Off to the Rx Drug Abuse Summit

The penultimate conference of the “spring” starts today in Atlanta, where the third annual Rx Drug Abuse Summit convenes this afternoon.

Specific to workers’ comp is the third party payer track; great discussions of Prescription Drug Monitoring Programs, the impact of opioids on worker’s compensation, legislative trends, and identifying high-risk claimants.

Thanks to Millennium Health for their lead sponsorship of the Summit; Millennium has been a consulting client for three years and I’m proud to work with them; they are good people looking to do drug testing the right way.

For those looking for additional education, can’t do better than Washington State L&I’s one-day educational conference on Evidence-Based Pain Care.  The sessions will review the new Agency Directors’ guidelines on Prescribing Opioids for Pain. Fifty bucks gets you educational credits, parking, breakfast and lunch…

Updates coming from the Rx Drug Abuse Summit from your loyal reporter…

Friday update

Happy spring…or what passes for it here in upstate New York, which is one day of temps in the high fifties followed by…snow.

Caught a few folks with my annual April Fools post; here’s a list of 10 that are waaaay better than anything I’ve ever done (Arnold’s dip is great) (altho I gotta say the post about Coventry acquiring United Healthcare was a beauty)

(I’m starting a new thing with today’s catch up; there will be a very brief “this may mean” after each snippet to give my take on potential implications)

Back to the real world…where I’m going to get all macro on you for a few minutes.

First up, an excellent piece on how the “news” distorts our world view.  For example, when Anna Nicole Smith died a few years ago, that story alone eclipsed coverage of every other country in the world – except Iraq, which happened to be at war.  In fact, Ms Smith’s untimely demise received10 times the coverage of the Intergovernmental Panel on Climate Change’s seminal report.

No wonder Americans don’t understand anything about anything not on the cover of People or watched on TMZ…

This may mean – it’s helpful to read non-US news sources; BBC and the Economist are two places to start.

Gary Schwitzer has an excellent primer on statistical significance for journalists, an area of study that seems to have escaped many of our leading writers. A key quote:

hard-and-fast rules on statistical significance are somewhat problematic. [emphasis added]

The somewhat arbitrary choice to set the p-value for statistical significance at less than 5% was made nearly 100 years ago.  There’s nothing magical about it. It’s just become a time-honored norm…

In focusing on statistical significance, let’s not forget to question whether even results with a p-value < 0.05 are clinically significant.  In other words, did they make a meaningful difference in people’s lives?

What’s happening in health care?

Hospitals in states that haven’t expanded Medicaid are struggling – big time.  Kansas is particularly hard hit.  What’s behind this is the PPACA reduced Medicare and other funding for hospitals, anticipating it would be replaced by increased Medicaid and private health insurance coverage, and a concomitant reduction in indigent care. When Kansas – and many other states – rejected Medicaid, the hospitals were left hanging. In Kansas alone, the drop in hospital revenue is almost a half-billion dollars.

The latest data suggests 283 mostly-rural hospitals are in financial trouble; since 2010, 48 have closed. This cannot be attributed solely to a failure to expand Medicaid, but it certainly plays a major role.

This may mean – potential cost shifting to private insureds and workers comp in non-Medicaid expansions states.

Wages are starting to creep up as labor markets begin to tighten and employers find they can’t find the skills they need unless they pay more.  There’s also more job movement, as folks leave their current employer for higher pay down the street.  This from The Economist:

In labour-intensive industries the American way of low pay, low staff retention and low motivation may be a false economy. Perhaps a third of Walmart’s staff are reckoned to quit in any given year, which could be one reason why it often scores poorly for customer service. In 2014 it said inept shelf-stocking cost it $3 billion a year—more than its planned pay rise. As the economy improves, many retailers are busy hiring new staff only to see others walk out of the door…

This may mean – higher indemnity payments, but potentially shorter disability duration as jobs are more plentiful.


Finally, in what has to be one of the bigger deals of this young year, United Healthcare is acquiring PBM Catamaran, which is just about to close their acquisition of work comp PBM/network/medical management firm Healthcare Solutions (an HSA consulting client). This will create a third major PBM to compete with Express Scripts and CVS/Caremark; the new OptumRx (UHC’s PBM)/Catamaran combo will rival CVS/Caremark in size with about a billion scripts annually; ESI remains the market leader.

