There’s no BIG problem in work comp pharmacy – and that’s scary.

In the fourteen years I’ve been surveying work comp payers on their views on pharmacy, I’ve never seen so little consensus among respondents on emerging issues.

In past years compounds, physician dispensing, opioids, price inflation, and new drug introductions have all been named by at least a plurality of respondents. Not so this year.

Here are some of the 24 respondents’ concerns:

legalization of marijuana – lots of talk about it but concern is what do you do about it, how do you handle it, pay for it, authorize it, etc. so many unknowns and little understanding
state regulations and how to bring information on those changed regulations and how to operate under the new regs back to adjusters and case managers at the desk level and to PBMs
I’m concerned we’ll see branded topicals increasing over the next few years despite a lack of efficacy and inflated prices. teracyn, speedgel, etc aren’t useful
advent of all new formularies, no one has grappled with legacy claims in that environment, thinking is formularies will get docs to taper it off – docs who prescribe all this don’t know how to taper, so finding the right docs and facilities is a real issue for legacy claims
acquisition of comp pbms and consolidation of the work comp PBM industry
Physician Dispensed Drugs and non-controlled home delivery – not just cost but formulary and safety and quality of care
what interventions can they do to to affect drug pricing, especially some of the drugs that have minimal alternatives
more problematic than opioids is the combination of benzodiazepines and sleep aids
watching very closely Evzio, naloxone prescribing practices as part of CDC
still a soft market so anything you can do to reduce costs is important

While payers are seeing good success in reducing opioid utilization and total drug spend, there are a host of troubling issues out there.

Here’s why this is a big issue.

Payers are all too used to getting screwed by unethical and very creative profiteers intent on sucking money away from employers and taxpayers by exploiting loopholes. Branded topicals, “independent” mail order pharmacies and novel drugs are all great examples of these tactics, often hidden under and supported by claims that these promote healing and health despite a total lack of supporting evidence.

In past years when doctor dispensing, the opioid crisis, or compounds were top-of-mind for most respondents, the industry joined together to come up with solutions. That obviously isn’t the case today, leaving patients exposed to crappy providers interested only in profits coming up with myriad ways to game the system.

What does this mean for you?

It’s not the one big problem that’ll get you, it’s the many small ones you may not even notice.

Big news in work comp pharmacy

Finishing up the Annual Survey of Prescription Drug Management in Workers’ Comp this week (I hope!).  24 payers responded this year – TPAs, Insurers, State funds, and very large employers. Each provided specific data about their pharmacy programs, data which provides remarkable insights into what’s really going on.

Something jumped out at me that I had to get out immediately…

Two big takeaways – drug spend dropped by almost 10 percent…

while opioid spend decreased even more – almost 14 percent.

Wrap your head around that.

Work comp PBMs and payers succeeded in eliminating one of every seven dollars spent on opioids; yes, overall drug spend was down a full 10 percent, driven in large part by lower utilization of opioids.

When opioids are eliminated, the drugs needed to counteract their awful side effects – everything from constipation to sexual dysfunction to gastrointestinal distress to depression – are reduced as well.

The programs, processes, analytical resources, clinical staff, research, and patient outreach that’s driven this stunning result are largely PBM-delivered (with some notable exceptions).  These services are clearly improving the quality of care delivered to work comp patients, while reducing costs for employers and taxpayers.

shipload of opioids has been taken out of circulation, eliminating the possibility of diversion, misuse, or abuse.

What does this mean for you?

Healthier patients, lower costs, reduced disability. 

 

Reducing opioids CAN reduce pain

Yes, patients can be weaned off opioids AND reduce their pain levels.

That’s the conclusion of a Vox article providing an excellent, detailed, and thorough review of a study published in the Annals of Internal Medicine Vox (thanks to Health News Review for the head’s up).

Here’s the abstract’s conclusion…

Very low quality evidence suggests that several types of interventions may be effective to reduce or discontinue LTOT [long term opioid therapy] and that pain, function, and quality of life may improve with opioid dose reduction.

Let’s parse this out.

The AIM study was based on a review of 67 clinical studies; it wasn’t “primary research.” Researchers found most of the studies on this issue had either a poor methodology or low sample size. And, relatively few were even of “fair” or “good” quality.

The 12.000 pain patients in these studies volunteered to taper off opioids; they were obviously motivated and wanted to make the change. So, it’s not possible to use this research when thinking about how to address non-volunteers as “involuntarily pulling patients off the drugs (may not) lead to similar outcomes.”

