Insight, analysis & opinion from Joe Paduda

Aug
28

Asbestos is back!!?

The Trump Administration has loosened rules that will allow broader use of asbestos in manufacturing.  

Here’s how Fast Company put it:

A lengthy report of EPA’s new “framework” for evaluating risk, placed into effect this month, detailed how it would no longer consider the effect or presence of substances in the air, ground, or water in its risk assessments—effectively turning a blind eye to improper disposal, contamination, emissions, and other long-term environmental and health risks associated with chemical products, including those derived from asbestos.

No one knew how dangerous asbestos was until people started dying from exposure to it. How many thousands of dads, brothers, friends, moms and sisters would have been saved if researchers had studied exposure risks and informed the public?  How many tens of billions of dollars would have been saved, not spent on medical care, remediation, lawyers fees?

I don’t think we’ll see any big increase in the use of asbestos – the litigation risk is just astronomical and no insurance company would allow it – so no business will use it (wait, there are unscrupulous business owners that will do anything for profit, so there is some risk…)

But that’s not the point.

The point is that the health risks of any number of substances, compounds, fibers, chemicals will NOT be evaluated before we are exposed to them.

I’m thinking liability insurers are going to be quite concerned by this.

With the EPA abdicating its responsibility to protect the environment and us, the risk of lawsuits and huge awards increases dramatically.

While no insurance company will accept the liability for increased use of asbestos, they may well start re-writing coverage to ensure they aren’t on the hook for tomorrow’s asbestos suits.

What does this mean for you?

Increased health risks over the long term, and increased insurance costs over the near term.


Aug
27

Asbestos, short term health plans, and drug price wars

Thanks to Julie Ferguson of Workers’ Comp Insider for hosting this month’s Health Wonk Review…

If you want to learn a bit about:

  • those short term health plans touted by the Trump Administration,
  • what’s up with the drug price wars (in a great video, no less),
  • how asbestos is working its way back into US manufacturing,
  • and a bunch of other “wow, I didn’t know that!”

read on!

 


Aug
24

King v CompPartners – good news, but another shoe to drop?

Yesterday California’s Supreme Court fully supported the State’s workers’ comp UR/IMR process.

That is excellent news.

First, here’s the key takeaway – the Court ruled that workers’ comp remains the “exclusive remedy” for resolving disputes related to treatment approvals/UR/IMR.

Second, the California Legislature may well take up the issue and require payers to take into consideration the potential medical effects of a treatment decision, perhaps including weaning off medications that are no longer approved.

The Ruling

UR/IMR is an inherent part of the workers’ comp process, and therefore falls under the exclusive remedy provision of work comp. So, the plaintiff could not sue the IMR reviewer for an allegedly adverse treatment decision.

(Any treatment arising from the plaintiff’s medical care – which in this case was allegedly due to the suddenly stopping a medication – is part of the work comp claim.)

Here’s how CWCI General Counsel Ellen Sims Langille put it:

We have long contended that exclusive remedy was the beginning and end of the discussion in this case, inasmuch as the URO was acting in the capacity of the employer, and as a statutorily required part of the claims process, and now the Supreme Court has agreed.  The URO was acting as the “alter ego” of the employer, and the utilization review itself is a statutorily required part of the claims process.  That is the very definition of exclusive remedy.

The Court of Appeal had made an obvious error in finding that the seizures suffered by Mr. King were compensable outside of the workers’ compensation system because there were no allegations that he was working at the time he suffered the seizures.  That is a fundamental misunderstanding of how compensable consequences work.  As our Amicus brief argued, the injuries alleged by Mr. King were derivative of a compensable workplace injury, and the new compensable consequences injuries fall within the scope of the workers’ compensation bargain — and within exclusive remedy.

But there’s more, which may lead to additional legislative action to address the underlying event behind King…again from Langille:

Concurring Opinions were filed by two justices, and may prove to be the enduring legacy of the decision.  Justice Liu frankly invites the Legislature to examine whether existing safeguards provide sufficient incentive for competent and careful utilization review, pointedly noting his skepticism that “a care plan… appropriate for the medical needs of the employee” was established before the Klonopin was discontinued.  Even the Majority Opinion referenced the same language from §4610(i)(4)(C).  Unfortunately, it does not appear that any of the justices understood that this subsection applies only to cases of concurrent review, which is defined under Reg.  §9792.6(d) as “utilization review conducted during an inpatient stay” and thus inapplicable to the facts of this case.  Be that as it may, it is likely that the next legislative session will include some effort to expand the safeguards for the injured worker under utilization review.

