Month: March 2012

Mar
16

How much will opioids really cost you?

Posted by Joe Paduda on Friday, March 16th, 2012 | Comments

A lot more than you think.
I met with a large workers comp payer recently to discuss (among other things) their strategy regarding long term work comp claims; they have over forty thousand claimants that have been on opioids for extended periods.
The research strongly suggests most of these claimants are addicted/dependent. Others may be diverting, and still others may be hyperalgesic (much more sensitive to pain as a result of long-term usage of opioids).
None of these are good, and most have serious and very costly implications for claim costs.
– very few individuals on opioids are going back to work (while on drugs)
– very few payers are screening for addiction, so they really don’t know if/how many of their claimants are addicted – and therefore don’t know how the potential financial implications (either pay for opioids forever, settle at a very high cost, or treat and successfully resolve the addiction)
– claimants using opioids are at much higher risk for death; one client identified almost sixty claimants that died last year that appeared to die as a result of prescription drugs prescribed for their work comp injury.
– I get the sense that most payers haven’t adequately reserved for these claimants, although the stiff stance of CMS may force them to do so if they have any hope of settling some portion of the block of claims.
This doesn’t have to inevitably become a financial disaster for insurers or employers, although it undoubtedly will for those who don’t take action.
Payers must work with their PBMs to dramatically reduce their exposure. This requires both parties to:
a) identify long-term users,
b) mine their data to determine which claimants may be abusing/misusing/diverting and involve SIU where appropriate,
c) channel appropriate claimants to addiction screening, allocate the resources necessary for weaning and recovery and recognize this will include behavioral therapy will find they can.

What does this mean for you?
These claims are NOT going to resolve themselves. You own it, and you’re going to own it until you’ve got an effective, working plan in place.

Mar
15

The legal strategy to defend health reform

Posted by Joe Paduda on Thursday, March 15th, 2012 | Comments

There’s a seemingly intractable conflict facing the Obama Administration – how can they argue – simultaneously – that the mandate is crucial to the Affordable Care Act, while also arguing that the rest of the Act should and can survive if the Supreme Court rules the mandate is unconstitutional?
That’s the Hobson’s choice facing lawyers arguing for the Administration, and while the two positions seem irreconcilable, they may not be.
Merrill Goozner is convinced the two positions can comprise a reasonable and legally logical argument. He cites a recent article in the NEJM, to wit:
“Legally, however, the positions are consistent: the mandate may be an important part of the statutory scheme, and thus constitutional, but not absolutely vital, and hence completely severable.”
Of course, if the mandate is struck down but the rest of the law stands, the insurance industry will scream bloody murder, as they should. Other provisions of ACA prohibit insurers from medically underwriting health insurance, require standard benefit plans, and force insurers to sell coverage to anyone who can afford it.
Therein lies the rub. As Merrill points out, insurers will have to increase rates to pay for free riders who opt into coverage when they need care only to drop it when they’re all better. Then again, that’s not much different from today; there are millions of free riders that get care essentially paid for by taxpayers and others who have health insurance.

Mar
13

The next deal in workers comp managed care

Posted by Joe Paduda on Tuesday, March 13th, 2012 | Comments

While it’s not a done deal, it’s all but done.
Two workers comp physical therapy network companies – Align Networks and Universal SmartComp – are close to merging.
Industry followers may recall Align was purchased last fall by General Atlantic, a Connecticut-based private equity firm; SmartComp has been owned by Riverside, a Cleveland-based PE firm, for about five years. Industry founder MedRisk (an HSA consulting client) is the largest and oldest company in the space.
The merger, when completed, will make the combined company the largest in the space in terms of revenue dollars. There may well be some of those “synergies” investors like so much as well; SmartComp and Align have a lot of overlap in their provider networks. This, along with the usual SG&A savings, will likely make for a richer bottom line for the merged entity compared to the two individual companies.
It is safe to assume that the customer face of the merged entity will have a distinctly Align flavor. SmartComp hired a sales chief last fall, a relationship that lasted a matter of weeks. Soon after the departure of the sales chief several other sales personnel also were gone. In contrast, Align’s remarkable growth was largely driven by the company’s strength in sales, especially on a local, adjuster-by-adjuster level.
The merger isn’t surprising. The five-year horizon on Riverside’s investment in SmartComp is here. General Atlantic (Align’s owner) paid a steep multiple for Align, and wants to dominate the space as quickly as possible. Align did have a recent win, landing the US Postal Service “contract” (the Postal Service can’t direct claimants to specific providers, and the union’s voiced its displeasure), but organic growth takes time, investment, and an ability to land national accounts. MedRisk enjoys a dominant position in the large payer sector, with long-term relationships at most of the larger payers.
What does this mean for you?
More evidence of private equity’s strong and continued interest in workers comp services.
Consolidation in this sector demonstrates this – and other services sectors – is a maturing industry.