And this…

Crucially, the studies also looked at what happened when these reductions in opioid doses were paired with alternative treatments, including alternative medicines like acupuncture, interdisciplinary pain programs, and medication-assisted treatment for addiction. This is very, very different from a situation in which a patient is taken off opioids and effectively left stranded without any other form of care.

Conversely,

[the CDC concluded] there are simply no good long-term studies looking at the effects of opioids on long-term pain outcomes, while there are many studies showing that long-term opioid use can lead to bad results in other areas, including addiction and overdose.

Here’s a major point made in the study and Vox article – we HAVE to stop looking to opioids as a first-and-only line of treatment for pain.

the lack of access to non-opioid strategies may be one big reason that doctors resorted to opioids in the first place. The drugs offered an easy answer — if ultimately an ineffective one — to the many problems doctors faced, including patients who had complicated pain problems that physicians didn’t fully understand and tight schedules driven by the current demands of the health care system that made it hard to take the time to work through a patient’s individual problems. [emphasis added]

AND, we HAVE to allow/encourage/pay for alternative treatment.

What does this mean for you?

Suggest different initial treatments for pain, and get creative when helping patients who want to get off opioids.

Friday catch-up, innovation, and what kills it.

A few items of interest from around the work comp world…then a brief discussion of what works, and what doesn’t, in driving innovation.

Brian Allen’s now with Mitchell International’s ScriptAdvisor PBM operation.  A highly experienced government affairs professional, Brian’s been in the business for longer than he might admit.  Good pickup by Mitchell, which has rapidly grown its work comp pharmacy business and is likely the third largest PBM.

The fine folks at BWC Ohio have done exemplary work reducing overuse of opioids. Under the leadership of John Hanna MBA, RPh, over the last five years, BWC saw:

  • 44% fewer patients were taking opioids,
  • 48% lower opioid consumptiomn overall,
  • a prior authorization turnaround time of 4 hours (!) down from 2.5 days,
  • overall drug costs were down 7.7% year over year,

John and his folks have saved countless lives, prevented untold misery, significantly reduced employers’ and taxpayers costs, and done it all at a governmental organization. Yes, they have some significant advantages, but so do you.

John’s retiring this fall, but I fully expect BWC to continue to make progress as Nick Trego PharmD takes the reins…

And yes, I do have a man-crush on John.  I have huge respect for him. Thanks WorkCompCentral for the tip.

Innovation CAN happen in insurance – here’s a quick case study of one company’s pursuit of improvement via incremental, evolutionary, and disruptive innovation. 

Here’s the summary – but you really should read this.

Creating a culture of innovation is about much more than hiring a Chief Innovation Officer or creating a new department.  Culture change takes time and significant effort, and shifting culture toward innovation is no different. The process may start at the top, but it’s fundamentally about getting all employees involved.

But bureaucracy can frustrate innovation…

Also from Harvard Business Review, a piece on how bureaucracy screws up business and results and frustrates people.

(respondents) reported spending an average of 28% of their time—more than one day a week—on bureaucratic chores such as preparing reports, attending meetings, complying with internal requests, securing sign-offs and interacting with staff functions.  Moreover, a significant portion of that work seems to be creating little or no value.

But here’s the key takeaway – “Only 20% of respondents said that unconventional ideas were greeted with interest or enthusiasm in their organization. Eighty percent said new ideas were likely to encounter indifference, skepticism, or outright resistance.”

Don’t miss this HWR

This month’s Health Wonk Review provides great insight into where healthcare is headed – and what we need to watch for.  Thanks to Health System Ed’s Peggy Salvatore for mining the best of the blogosphere.

A couple of don’t miss posts:

Who Really Needs the Public Option? Trump Country, Trump Country is most in need of a way to bypass the ACA marketplaces entirely. Democrats’ favorite policy option – the public option – would be most valuable in precisely the deep-red areas that went most fervently for Republicans and the President.  Get it all here.

And friend and colleague Tom Lynch focuses on workers’ compensation cost control has focused mainly on lowering medical costs, which is almost always an outsourced function. Consequently, many employers have relinquished control over their workers’ comp program, migrating away from best practices that are at the heart of true workers comp cost control. Read the full blog here.

Healthcare reform – Implications for work comp, Part 2

We’re all suffering from repeal-and-replace exhaustion, so I’ll keep this light and entertaining.  Or at least try to.

Quick – Is work comp the lion or the gazelle?

