants ISI and DM to agree to stop billing the insurer.

The key parts of the suit include:

  • request for declaration judgment
  • a statement that ISI and DM have no standing to bill as they are not medical providers
  • request for restitution for claims adjusting, administrative, and legal costs
  • assertion that ISI and DM operated “under the umbrella” of Rx Development Associates, Inc.  

There’s a lot more to this, but the net is this.  This is the second in what may well be a series of suits against physician dispensing companies; my guess is Allstate won big in their initial suit against AHCS, and is pursuing Mollick now, and will go after other dispensing companies as well.

As the AHCS suit was withdrawn, we don’t know what the resolution was – and never will.  And more’s the pity, because Allstate may well have solved its problem, but did nothing to address the problem for the rest of the industry.  That’s understandable as it isn’t their lawyers’ job to fix other insurers’ problems.

Nonetheless, it would be…helpful if the result of these legal actions was public knowledge – it would give pause to the other dispensers and their cronies, alert other insurers to the issue, and, over the long term, reduce Michigan auto insurance costs.

What does this mean for you?

Check your payment records, figure out how much you’re paying dispensers and their enablers, and do something about it.

 

ACA rollout – how’s California doing?

If there’s a state that’s key to the success of the ACA, it is California.  Peter Lee, Exec Dir of Covered California (the Golden State’s exchange) gave a status update.

Lee reported enrollment in insurers via CC is right about a million people – and this doesn’t include the Medicaid expansion. Looks like about 20,000 are signing up per day of late. 

Here are the highlights.

- success is predicated on providing affordable health plans – and there are several plans available in each area, with some having a dozen or more options.

- about 26% of enrollees are in the 18-34 demographic; Lee sees this as a work-in-progress, and considers them the “Young Convincibles”.

- CA is an “active purchaser”, which means they carefully oversaw the health plan bidding process to ensure the plans available on the exchange were comprehensive, affordable, and many.

- about 2 million will get subsidies to buy health insurance

- LOTS of marketing, outreach, advertising, partnering with agencies.  But the most effective part has been via community organizations.

- enrollment has been greatly aided by facilitators.

- a lot of analysis will continue to assess outcomes, access, and disparities by different demographic group, and Covered California will move past the enrollment phase and into the improvement phase over time.

 

ACA – how California’s health plans are adapting

I’m honored to be speaking at Keenan & Associates’ annual Summit today, and they’ve graciously allowed me to live blog from the Summit.

The day begins with a panel of California health care executives discussing how their companies are adapting to ACA.  Representatives from Kaiser Permanente, Aetna, Anthem, HealthNet, United Healthcare, and Blue Shield of California answered questions from Keenan’s Henry Loubet and the audience.  Here are a few highlights.

First, the pace of innovation, the investments these companies are making, the focus on smart disease state management, and the effort to get closer and closer to the member are all striking.  There is a LOT going on and I got the sense that these companies are working feverishly to adapt and build and innovate.

A big area of focus was on ACOs/tailored/narrow/high quality networks, which evidently have been a big part of most health plans’ strategies. Loubet wrote about this recently here.  The companies represented seem to be fully invested in ACOs, with several working with multiple ACOs.  They are measuring results, and according to Blue Shield, the metrics are looking quite positive.

ACOs are not monolithic or identical across companies, rather they are highly customized with geographic areas, populations, reimbursement models, and state regs all influencing design and structure.  Simply put, they are akin to the old HMOs, where the focus is on an integrated health care delivery system and consistent, high quality care management.

Working with docs to identify and assertively manage patients with specific disease states is also a big focus, and several of the speakers discussed how they are using technology – smartphones, apps, on-line video consults with a doc, and electronic medical records – to do this.

Someone asked about the integration of WC and group health, and the speakers seemed to agree that ACA’s data integration may help move this closer however there’s so much focus on addressing ACA implementation that tying group and work comp together won’t happen any time soon.  

Finally when asked about possible changes to ACA going forward, the panelists’ comments included; a delay in implementing the small employer mandate; allow consumers to keep their current plan for longer; and possibly postpone fees and taxes (which ones weren’t identified).

Friday catch-up and quick takes

Yikes – where did the week go?

Apologies for not keeping up with the daily blogging – too darn much paying work these days.  Alas…

So here are a few quick takes.

Prime Health got $8 million in debt financing from LongueVue Capital; this likely means the PPO won’t be on the block any time soon.  No word on what they’re going to use the funds for…

Drug compounding hit the big time this week, with the news that both the FDA and HHS’ Office of the Inspector General are looking into compounding.  This from AIS’ Health Business Daily: (free sub req)

“…state-regulated compounding in hospitals and federal oversight of manufacturers — are colliding, as the FDA in January urged hospitals to buy drugs only from compounders that voluntarily register with the agency and abide by “good manufacturing practices.”

Compounding — which is the mixing of two or more ingredients to tailor a drug to a specific patient’s needs — also is a new target on the 2014 Work Plan for HHS’s Office of Inspector General, with the OIG eyeing practices inside hospitals and oversight by Medicare accreditors.

PPACA/Obamacare

About 80% of survey respondents want their elected officials to fix O-care - not make it fail.  Fully three-quarters of non-Tea Party Republicans want their representatives to fix – not kill – Obamacare…and the less-educated one is, the more likely they are to oppose Obamacare.

