Insight, analysis & opinion from Joe Paduda

Jun
8

Can Texas Mutual help Texas’ health insurance/healthcare needs?

Posted by Joe Paduda on Thursday, June 8th, 2023 | Comments

Texas has some rather troubling healthcare problems…and Texas’ legislators are asking the state’s largest workers’ comp insurer to help solve those problems.

First, a few Texas healthcare data points…

Of course, one of the big issues is Texas refuses to expand Medicaid for reasons I must admit are confusing at best.

And the Feds are looking to cut almost $9 billion in funding; Texas has a convoluted tax-and-transfer thing in place which CMS believes is illegal…

I’ve been digging into this of late…collecting background information, interviewing the leader of TM’s new venture and reaching out to legislators behind a bill that asked required Texas Mutual to help (details below); TM is in the process of standing up a health insurance entity that will begin operations early next year.

From the State’s website:

HB 3752 allows a subsidiary of the Texas Mutual Insurance Company to provide a health insurance product to Texans. The goal is to increase access to affordable health insurance for individuals, especially those in rural communities, and employees of small businesses.

Effective Date: September 1, 2021.

The bill would also require the company to fully explore methods to increase health insurance competition, use innovation to increase quality of care for lower costs, avoid discriminating against patients with pre-existing conditions and provide transparency when developing health benefit plans.

(3)  ensuring adequacy of benefits and access to care for individuals in this state with preexisting conditions;

(4)  issuing coverage in a manner that does not discriminate against individuals with preexisting conditions;

Not later than September 1, 2022, the company shall submit to the legislature a report explaining how any anticipated health benefit coverage offerings would comply with all considerations and guiding principles for developing health benefit coverage offerings under Subsection (a).  This subsection expires January 1, 2023.

Gotta admit, this is a head-scratcher.

 

Jun
7

Work comp provider networks and access to care

Posted by Joe Paduda on Wednesday, June 7th, 2023 | Comments

Of late there’s been “confusion” in several quarters about the impact of provider networks/PPOs/specialty networks on access to care and outcomes.

These uninformed or willfully ignorant folks claim all manner of bad stuff is due to workers’ comp provider networks – without an iota of evidence to support those assertions.

Let’s pick on the Golden State…

Let’s be clear…actual research shows:

there is NO significant difference in access to care for patients treated within or outside a Medical Provider Network.

This from CWCI’s report…

Similarly, there was no significant difference in distance from the patient to provider between MPN and non-MPN patients.

Quoting CWCI…

The latest proximity to care findings also track with results of CWCI’s April 2021 research which found that 99 percent of claims in which treatment was rendered by an MPN provider, and 98 percent of non-MPN claims met the state’s access standards.

What does this mean for you?

Do NOT give any credence to statements similar to: “of course, paying providers less than fee schedule affects access to care” UNLESS they are backed up by real research and not built on a pile of unfounded and unsupported assumptions.

Jun
6

the basics of price and spend in work comp medical…

Posted by Joe Paduda on Tuesday, June 6th, 2023 | Comments

Basics here folks…

Facility costs soak up 2 out of every 5 dollars of work comp medical spend.

“Physician” costs take up another 2 bucks…however that is misleading.

In NCCI-speak, “physician” is a catch-all for most practitioners…MDs, DOs, PTs, chiropractors, PAs…and, the “physician” fee schedule in most states doesn’t apply to things like physical medicine (PM).

Historically PM accounts for right around one of every 6 work comp medical dollars (yes that is a very solid number based on a ton of work I’ve done), although like everything in work comp it varies somewhat by state.

Then there’s drugs, dx imaging, DME, etc.

Drugs account for less than 10% of spend, a figure that has been declining for years thanks to much better clinical management of pharmacy  – mostly by PBMs – more generic usage, a massive decrease in overuse of opioids, fewer new brand drugs used for MSK injuries, and declining fee schedules.

Risk and Insurance’s Annemarie Mannion penned an excellent explanation of how Medicare reimbursement affects work comp fee schedules.  Read her piece and save it in your reference files…you will need it in the future.

Finally, network penetration does have some effect on prices paid…although that impact has declined over the last few years as providers have figured out that when it comes to negotiating with health systems, workers’ comp is pretty much clueless.  Here’s a synopsis of network impact from a post a couple years back.

 

Jun
1

that giant sucking sound…v3

Posted by Joe Paduda on Thursday, June 1st, 2023 | Comments

is hospitals hoovering dollars out of employers, work comp insurers, and taxpayers’ wallets.