With ACA very likely to remain the law of the land, here are the over-arching implications for workers’ comp:

  • Growing cost pressure on providers from group health and governmental payers will make those providers increasingly look to work comp to replace “lost income”
  • Healthier workers will heal faster and need fewer healthcare services

Revenue maximization is the industry term for getting as much revenue from each patient as possible.  This entails:

Rest assured work comp is one of the payers in the cross-hairs of “revenue maximizers”.

Next, as those with coverage likely won’t lose it, and we may see even more folks covered if other states adopt Medicaid as we discussed yesterday, the good news is

Can we quantify this?  Not yet, but the research clearly indicates health reform has been good for comp.

As providers adopt new revenue maximization approaches, will work comp be able to keep them at bay?

What does this mean for you?

Which gazelle will you be – the one resting in the lion’s jaws, or his slightly faster brother?

Healthcare reform implications for workers’ comp, Part 1

With Congressional efforts to repeal/replace/revise ACA behind us for now, it’s time to consider what all this means for workers’ comp.

First up – Medicaid expansion

Currently 32 states have expanded Medicaid; 19 have not. Expect more states to consider expanding Medicaid as the combination of Federal dollars and struggling hospitals makes a compelling case for state adoption.

In addition, the Trump Administration may well allow states more flexibility in expanding Medicaid, and this will likely lead to more states opting in. For example, Arkansas has applied for permission to add coverage to a more limited population…other states will almost certainly follow suit.

Other states, including Texas, are facing the dual realities that their poorer citizens’ health status is declining, and hospital financials are deteriorating as well.

A couple data points illustrate the linkage between Work Comp and Medicaid

63% of Medicaid recipients have at least one family member working full time. This varies among states, from 77% in Colorado to 51% in Rhode Island. 15% have a part time worker. Only 19% of recipients’ familes have no one working.

Many employers (e.g. those with <50 FTEs) that

  • don’t provide health insurance &/or
  • aren’t required to provide health insurance under ACA
  • &/or have a lot of part time workers who don’t qualify for employer-sponsored health insurance

recommend workers who qualify sign up for Medicaid.

The potential implications for claiming behavior are apparent.

We all know workers comp premiums are driven by employment. Most credible studies indicate Medicaid expansion increased employment in states that expanded Medicaid.

More employment = more payroll = more workers’ comp premium and more claims (NOT higher frequency, which is a percentage and not a raw number)

There’s also implications for disability filings…A just-published study found “a 3-4 percent reduction in the number of people receiving supplemental security income… in states that expanded Medicaid.”

What does this mean for you?

The work comp industry dodged a bullet when Congress didn’t repeal ACA. However, watch carefully as other efforts to de-fund and otherwise cut back on Medicaid are ongoing.

 

Opioid Exceptionalism – why these drugs are different than all others

Greetings – David Deitz here. Joe has kindly offered to let me provide a guest post on the latest report on the opioid epidemic from the National Academy of Sciences, Engineering and Medicine (NASEM). The report is available here. It’s also 389 pages long in its current pre-publication form, and because I think there are some really worthwhile parts relevant to many of you who follow MCM, I’m going to give you my summary of the highlights.

The quick take – opioids are fundamentally different from other drugs due to the harm they can cause – and the FDA should consider this when addressing opioids. (JP observation)

Why is this report important and why should you care? Well, for one, the opioid epidemic is a true, deadly epidemic, that has left few areas of America untouched. As NASEM puts it (emphasis mine):

Current national trends indicate that each year more people die of overdoses—the majority of which involve opioid drugs—than died in the entirety of the Vietnam War, the Korean War, or any armed conflict since the end of World War II.

That’s about 90 a day. Every day. I don’t think that’s “opioid hysteria”. And WC has a lot of reasons to care, since analgesic drugs, most of them opioids, are the principal drugs prescribed for occupational injuries.

It’s worth noting that last week also saw the release of the interim report from the President’s Commission on Combating Drug Addiction and the Opioid Crisis. This report urged declaration of a national emergency – more on that below.