Mar
9

Higher work comp costs for Florida employers are coming

Posted by Joe Paduda on Friday, March 9th, 2012 | Comments

The bill to stop outrageous markups on physician-dispensed drugs is all but dead, a victim of a highly effective, and very well-coordinated lobbying and public relations campaign financed by wealthy opponents who used employers’ own dollars to kill the bill.
Dispensing companies make tens of millions of profit charging employers twice to six times more for drugs than they would pay a retail pharmacist. A small portion of that money – only about $3.4 million – has been spent currying political favor, with several hundred thousand dollars finding its way into the coffers of the current Florida Senate President. Mike Haridopolos is using his powers to prevent the bill from coming to the floor, knowing if it does, it has the votes to pass.
This is a big defeat for employers, who will see higher workers comp costs, and tax payers, who are paying for inflated costs for drugs used by injured state workers.
One has to admire the effectiveness of the physician dispensing companies; confronted with an existential threat, they spent whatever they needed to, put together a very impressive dis-information campaign, convinced several probably well-intentioned physicians to take their side, and duped enough legislators to allow Haridopolos to ride off into the sunset retiring with hundreds of thousands of dollars in their contributions still at his disposal.
A colleague recently pointed out that Florida has tried to stop this outrageous profiteering on the backs of employers and taxpayers for three years running, and each year the result has been worse than the year before. Then-Governor Charlie Crist vetoed a cost cap unanimously passed by both houses three sessions ago, and this year we won’t even get a vote in the Senate.
For employers and insurers, it is crystal clear that bringing a knife to a gun fight produces an inevitable result.
In what looks to be the very definition of “too little, too late”, the Florida Chamber of Commerce is asking its members to email Haridopolos in what looks to be a rather pointless and somewhat pathetic effort to undo what is clearly a done deal.
For now, it’s over. Employers lost. Taxpayers lost. Good government lost.
The question is, will the Chamber, insurers, employers, tax payers, and decent politicians learn the lesson, or will we – all of us – fail again next year.

Mar
7

Impact of health reform on work comp

Posted by Joe Paduda on Wednesday, March 7th, 2012 | Comments

Over at Mark Wall’s Linked-In Group there’s a passionate discussion going on about the impact of health reform on workers comp.
I have my own views on the impact of reform on workers comp, namely the Affordable Care Act, aka PPACA, aka Obamacare, is generally good news for the comp industry. That may not sit well with the ideologically pure, but here’s why.
– Healthier claimants – those with insurance are healthier than those without
– no need for WC to pay for non-occ conditions once the claimant has coverage (whether the WC payer follows thru on this is a separate issue)
– more science and less art in the practice of medicine as comparative effectiveness research gains traction – good news indeed for comp payers saddled with back surgeries and H-Wave devices.
– of course, there’s bad news – mostly for comp networks who are going to become increasingly ineffective in their efforts to negotiate favorable deals with big provider groups, facilities, and systems.
But, as Mark and others point out, while we think we know what’s going to happen, we really can’t know…

Mar
6

Prosecuting drug-dealing docs

Posted by Joe Paduda on Tuesday, March 6th, 2012 | Comments

A California physician has been charged with murder in the deaths of three patients who died of fatal overdoses. Dr. Hsiu-Ying “Lisa” Tseng, arrested earlier this week in Los Angeles, has been linked to five more fatal overdoses.
Tseng’s arrest comes two weeks after Dr Paul Volkman, the southern Ohio pill mill prescriber, was sentenced to four life sentences by a Cincinnati court. Volkman was convicted of killing four patients; he was associated with eight other deaths but there wasn’t enough direct evidence for convictions in those cases.
The DEA has dramatically stepped up its efforts to identify and charge physicians and pharmacists engaged in illegal distribution of controlled substances. Pill Nation II, the DEA’s latest initiative, resulted in the arrest of eight Florida physicians and two pharmacists, two Colorado docs, last fall, and a long list of other docs engaged in similar behavior.
Patients drove from as far away as Tempe Arizona to see Dr Tseng in her LA County office. Tseng had been under investigation by state and Federal agencies for years. She had been forced to give up her medical license just one day before her arrest, an event that occurred far too late for the three young men, all in their twenties, who had died after taking drugs prescribed by Tseng.
Tseng, charged with 20 counts of prescribing drugs – including oxycodone and aprazolam – for patients with no legitimate need for the drugs, had been under investigation by the DEA since 2007; her office was raided in 2010.
The sister of one of Tseng’s alleged victims had reported Tseng to the local district attorney three years ago, after her brother’s death from an overdose – two years after the DEA investigation began. I’m not pointing fingers at the FDA, rather noting how difficult it can be for law enforcement to:
– learn of the possibility that a crime has been committed
– investigate and determine if a crime has been committed (obtaining necessary judicial authorization for warrants while protecting patient confidentiality if appropriate)
– obtain a commitment from the prosecuting authorities that they support further investigation
– develop and substantiate enough information to give authorities confidence they have a solid case
– coordinate efforts with other investigating entities, develop the charges, and proceed with the arrest.
That’s likely scant comfort for the mother of Joey Rovero, but she’s turned her grief into action, forming the National Coalition Against Prescription Drug Abuse.
What does this mean for you?
If you suspect a doc or pharmacist is prescribing or dispensing illegally, contact the DEA at 1-877-RxAbuse (1-877-792-2873) – it’s confidential.