(sorry all…due to a bug in WordPress some of you may be getting this again)

WCRI’s latest research report on hospital costs is a must-read for anyone involved in work comp claims, medical management and actuarial issues. Kudos to Drs Olesya Fomenko and Rebecca Yang for their excellent work. 

The study focuses mostly on how payments for outpatient surgery vary across the different types of fee schedules (no fee schedule vs fixed amount vs cost to charge ratio vs percent of charges…)…and how those payments have changed over time.

But there are several other issues that I’d argue are more impactful.

  • It’s not so much the type of fee schedule as other factors…
    • there’s a LOT of variation between states with the same type of FS
    • failing to expand Medicaid is a big problem for hospitals
  • Basing fee schedules on percent of charges is a really bad idea…
    • states with %-of-charges FS had – by FAR – the highest costs, averaging more than 3 times what Medicare pays. (Medicare reimbursement is slightly above break-even for hospitals)
    • `hospitals easily game the “fee schedule” by jacking up list prices
    • 2 of the three states with the largest increases in hospital payments had FS based on %-of-charges
  •  States with NO fee schedules were not quite as bad – averaging “only” 225% of Medicare
  • Clearly network arrangements have failed miserably. 

What does this mean for you?

Actuaries…check the inflation trend to predict where costs will be in the future

Medical management folks…dig into your data to identify the worst offenders, and direct care AWAY from them.  Hint – HCA facilities are usually among the worse offenders.

Bill reviewers – STOP relying on network discounts and start getting  LOT smarter about dealing with facilities.

May
31

More hospitals are going to close

Posted by Joe Paduda on Wednesday, May 31st, 2023 | Comments

More than a quarter of rural hospitals in Texas, Kansas, Mississippi, Alabama, Georgia, South Carolina and Tennessee are at immediate risk of closing. 

Notably these are all states that have refused to expand Medicaid and therefore have a lot of people without health insurance.

The problem is exacerbated by the end of the Public Health Emergency which means more people without health insurance will be seeking care at hospitals at imminent risk of closing. 

Check out your state’s situation here…

What does this mean for you?

If you live in the rural south, stay healthy, don’t have an accident, and don’t get pregnant.

May
26

US healthcare quality is poor because…

Posted by Joe Paduda on Friday, May 26th, 2023 | Comments

Consumers don’t care.

Yesterday we dove into the disconnect between patient satisfaction (my nurse was sooo nice and my room…wow!) and quality of care (how likely was I to die).

Today, we focus on how this affects our healthcare. Or, as the researchers put it;

In an era of management by satisfaction survey, how does hospital competition shape the kind of medical services offered to patients? 

Leaving out the coefficients, standardized deviations, null estimates and other researchers’ esoterica, we find:

Local competition among hospitals leads to higher patient satisfaction, but lower medical quality. 

Yep, because we consumers value quiet rooms and nice nurses more than surviving an operation, health care facilities seem to focus more on quietness and niceness than on, you know, patients actually surviving.

And that’s because hospitals are competing desperately for private-pay patients, the ones insured by employers that pay three times more than Medicare. As the authors put it;

as a business strategy, investing in hospitality and hotel amenities offers a much higher return than medical quality. 

this research speaks to broad concerns about the unintended consequences of marketization…Hospitals have traditionally been conceived as an essential service to a community, but are becoming more like products in a consumer marketplace.

Those working in hospitals are increasingly expected to focus on the pursuit of customer satisfaction.

The day-to-day institutional question is shifting from “will this improve patient health?” to “will this raise satisfaction scores?” 

What does this mean for you?

Depends… life > comfort?

May
25

Patient satisfaction ≠ Quality of care

Posted by Joe Paduda on Thursday, May 25th, 2023 | Comments

Health care quality is a huge issue in the US; despite claims that we have the best healthcare in the world, reality is far different.

Why?  I’d argue its because healthcare consumer behavior drives our for-profit system.

What makes patients happy is completely unrelated to the actual quality of medical care they receive – or how likely they are to die.

Research article is here.

the horizontal axis indicates hospital performance by deciles for each category…note patient satisfaction doesn’t vary by hospital mortality and varies just a little by medical quality, but varies a LOT by nurse communication.

The effect of nurse communication on patient satisfaction is four times larger than the effect of the hospital’s mortality rate. Yup, as long as the nurse smiles, is responsive and nice, we’re satisfied. Never mind if we’re a lot more likely to die.

Another oft-measured factor, the quietness of the rooms, has a 40% larger effect on patient satisfaction than medical quality.