As many of you recognize, this is an incredibly difficult public policy issue, in which the legitimate needs of millions of patients with acute and chronic pain must be balanced with the harms opioids create. The earlier IOM report on pain in 2011 really punted on this one, but the NASEM gets right to it in the introduction:

  • How exactly does a regulator….balance, for any particular regulatory action limiting access to opioids, the otherwise avoidable suffering that patients with pain would experience against the harms, not only to those individuals and their families but also to society, that would be prevented by the restriction? (pg 1-16)

The answers from NASEM are brilliant, well-reasoned and based on large servings of evidence – not only on opioid harms, but also on efficacy for chronic pain, likelihood of use and abuse in different contexts, alternative treatments, epidemiology of addiction and value and availability of various opioid addiction treatments, to name only a few. One of the most valuable concepts going forward is the doctrine of “opioid exceptionalism” a term coined by co-author Dr. Aaron Kesselheim in the NASEM webinar (you can get the slides here).

Put simply, opioid exceptionalism means that the FDA, as well as other public agencies, should go beyond the risk/benefit paradigm they currently use for new drug approvals that is based on individual patients and consider the implications of an individual opioid to patient’s families and society.

In other words, public health considerations need to come in because the societal implications are so large for this category of drugs. Drug manufacturers and some pain management professionals (and probably, libertarians) aren’t going to like this, but I think NASEM makes a compelling case that business as usual isn’t going to reverse the trends. They don’t really mention the workplace much as part of the public health discussion – there’s an opportunity for ACOEM to push up to the table.

I won’t review all of NASEM’s public policy recommendations, but some have implications for WC, including:

  • Improved reporting and data collection. This has to include WC if it’s going to be complete.
  • A call for insurers to reimburse for comprehensive pain management, including interdisciplinary approaches. Many in WC do, but it has to get better.
  • Better patient and public education about opioids. Again, a role for WC here beginning at the first emergency department or occupational medicine clinic visit.
  • Expanded treatment for opioid use disorder. There are cost implications for employers here, but it’s the right thing to do.

Meanwhile, the President’s Commission mostly agrees, and provides some of the same recommendations. Unfortunately, there are some thorny political problems with that emergency declaration (which I agree with) – it’s difficult to reconcile recommendations to “rapidly increase treatment capacity” and expand benefits for substance abuse treatment with cuts to Medicaid.

The NASEM is the meatier of the two, is better thought through and overall is one of the most comprehensive public policy documents I’ve read in a while. Take a few minutes to look at the slides, they are a good summary of the recommendations. Where do they touch your organization?

Let’s not just hope that the NASEM report makes a difference, but do what we can to ensure it.

David Deitz, MD, PhD is principal of David Deitz & Associates, a healthcare consulting firm based in Massachusetts.

 

Tuesday catch-up

Lots happening this August – clearly not everyone is on holiday.

One personal note – I joined the Board of Commonwealth Care Alliance, a not-for-profit healthplan serving Medicaid and dual-eligible clients in Massachusetts. CCA takes care of the toughest population in the country; the poor, disabled, elderly, homeless, and chronically ill, and they do it very, very well. There’s a lot to be done, and I’m honored to help these amazing people.

An excellent piece by Brian Klepper exposes the reality of the commercial health insurance industry – the more care costs, the more insurers make. While I would take issue with Brian’s over-generalization about how insurers make money (a percentage of healthcare costs), the implications are vast – a medical-industrial complex now consumes a sixth of our GDP.

This is part of what’s crushing middle class America, squeezing out dollars for infrastructure, education, and innovation, and enriching a few while impoverishing many.

One who just got his virtual head handed to him is Martin Shkreli, the arrogant horse’s ass who bought a tiny drug company and jacked up the price of their drug by 5000%. He was convicted on various fraud charges unrelated to the price increase.

The real lesson here is how easy it was for Shkreli to do what many others have done – make huge profits off our for-profit healthcare system. Most just do it very quietly.

Lemonade is launching in New Jersey.

This is a very, very big deal, with insurance about as different from traditional insurance as you can get.

  • Lemonade sells homeowners and renters insurance in four states and has licenses in 9 more
  • It is a Certified B-Corp – underwriting profits are donated to nonprofits picked by policyholders.
  • It makes its money from a flat 20% fee
  • Premiums belong to the insured, not the insurer. Any unclaimed or unpaid funds are returned at the end of the year at the Giveback.
  • 10% of Lemonade’s 2016 revenue went to 14 different not-for-profits

Scoff or smirk if you will – these guys and others like them will become a major force in property and casualty insurance.

Including workers’ comp…

Workers’ comp

First up, a bit more intel on the OneCall – Spreemo “deal” following up on last week’s post…Most of Spreemo’s employees will move to OCCM, with just a handful staying behind at Spreemo. It’s not clear what Spreemo will be doing in the future, but the company’s unlikely to deliver the kind of returns owner Pamplona envisioned when they invested a couple years back.