This may mean – added strength for the work comp PBM business due to more buying power and clinical resources.

Work comp drug trends

Helios has just released their drug trend report covering spend, trends, and influencers for 2013 and 2014.  As the largest – and oldest – WC PBM, Helios has perhaps the broadest and “longest” perspective, able to draw on several decades of data to identify, parse, and analyze trends.

The PBM also has quite the stable of researchers, PharmDs, and technical writers who have combined to produce a report that is both readable and relevant.

A few key takeaways:

  • Drug costs on a per-claim basis are going up, driven by increases in AWP pricing.  The impact of manufacturers’ price increases is dramatic;
    • Generic AWP was up 10 percent in 2014
    • Brand increased 12.5 percent
  • Opioid utilization is trending downwards by almost every measure; fewer claimants are prescribed opioids; the average Morphine Equivalent Dosage has declined; and the number of MEDs per claimant has dropped as well.
  • Meanwhile, compounds now account for 5.6 percent of spend, an increase of almost 37 percent over 2013.

There is a wealth of additional information in the hundred-odd pages from updates on legislative and regulatory initiatives to an explanation of future cost drivers and external factors influencing utilization.

I’d also note that the Report in and of itself is revealing; the professionalism, graphics, attention to detail and broad coverage of all things work comp pharmacy show just how much work comp PBMs have matured.  While the first drug trend reports from a decade ago were helpful, there’s just no comparison.

Kudos to Helios.

What you hear in airport bars…

Earlier this week I ran into a couple of enterprising reporters responsible for a recent stream of articles about workers’ compensation; actually I sat next to them in an Atlanta airport bar.  Evidently they’d been stuck there for some time as they were pretty… chatty…

PhoPublica’s reporters were having a grand old time, reading passages of their work out loud to each other, toasting their skill at turning a phrase, saluting their editors’ genius in assigning them to this story, and planning where they’d display the Pulitzer Prizes certain to come. While there were a couple concerns voiced by industry pundits about a lack of balance or perspective, this didn’t dampen their spirits for long, as one reminded the other they needn’t bother with facts or perspectives contrary to their central theme: Workers are getting screwed by Insurers and Employers.  In fact, they had a term for those contradictory views – “whatevers”, as in, this is about as important to us as parental views on fashion are to teenagers.

They were thumbing through a stack of emails, reports, documents, and studies sent in by work comp researchers; a couple elicited hoots of derision but a few caused some consternation. One in particular from a highly-regarded California research organization had them flummoxed. Evidently their latest article completely misquoted the research organization’s findings; the real data totally refuted PP’s assertion that lots of treatment requests are rejected.

After ordering another round of White Zinfandel, the reporters went back and forth for some time on the right response. I couldn’t make out some of what they were saying, but there appeared to be a debate about the right “strategy” – ignore the real data entirely, bury a correction in a footnote, pretend they never got the message, or send an automated email response along the lines of “We are on vacation in the jungles of Myanmar and will respond when we return.”

This was a tough one, requiring additional sustenance.  Appetizers were ordered (escargot and nachos with brie cheese) and the chatter went on for some time.

In the end, a lightbulb went off; one had the brilliant idea to “correct” the data point but do so AND preserve their central theme – Work comp reform screws employees.

Pen was put to cocktail napkin and after much effort, the intrepid journalists came up with wording implying the treatment requests were only approved because the employers and insurers had bought-and-paid-for the entire review process and all the reviewers.

Genius indeed!

Journalistic integrity preserved, but not at the cost of a) admitting a mistake was made, or b) diminishing their case that Workers are getting screwed by the all-powerful Insurers and Employers.

Their timing was impeccable as well; just as their flight was called, they drained the last few drops of White Zin, scarfed down the few remaining brie-on-toasts, and emailed the revisions to their waiting editor.

Me, I sat stunned, rendered speechless (a rare accomplishment indeed) by the ability of these professionals to get the facts to say what they want them to say, regardless of what the facts actually are.


What does this mean for you?

I thought Fox News was skilled at distortion…they could learn some lessons from PhoPublica!

and btw, check your calendar…

Friday catch up

Another deal goes down, more clarity around IMRs, more data on the impact of the Affordable Care Act – it’s been busy.