This is because hospitals provide two separate and distinct kinds of services  – the technical delivery of medical care and “room and board-related” services. Patients are much better at observing and rating the “hospitality” part of their hospital stay than the medical care they get.

To quote the authors;

Hospitality is the fast track to customer satisfaction in medicine. 

What does this mean for you?

Customer satisfaction is the fast track to profits… not to good medical care.

May
23

Work comp drugs – Three things

Posted by Joe Paduda on Tuesday, May 23rd, 2023 | Comments

Workers’ comp news…

After a long and litigious delay, myMatrixx has been awarded the contract to manage pharmacy benefits for the Coal and Energy programs run by the Federal Department of Labor’s Office of Workers’ Compensation Programs (OWCP). Details of the case – which involved a protest by rival PBM Optum – are here.

That’s the good news (the Feds should have had a PBM managing these programs years ago).

Now, the bad news.

The press continues to dive into the audit of the other OWCP program – the one that provides workers’ comp to all Federal employees (FECA). [audit report is free for download here]

The latest is from Leslie Small of AIS Health. [available at no cost via free trial subscription].

From Ms. Small’s piece:

  • “OWCP has been doing a poor job of both controlling the FECA programs spending on prescription drugs and implementing its own policies to ensure that prescriptions are being appropriately dispensed, said the OIG report.”
  • OWCP published a bulletin in 2011 that forbid reimbursement for fast-acting fentanyl prescriptions unless claimants had been diagnosed with a certain type of cancer…during the audit period…98.7% of the fast-acting fentanyl scripts that OWCP [and taxpayers] paid for “went to claimants without evidence of one of hte eligible cancer diagnoses” 
  • Even more troubling – if that’s possible – OWCP did not institute controls to mitigate opioid usage until the end of 2016, years after many commercial insurers, third-rate administrators, and large employees had done so…”

Here’s hoping this much-needed attention results in even-more-needed improvements.(my opinion only)

Drug costs in California are getting well deserved attention again; CWCI’s research identified 9 drugs – 3 each opioids, dermatologicals and antidepressants – that account for a significant percentage of total drug spend. CWCI members can get the full report at no cost; it’s $18 for others.

Briefly, branded anti-depressants, tapentadol/Nucynta, and the three anti-depressants make up a small percentage of scripts but a big percentage of dollars.

Of course, in the vast majority of cases the dermos are just BS drugs that should never be allowed…

What does this mean for you?

Don’t sleep on pharmacy...sure costs are down, but it still has a major influence on recovery, RTW, and claim closure.

May
22

Wildly off-topic…F-16s

Posted by Joe Paduda on Monday, May 22nd, 2023 | Comments

Russian general when he learned about F-16s heading to Ukraine…

Вот чёрт!!

From Phillips O’Brien…

Its impossible to exaggerate the intensity with which Ukrainians from all walks of life, from the top of the state and military to civil society, were focussed on getting F-16s for the Ukrainian Air Force.

Why F-16s are critical…

  • Ukraine’s Air Force is woefully behind the times, their main fighter – the Mig-29 – has been around for 40 years and is beyond obsolete. 
  • Getting spare parts for the UAF’s Migs is getting harder and harder.
  • F-16s are very, very capable – military-speak for they can do lots of things well.
    • shoot down other planes
    • support ground operations
    • launch missiles to hit targets hundreds of miles away
    • shoot down incoming rockets and missiles
  • Unlike the Mig-29, F-16s have constantly upgraded
  • Unlike many other planes, they are relatively simple to maintain and there is a huge stockpile of spare parts

The net is there is no other single airplane that fits the bill as well as the F-16.

Okay, it’s gonna take a very long time to train Ukrainian pilots on the F-16…

Well, no.

An internal US Air Force document indicates Ukrainian pilots  – with almost no training – could execute complicated maneuvers albeit it in an F-16 simulator. Multiple sources indicate Ukrainian pilots can be flying the F-16s in combat a few months.

And…

It’s unlikely the F-16s will have much of an impact on the already-started/upcoming Ukrainian offensive, but they will play a major role in Ukraine’s likely long war.

What does this mean for you?

More good news for Ukraine, and bad days for Russian butchers.

May
18

WCRI’s new leader speaks

Posted by Joe Paduda on Thursday, May 18th, 2023 | Comments

One of my favorite people in workers’ comp is now heading up WCRI…I connected with Ramona Tanabe who was named President and CEO. making her the third leader of this august institution.

here’s our conversation…