A while back NCCI published a piece on an injured worker’s catastrophic injury. Leaving aside the poor decision that led to the injury, what’s interesting to me is how the work comp insurer approached the injury – a potential amputation. While the article doesn’t get into this, my sense is if the worker had been hurt off the job, his health insurer would NOT have gone the extra mile to try to save his leg. However, because future earnings and disability are critical to work comp, his insurer – Nationwide – was very motivated to do whatever it could to keep him whole.

The estimable Ed Bernacki MD PhD and colleagues published a paper (thanks David Deitz MD PhD for the heads up) that concludes:

Occupational injury claimants 40 years of age and older with unilateral knee and shoulder symptoms ascribed to a work event tend to have bilateral age-related MRI changes. Age-related disorders should be distinguished from acute injury.

In English, we older folks have age-related problems that aren’t caused by our jobs…

 

 

California’s work comp formulary

California’s work comp pharmacy formulary process is moving ahead, but I have grave concerns in two areas – timing and cost.  (these are my personal concerns and are not intended to represent the views of CompPharma, LLC.)

First, timing.

The rules writing process is ongoing, while the formulary is slated to be implemented January 1, 2018. 

The rules aren’t even finalized yet, and it’s August.

That’s less than five months away.  Five months for PBMs, payers, prescribers, patients and pharmacies to make massive changes to processes, internal formularies, IT systems, contracts, call scripts, and a thousand other things.

Next, cost.

I’ve talked with regulators, PBMs, payers, employers, about this issue, and tried to re-engage w regulators, without a whole lot of any success.

Regulators have told me that the drastic cut to the fee schedule won’t be a problem because:

a) Payers can pay for clinical and program management costs separately
Well, no.
Unbundling pharmacy management services is a non-starter.
 Most payers don’t have the ability to do pharmacy management inhouse, so they rely on their PBMs. Regardless the payers would have to figure out what should cost how much, and how to charge their employer customers for clinical and program management services. Payers don’t have any way to do this without massive IT changes plus re-doing their internal cost-allocation processes, and/or re-negotiating contracts and policy terms.

b) Payers can just pay above the fee schedule
Again, highly unlikely.
Most payers can and/or will NOT pay above fee schedule. Many TPAs and insurers are precluded from doing so in their contracts with employers, and most would have to re-program IT, reporting, and bill review systems. Plus, many employers just flat-out refuse to pay above fee schedule.

Now there’s a new formulary in the offing, one that will demand even more from PBMs. There remains much uncertainty around implementation details while the implementation date draws ever closer. Setting aside the very real problems inherent in unbundling clinical and program management services, there’s no way PBMs, payers, and pharmacies could plan for and implement all the things they’d need to do to implement an unbundled or above-fee-schedule pricing methodology by January 1.

The bigger issue is this – California employers’ drug costs have declined for several years, opioid and compound usage is down significantly, and the drastic cuts to the fee schedule plus increased costs to implement and manage the formulary are going to:

  • make it harder for all parties to implement the formulary; and
  • make pharmacy management a huge money-loser. 

I don’t understand the logic here.

PBMs have been instrumental in cutting opioid usage in California every year for the last five years, investing huge sums in work that dramatically increases patient safety, reduces employers’ costs, but actually reduces PBM revenues and profits. 

Now, regulators want to further cut PBM revenues while adding a LOT more work to pharmacy management…

That’s not to say the formulary in and of itself isn’t a potential positive.

From Alex Swedlow…

This formulary is an important step forward.  The legislative intent was to increase quality of care and lower the high cost of drugs and the huge frictional costs associated with managing those drugs.

The formulary and regs that link prescriptions to the standard of care (MTUS) will raise quality of care.  The exempt, special fill and perioperative drug lists will reduce some of the dispute resolution costs.  UR is supposed to be for low frequency, high cost treatment like inpatient services, less so for high frequency low cost care such as pharmacy.  That said, those who seek to exploit the new rules and regulations have the incentive and creativity to do so. 

Solution:

  1. Delay the implementation of the formulary and related changes for at least six months after the rules and regs are finalized.
  2. Significantly increase the drug fee schedule.

What does this mean for you?

Adding a lot of complexity to the drug approval and delivery process while continuing to slash reimbursement will lead to unintended and potentially adverse consequences.

 

Note – I’m president of CompPharma, a trade group for work comp PBMs, but fee schedule changes and the like have no financial impact on CompPharma or me personally.