First up, Select Medical’s purchase of Concentra.

In what looks to have been a pre-emptive move, Select Medical announced its intent to purchase occ med clinic firm Concentra from parent Humana. (btw great reporting by BI’s Stephanie Goldberg; she has more detail than any other source.)  Concentra, which has about 300 stand-alone clinics and 240+ on-site clinics, claims it handles 14% of all occupational injuries (they refer the more complex ones to non-Concentra providers).

The acquisition makes strategic sense for Select as it adds primary care to its current portfolio of physical therapy, rehab, and long-term care operations.  It also expands Select’s geographic reach considerably, albeit in a different line of business.

We will track the integration of Concentra and Select going forward; expect to see more efforts on the part of Select to work directly with payers, and a stronger negotiating stance with networks now that they have more market clout.

ACA implementation

A big concern and one certainly noted by opponents of ACA was the purported cancellation of large number of employer-sponsored health insurance plans that failed to meet ACA coverage standards.  New data indicates less than 1% of employers surveyed reported cancellations due to coverage standards.

In contrast, somewhat less than 5% of individual policies were canceled due to coverage requirements.

A Robert Wood Johnson Foundation report (thanks to AthenaHealth) report indicates docs are not getting swamped with newly-insured patients seeking primary care.  Key findings include:

  • New patient visits to primary care providers increased from 22.6% of all appointments in 2013 to 22.9% in 2014.

  • The percentage of visits with patients with complex medical needs decreased from 8.0% of appointments in 2013 to 7.5% in 2014.

So far, doesn’t look like primary care providers are overwhelmed – HOWEVER that is national data, and things certainly vary from region-to-region.

While primary care isn’t being overloaded, the health care delivery system is undergoing wrenching changes – with small, safety-net hospitals probably the most affected. Expect to see closings, consolidation, and takeovers as these most-vulnerable providers lacking scale, resources, and brand find they can’t survive.  For a glimpse into the near-term future, track what’s happening in California.

Work comp

The California State Fund is growing, as the market hardens and rates increase in the Golden State.  California is a bit of an anomaly as the market appears to be softening somewhat in the other 49, but a 52% increase in earned premium indicates the State Fund’s moves to rationalize pricing via tiers along with other insurers pulling back from California is driving more business to the Fund.


Finally, great piece from AIS’ Lauren Flynn Kelly on pharmacy’s biggest cost drivers – spoiler alert – the top two are Hep C drugs and compounds…

Enjoy your weekend!

ProPublica’s slanted “reporting” is a public disservice

After several attempts to get the ProPublica and NPR reporters working the work comp beat to see both sides of a very complex “system”, better understand the drivers and dynamics, and correct their errors publicly, I’m giving up.

Clearly, they don’t want to hear anything that doesn’t agree with their superficial and clearly biased view of the work comp system, are quite willing to distort and misuse industry data to support their position, and have an agenda they are determined to promote, damn the facts.

The latest screed from PP continues what is by no measure “reporting”, but rather a bald-faced advocacy effort using anecdotes in an attempt to indict an entire system, to simplistically and cynically post pictures of terribly injured workers to get readers to blame the awful insurance companies, to distort and misuse data to promote their ideological position.

I’m going to elaborate on their misuse of NCCI and NAIC data to tout the high financial “returns” of the work comp system next week; for now I’ll focus on the employer direction issue.

In the original Demolition article, reporter Michael Grabell said:

In 37 states, workers can’t pick their own doctor or are restricted to a list provided by their employers. [italics added for emphasis]

That is categorically false.  I sent a detailed explanation of why and where this is false, provided the background documents from WCRI, and followed up.

Did he correct the original article?  No.

Did he update it and note the mistake?  No.

Did he admit his initial statement was wrong, even in a private message? No.

However, in his latest polemic, he states:

37 states now restrict injured workers’ ability to choose their own doctors. Green states [citing a graphic] allow employers and insurers to choose workers’ doctors, at least initially. Blue states restrict workers to doctors approved by their employer, state, or insurer [italics added for emphasis] or to those in their employers’ managed care plans.

This isn’t a minor oversight or wordsmithing; Grabell’s reporting has been an attempt to show how the work comp system is slanted in favor of employers, and his mischaracterization of WCRI reports clearly is intended to support his position.