What does this mean for you?

Consider the impact of medical treatment decisions on the patient’s future condition. 


Aug
21

This makes zero sense.

A totally unqualified person has been appointed to California’s Workers’ Compensation Appeals Board. The person in question is not a work comp person, legal scholar, labor advocate, or claims expert, but an 80 year old retired music teacher whose sole regulatory experience is a brief stint on the Alcoholic Beverage Control Appeals Board.

Mr Gaffney, undated photo from facebook

Mr Gaffney has no apparent experience, education, or training that in any way qualifies him for any role in the workers’ comp system, much less a role as significant as an Appeals Court Judge. He is a high school classmate of retiring Gov Jerry Brown, who reportedly ran into Mr Gaffney at an event, and after a discussion decided to help him out by appointing him to a very lucrative position.

The California Applicant Attorneys Association seems to think this is a good idea, citing Mr Gaffney’s “heart”:

Getting beyond legalisms and into the heart and humanity of the workers we represent could be music to our ears.

I don’t see the logic behind the CAAA’s statement that Mr Gaffney’s decades of involvement in choral music mean he is a “person who has dedicated himself to the hearts of ordinary people – working class immigrants.” Sounds like he has dedicated himself to their ears, not their hearts…

If intrinsic goodness, love, dedication to the downtrodden, and pureness of heart are key criteria, the sainted Mother Teresa would be a perfect candidate.

Further, this is an Appeals Board – one where Mr Gaffney will be involved in decisions that will set precedent. Where he will have to adjudicate complicated issues around causation, apportionment (!), penalties for unreasonableness, assignment of liability, exclusive remedy and the like.

This is really complicated stuff that attorneys with decades of experience struggle with.

No matter how wonderful one’s heart is, it is no substitute for knowledge and experience.

If you are hurt on the job and have a disagreement with your employer about your claim, you very much want the arbiter of that disagreement to:

  1. Know a lot about workers’ compensation
  2. Have a lot of experience dealing with cases like your’s
  3. Understand the laws so they can give a final ruling that won’t keep you in limbo

If the arbiter isn’t all of the above, you may well be treated unfairly, have your case appealed to an even higher court, and not get things resolved for years.

What does this mean for you?

The appointment will be reviewed by the California State Senate Rules Committee.  Encourage this body to reject the appointment. 

 


Aug
17

The Opioid Update

72,000 kids, moms, dads, brothers, sisters, best friends died last year from opioid overdoses.

Things are so bad that despite the ever-climbing death toll, news reports announcing the butcher’s bill manage to sound somewhat positive, citing reductions in deaths in a handful of states. Meanwhile, between 2.1 and 4 million Americans suffer from Opioid Abuse Disorder. 

Fentanyl is now the biggest driver, accelerating a years-long upward trend begun by rampant over-prescribing of prescription opioids.

Researchers cite some reasons for optimism; death rates in the west remain pretty flat – likely because the heroin used there is hard to mix with fentanyl…however there’s evidence that the black tar folks are figuring out how to do just that.

Meanwhile, Congress dithers; debating, pontificating, speechifying – and doing precious little.

To date, they’ve allocated a mere billion dollars to the biggest health crisis we’ve seen in decades.

Here in workers’ comp land, CWCI just released an analysis of polypharmacy among work comp patients in California. (Polypharmcy refers to patients getting multiple drugs.)

Two key takeaways:

  • A combination of  opioids, muscle relaxants, and anti-inflammatories was the most common drug cocktail. (opioids combined with muscle relaxants are very, very dangerous)
  • Shockingly, fully one-fifth of patients prescribed 3 or more drugs have back strains without skeletal involvement. Another tenth have various other sprains.  Yup, strains and sprains account for about a third of these patients.

What does this mean for you?

The next time someone protests the UR/IMR process, ask them how many more patients have to die from opioids before they accept that doctors need oversight.