Of course, among those who disapprove are some who want a single payer system.

Re Obamacare implementation, there were mis-leading headlines and ledes out there saying that insurance markets are less competitive than they were pre-reform.

Once again, these media got it wrong.

Here’s what the study  - which only looked at 7 states – really said:

“early indications suggest that some exchange markets are more competitive than their states’ individual markets before the ACA (emphasis added)…Two states (Connecticut and Washington) that have also been successful at enrolling consumers seem to have less competition than in their 2012 individual markets.  Results from the remaining states generally show either similar levels of competition as their pre-ACA markets or mixed signs.(emphasis added)

There’s a great infographic up at JAMA’s site showing what people are paying under Obamacare – check your state here.

Finally, myMatrixx has a webinar on specialty pharma in work comp next Tuesday at 2 PM eastern.  Highly recommend it – this is a rapidly growing and very complex issue and Phil Walls is a great “explainer”.

Enjoy the weekend, best of luck in your brackets, and here’s hoping my beloved Orangemen make it thru!

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.

North Dakota’s WSI – what? listen to the Medical Director? Hah!

WSI’s legal folks are going around their own Medical Director to outside, part-time, contract medical directors when they want a certain opinion.

Thanks to Tony, I learned of the dispute between the North Dakota state fund’s medical director and that august entity’s legal department early today (hat tip to WorkCompCentral’s Peter Mantius); it took me quite a bit longer to get the back story on this mess.

And it is a mess.

Here’s the issue.  When the claims and legal departments want a specific answer about a medical issue on certain claims they DON’T ask WSI’s Medical Director.  No, they send it to one of two outside reviewers and skip routing it to, or even involving their in-house, full-time, employed Medical Director.  By all accounts the Medical Director, a Dr Luis Vilella, is widely respected, known to be a “team player”, and interested in nothing more than ensuring the claimant gets the right medical treatment and the correct medical determination.

Evidently some claims and legal folks at WSI don’t like it when their view of a claim is inconsistent with that of Dr V, which is why they avoid involving the good doctor on specific claims.  This has been going on for some months, until finally Dr V sent a letter about the issue to WSI’s director, the famous ex-state-trooper-now-workers’comp-CEO Bryan Klipfel. (the letter was obtained by the local paper in a freedom of information request)

In part, Vilella’s letter read: “How can WSI impartially adjudicate a medical claim when its own Director of Legal Services, Attorney Green, disregards litigation support that WSI’s Medical Director offers on matters of disease and injury causation?”

It would be bad enough if this was only on one claim – but it most definitely isn’t.  In fact, sources indicate this has been happening for several years, including at least two incidents where WSI managers tried to alter his medical opinions.  In addition, Vilella is being marginalized within WSI; excluded from meetings focused on medical topics, prevented from meeting with Sedgwick’s on-site auditors; and pushed three levels down below Klipfel in the reporting structure.

So we have the Medical Director in a work comp insurer – and a relatively tiny one at that – who reports up to a guy who reports up to another guy who reports up to a third guy who THEN reports to the top guy.  In Klipfel’s defense, he recently decided to fix that really stupid reporting structure, and Dr V will be reporting directly to him.

That said, Klipfel knew legal and claims were marginalizing Dr V ever since former boss Sandy Blunt was run out of town on a rail.   With Sandy’s departure, it appears as if the legal geniuses at WSI decided they were not only brilliant legal minds, but they were more suited to make medical decisions than a medical doctor.

After all, why would a state experiencing an explosive growth in workers’ comp claims, many of them complex, difficult, and traumatic, ever want to have a medical director in a position of authority?  In actuality, the treatment of Vilella reflects something much more troubling than just a series of blatantly stupid decisions by claims and legal.

It is prima facie evidence of Klipfel’s – and the WSI Board’s – complete lack of understanding of the primary importance of medical in workers’ comp claims.  Medical drives well over half of direct claims costs, and heavily influences the indemnity portion.  Yet the acknowledged expert in medical was multiple levels below the CEO – who, by the way, had ZERO experience in work comp, or business for that matter, until he was appointed to the top job.

I don’t know Vilella, but I do know several other folks at WSI. The ones I know are good people, doing the best job they can in very trying circumstances.  They really truly want to help injured workers.

It is too bad they are being “led” by idiots.

WCRI – Shuford on how the economy drives work comp

NCCI’s Dr Harry Shuford gave a great brief talk on the economy’s impact on the financial performance of WC.

A few key takeaways.

  1. WC is a relatively small part of the overall property and casualty insurance industry (around 11% or so)
  2. Average operating gain of WC has been about 5% over the last 20 years. That factors in an average return on investment of 14% and the underwriting results.
  3. WC premium dropped 23% from 2007 – 2009, then grew 18% from 2010 to 2012.
  4. Markets for all P&C lines seem to go thru cycles in synch.  That is, when the personal auto market is soft, so is WC, etc. Harry’s inference – poor investment returns are key to understanding when cycles occur, and, perhaps more significantly, help us understand overall business cycles as high investment returns APPEAR to predict recessions.
  5. Cost drivers include:
  • Long term structural decline in frequency  - this is global and not limited to the US.
  • The ebb and flow of inexperienced workers drives frequency as part of the business cycle – temps get added, frequency goes up.
  • Medical severity is a huge driver – utilization, price, and intensity of services.