There’s something more insidious here.  Grabell is attempting to show that somehow workers choosing their doctors is better, that those awful employers and insurers are just out to screw the worker.

In the vast majority of cases, that’s utter bullshit. (sorry, no other way to describe it). And if Grabell had actually wanted to get the story right, and not just promote his ideological position, he would have talked with employers who are doing everything they can to identify the best docs and get their injured workers to those docs.

In emails and conversations I pointed out to Grabell that the reason employers want control is to prevent injured workers from being harmed by profit-seeking physicians, and suggested he look into physician dispensing of opioids, especially in Florida; the Drobot case where hundreds of workers reportedly received horrible care; and other examples (Illinois prison guards) where profiteering physicians have gamed the system, harmed workers, and cost employers and taxpayers millions.

And I heard…crickets.

What does this mean for you?

This isn’t reporting, it is advocacy.

37 States Now Restrict Injured Worke Ability to Choose Their Doctor

Think about this…

There’s a driverless car on the way from California to the East Coast – today.  Right now.

As of now, the computerized Audi is three days into the trek; using “four short-range radars, three vision-based cameras, six lidars, a localization system, intelligent software algorithms and a full suite of Advanced Drive Assistance Systems” to navigate safely and efficiently on city streets, highways, parking lots, and all manner of other paved surfaces.

This isn’t just a “wow that’s cool” thing.

It portends huge changes in employment in this country – and others.

Traffic accidents kill about 32,000 people a year and injure over 2 million more. Property damage is in the scores of billions of dollars.

So, the computers driving vehicles don’t have to be perfect – they just have to be better than we texting, drinking, tired, distracted, angry, dumb, oh-so-human humans.  Doesn’t sound like much of a challenge for devices that crush we humans in chess, medicine, and Jeopardy

There’s no question – none at all – that automated transport will dominate within two decades – and will be common far before then.  Here’s my superficial sense for what that means.

  • millions of jobs are going away – drivers, body shop techs, spare part manufacturers, auto adjusters, claims personnel. There are 2.4 million truck drivers…
  • some jobs will be created – programmers, radar experts, robot polishers, things I can’t even conceive of.

What does this mean for you?

What’s going to happen to those newly-unemployed? Where are they going to get new jobs?  What will those jobs pay? If a worker is about to be computerized out of a job, are they going to be more likely to file a work comp claim?

Can California’s comp system be fixed?

David Deitz, MD PhD was last up at CWCI, his task to bring it all together by asking an apparently simple and straightforward question:

What can California learn from Washington?

Or put another way, “Can California’s workers comp system be fixed?”


First off, there still isn’t much of a focus on quality of care in California.  Outcomes in workers comp are still worse than in group health – despite more care for many of the same conditions.  Many state systems still rely on judicial, administrative, or otherwise “non-medical” authorities to make decisions about what are essentially medical issues; fortunately California does not. Cue the IMR complaints…

That’s good news; however just by virtue of being a work comp patient, things aren’t so good. A 2005 JAMA-published analysis indicated 83% of studies (175 out of 211) found that just being a WC claimant was associated with worse outcome after surgery.

There’s a lot of research and analytics and reporting in the non-workers ‘comp medical world related to outcomes, costs, and cost effectiveness, with “a lot” especially true when compared to the paucity of such research in workers’ comp outside of L&I, CWCI, and a couple other sources.

Dr Deitz referred to a “massive number of care improvement initiatives that are going on throughout the health care system” (paraphrasing), a trend that will continue with or without, ACA. Again, this may help work comp as better care = better care for work comp too + a healthier population.

David also noted the questions we are encountering in workers comp are nowhere to be heard in the real world; there are no questions about evidence-based medicine in group health.  EBM is embedded in the very fabric of health care contracting, delivery, measurement. It is accepted fact, a core operating principle, fundamental. And the work comp systems would benefit immensely from a healthy dose of EBM.

One supporting data point is what’s happened in Texas, where they named a Medical Director and adopted guidelines, strong UR, formularies, EDI, and measurement of results.  While Texas isn’t perfect, it’s gotten a lot better.

Unfortunately along with Washington, Texas is one of only two states that has made significant progress in adopting changes that have significantly improved medical care delivered to injured workers.  However, it’s not for lack of opportunity.  Dr W Brose’s HELP Pain Medical Network is just one source of high-quality, workers’ comp-specific and relevant data on treatment outcomes.