 


Aug
16

U.S. healthcare vs the world in one chart

How does our healthcare stack up against the rest of the world?

As we think about the possibility of moving to some version of Single Payer, we have to look at all sides of the question – what do we pay, what do we get, and how is that working for us.

Let’s start with a quick snapshot – we pay twice as much as the average country, to get results that are generally worse than average.

Would your business survive if you delivered these results at this cost?

Briefly – we are paying twice as much as the average industrialized country, yet our life expectancy is lower, more of us die from heart disease, far fewer of us have insurance coverage, and too many of us are admitted with breathing problems.

Want more?

It won’t surprise you to see more Americans skipped taking medications because they couldn’t afford them.

Add that to the fact that the US has a higher percentage of adults with diabetes than all but two countries, and we know that the prognosis for many of those diabetics is poor.

Oh, and more American babies die than in most other countries; fortunately we are just a tad better than Russia, land of alcoholism and awful medical care.

That may be because we have a higher rate of obstetric trauma than most other countries…

Our surgical infection rates are also average – although we pay way more than they do in other countries.

 

What does this mean for you?

The US healthcare system is delivering crappy results for way too much of our money. Given what we pay, we should have the fewest infant deaths, lowest surgical infection rates, highest medication adherence, and longest and healthiest lives.

And that’s exactly why Amazon, Berkshire Hathaway, and JPMOrganChase are taking it on.

*Source for all charts is http://dx.doi.org/10.1787/health_glance-2017-en


Aug
15

What exactly is “Single Payer”?

At some point we’ll have some version of “single payer” healthcare – I predict this will happen within a decade (yes, I know I’m usually wrong on the timing of my predictions, but I’m mostly right on the result).

Whether you’re a rabid libertarian or a totally committed Democratic Socialist, you’ll need to know what Single Payer is.

Single Payer is a catch-all term for universal health insurance coverage. In some cases there isn’t a “single payer” in an entire nation – our neighbor to the north being one example, Switzerland and Germany are two others. In Canada, each Province is it’s own single payer; in the two European countries there are a variety of independent companies that provide health coverage.

That’s how the insurance end of things works. Healthcare providers; hospitals, physicians, therapists are the other side.

The UK may be the best-known example of a “true” single payer system; the government runs the health insurance program and employs most of the healthcare providers.

Between the UK system on one end of the spectrum, and the US “system” on the other, there are a lot of variations.

Here are three examples (borrowed from Dr Lynn Blewett of the University of Minnesota):

In Canada, there are some variations among provinces in terms of financing and benefits, but these are pretty minor. People can freely choose their providers, there are no deductibles or other cost-sharing provisions, providers are private (not employed by the government), and hospitals operate under a universal budget.

Funding comes from taxes and provincial lottery profits, and about 2/3rds of Canadians buy supplemental private insurance for non-covered services.

Germany funds its system via general taxes and payroll taxes. There are over a hundred “sickness funds” which are generally equivalent to our health insurers; some charge additional premiums. About a tenth of the population opts out of the national system and buys private insurance coverage. Patients have full choice of the providers they use.

The UK is often held up as the only “pure” single payer system as both providers and the payer are government-based. Funding is via payroll and general taxes. Choice of primary care provider is up to the patient, however PCPs act as gatekeepers to specialty care. Similar to Germany, about a tenth of the population buys supplemental coverage.

California is likely to consider Single Payer after the Democratic candidate for Governor wins the election this fall.  Advocates have described their vision for a state-based “single payer” system this way.

While every system has it’s problems, what is notable is they all deliver better outcomes at significantly lower cost than we have here in the US.

So, when you hear people decrying the ACA, “Obamacare”, or single payer, ask yourself how their “solution” would lower your costs while improving the healthcare you get.

Better yet, ask them…But be prepared for silence.

What does this mean for you?

This will be one of the two most important issues facing us over the next decade. Inform yourself.

 

 


Aug
13

Work comp claim counts are dropping – what this means for you

Claims counts are continuing to decline. That’s good news for employers and taxpayers, but not-so-good news for the businesses that service claims.

Ok, counts aren’t falling as fast as that sheep, but you get the point.