The money quote – “workers’ comp is the most costly and inefficient way to deliver medical care that humankind has ever invented.”

And care improvement is possible in WC but requires systematic reform.

We have a system that is inefficient, very expensive, and delivers poor quality care.  That has to change.

Dr Deitz’ final point – improvements in workers’ comp medical care MUST happen.




Poor quality of care in work comp and the impact on SSDI and medicare

The estimable Gary Franklin MD, Medical Director of Washington Labor and Industry, weighed in with passion and precision at CWCI; Gary’s message was simple and straightforward:

Workers injured on the job get worse and worse and worse, unlike people with the same injured hurt outside employment.  Why? They become chronic pain patients.  Preventing the transition from acute and sub-acute pain management to chronic pain and the inevitable disability that accompanies chronic pain is critical; that is “secondary prevention.”

Causes of disability and more specifically causes of the decade-long increase in the duration of disability include the:

  • use of harmful treatments including spinal surgery (especially lumbar fusion) and opioids
  • creeping diagnoses that seem to evolve as claims age
  • severely damaging effects of bad providers

A key data point – a case-mix adjusted study indicates patients getting opioids for more than 7 days double their risk of disability for a year.

The takeaway is if patients receiving opioids are not showing improvements in pain and functionality, the treatment should be modified – and not with an increase in opioids.

L&I is working diligently to address the issue of secondary and tertiary disability with an eye towards intervening and re-directing claims before they head too far down the disability “curve”. There are a relatively few docs who are “bad” (perhaps some may be the high IMR filers noted in a previous post).

And that work is paying off; among L&I’s claimants, the percentage of workers receiving opioids 6-12 weeks from injury has decreased from 4.9% in 2012 to 1.1% in Q4 2013.

In contrast, a recent study by PBM Express Scripts indicated that fully have of all patients taking drugs for more than 90 days will still be on opioids in three years.

If anything Dr Franklin is even more passionate, and more compelling, when speaking about lumbar fusion and the disasters associated therewith.  Fully 64% of those getting lumbar fusion are disabled 2 years out, with many of those on SSDI. What’s scarier is California’s outcomes for spinal fusion surgery are significantly and categorically worse.

WA has been able to reduce the percentage of workers who end up on SSDI via their COHE program; clearly their focus on appropriate medical care has been the leading factor.

What does this mean for you?

Crappy medical care by crappy docs looking to make money off the easily-abused workers comp system leads to unnecessary disability, hugely damaged people and families, unknown but certainly very high societal costs.



California’s IMR program – clarity at last.

Much clarity was brought to the IMR process, costs, efficiency, and IMR filers by the next speaker, CWCI SVP and CFO Rena David.  Speaking about 2014 data, Rena noted:

  • 4.1 percent of treatment requests were “IMR eligible”
  • There were about 261,000 IMR service decisions made in 2014
  • Days from application to final determination was 134 in January 2014l that dripped to 50 in December
  • 91% of the IMR reviews upheld the UR decision, and thereby the denial was deemed as appropriate.
  • Overall, 5.4% of all treatment requests are being denied or modified

Pharmacy accounted for almost 45% of requests, with decisions upheld 92% of the time.  And;

  • 12% of IMRs were for compounds, consistent with overall figures; 98% of the time compound requests were deemed to be not medically necessary.
  • 23% of IMRs for anti-depressants overturned the UR decision, the highest percentage for any drug category.
  • Only 2 percent of anti-anxiety medication denials were overturned
  • Oftentimes, information available AFTER the original UR decision was made was used in the IMR process to overturn the UR decision.

There were ten individual providers who represented fully 15% of claims; the top two individual providers each submitted the equivalent of 10 requests a day…

A key takeaway – Rena noted that for judges and other non-medical people to be in a position to determine what medical treatments are and are not appropriate is “unfathomable”.

She also noted that “without oversight, injured workers may receive deleterious care”, citing:

  • A worker anxious abut an an epidural injection was denied propophyl
  • A complete spinal fusion was requested for a 76 year old man with evidence of arthritis.

What does this mean for you?

IMR works, and would be working a lot better if bad actors weren’t jamming the system with spurious requests for damaging, or at best inappropriate, medical services.