Here’s what this means for you and others…

For TPAs – Good news indeed – as counts decline, more insurers are choosing to have TPAs handle more of their claims. That new business is great, but…

That “but” is this – the claims business is going to become ever more competitive.  TPAs are going to have to get a lot more creative than figuring out new ways to charge for bill review and network access. Predictive modeling, narrow network development and operation, outcomes assessment are all paths to take. But become especially adept at taking over claims, because…

Smaller claims staffs = more flexibility for insurers and lower admin expenses.  It is much easier for carriers to adapt to changing markets when they don’t employ their own claims staff.  It also keeps their unallocated loss adjustment expenses lower, allowing them to be more competitive.

Those carriers also don’t have to worry (as much) about investing in new systems, processes, applications or technology when the claims are handled by a third party. This addresses one of the biggest problems in work comp – insufficient (to be kind) IT budgets.

Service companies – investigations, case management, peer review, IME, you name it – are all fighting over a shrinking pie. In this very-mature market, there just isn’t enough business for everyone, so competition is brutal.  Margin pressure, the buying power and IT security resources of very large competitors, the increasing demands made by large buyers are making it tough for smaller suppliers to grow and expand.

Technology firms – bill review, UR, claims and others – are kind of in the middle. If their tech can reduce expense and be implemented with a high chance of success and relatively low expense, they may do well.  But these companies recognize that IT budgets are tighter than ever, and they MUST be creative around pricing, be clear about deliverables and assume as much of the implementation and maintenance as possible.

Brokers and consultants – you’ve got a choice to make. Either skate along, get carriers/TPAs/vendors to cut prices to the bone, and show your employer clients what a great job you’ve done…or keep pushing for value – fewer injuries, faster return to functionality, lower total claims costs, lower medical expense.

What does this mean for you?

Success favors the prepared.


Aug
10

Friday attempt-to-catch-up

This summer has been busier than any I can recall  – new clients, new projects, new work has me waaaay behind on posting to MCM – my apologies.

Here’s stuff that happened this week…

Way too many opioid-related deaths occur in construction, farming, and fishing

According to the Boston GLobe, “nearly a quarter of overdose deaths in a five-year period occurred among people, mostly men, who work in construction…”

Construction workers may well take the dangerous painkillers so they can keep working.

Thanks to Mike Mullen for the tip on this.

Good piece by Louise Esola in Business Insurance about predictive analytics – Friend and colleague Jeff White of Gallagher Bassett draws an interesting parallel with hurricane tracking graphics – the tools can help adjusters figure out where claims are headed – and therefore what to do to prepare/prevent bad outcomes.

Those short-term health plans Trump is pushing – be careful before you sign up. These “association health plans” often don’t cover drugs or pregnancy or out of network care.

That’s why they are cheap.

From the “these people are awful” file comes this – Mississippi’s governor is seeking to force Medicaid recipients to fill out all kinds of forms on line to demonstrate their efforts to find work.

This in the state where almost no one is on Medicaid because you don’t qualify if you make more than $6000.

You won’t be surprised to learn most Mississippi Medicaid recipients are very poor African American mothers in rural areas.

This smacks of racism.

When did it become OK for politicians to do this?

Hope you have a good weekend – it will certainly be better than those poor moms’…


Aug
6

Medicaid – what you need to know

You need to know basic stuff about Medicaid because:

  • Medicaid may well become the model for your health insurance
  • It covers more working-age people than any other payment type
  • Your state and federal tax dollars pay for Medicaid.

So, here are the basics.

  • Medicaid covers one out of five Americans.
  • Most Medicaid dollars go to the blind and disabled.
  • Medical care for poor adults accounts for a third of Medicaid spend
  • Poor kids use a fifth of Medicaid dollars
  • The rest is mostly for nursing home care for folks with very limited income or assets – in fact, Medicaid is the major payer for nursing home and similar medical care.
  • Medicaid expansion (covering people just above the poverty line) is now in place in 34 states (plus D.C.); 2 are implementing, and 3 more are considering expansion.

Lastly, my bet is we’ll have some form of Single Payer within the decade – and Medicaid will be the model.


Joe Paduda is the principal of Health Strategy Associates

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