Mar
5

Work comp – 2012 regulatory changes

Posted by Joe Paduda on Monday, March 5th, 2012 | Comments

Every year any number of states change their workers comp regulations, sometimes a lot, sometimes just a minor tweak. This year there’s some of both.
Illinois has to be on the top of anyone’s list – the changes passed last summer are going to be working their way thru the regulatory – and judicial – systems for some time to come (more on Illinois workers comp reforms here).
This year, the Workers’Compensation Research Institute and IAIABC have collaborated on the annual compendium of state workers comp regs. I asked IAIABC Executive Director Jennifer Wolf Horejsh about the major changes over 2011: she reported “a few states experienced significant reforms in 2011 (KS, IL, MT, MI) that impacted the laws as of 2012.”
Montana’s had high costs for some time, and there were some relatively minor changes in the Big Sky state. Costs appear to be the factor in changes this year; again, Wolf Horejsh
“I would surmise that the major driver of change was system cost of one kind or another. High premiums in Montana and Illinois had been a source of frustration for several years. Of course, medical cost containment is an area that is still discussed frequently among the workers’ compensation regulatory community. The issue of physician-dispensing…is on the radar in some states and I anticipate it will still be an area of continuing reform in the next few years.”
Several states did take action to limit costs on physician-dispensed drugs; Alabama, Georgia, and Mississippi are all among those addressing the problem via regulation. (note the report doesn’t include details on reimbursement)

Mar
3

What health research articles can you believe?

Posted by Joe Paduda on Saturday, March 3rd, 2012 | Comments

There’s a lot of mindless blather in the media about scientific studies on health that purport to say this or that about something or other – much of it confusing, contradictory, and/or outright wrong.
While a lot is just sloppy journalism, there’s quite a bit that can be attributed to bias; physicians and/or researchers on the payroll of a specific company or industry conduct and/or report on research that is favorable to their financial supporter. Roy Poses and Gary Schwitzer have been two of the most prominent voices focused on this issue, and both have done exemplary work not only identifying individual examples of biased “research” but in calling for a higher standard of reporting by all members of the media.
Roy’s work exposing the influence of big money on academic medicine is exemplary.
That’s not to say that some of these advocates aren’t honorable and well-intentioned folks, and some of the research reports and/or advocacy positions are well-developed, legitimate and quite useful.
The tough work is identifying which ones are reliable and which may be less so. One resource is Gary’s list of experts with no links to purveyors of medical devices, medications, and/or treatment. Journalists seeking an unbiased, critical opinion can likely find someone on his list who can provide the straight scoop on the latest claim about peach pits, botox, or mercury toxicity.
A better bet may be to understand what makes for good research, and what’s not – and why, and how reporters can (unintentionally, one hopes) mischaracterize health research in such a way as to mislead the reader.
Here’s one example; a NYT article on treating baldness reported on “treating” mail hair loss by transplanting hair from the patients’ legs to their head. Schwitzer critiqued the piece as “observational with a sample of two patients, it misses nearly all of our measures and allows the author of the study to provide readers with a 777 word advertisement.” [emphasis added]
Ouch.
To answer my headline question, I’d say “yes, but check to see who the”experts” cited by the articles are and where they make their money.”

Mar
1

Streaming Health Wonk Review

Posted by Joe Paduda on Thursday, March 1st, 2012 | Comments

Trying something new in this fortnight’s edition of Health Wonk Review – instead of grouping contributions by topic, we’ll take them as they come – just like we encounter them on the web – and at the end, I’ll try to summarize and find common themes and make sense out of the chaos.
note the use of the word “try”…
Our revered colleague Hank Stern is pushing hard for full insurance coverage of men’s facial grooming products. Hank, you kill me!
David Williams takes issue with Mitt Romney’s call to increase the Medicare eligibility age, asking why we can’t start raising it now, and faster than Romney suggests. Good policy isn’t good politics, and to me this looks more like another Romney effort to address a perceived problem without angering a voting block… (I do agree with David’s note that a better faster way to reduce the long term deficit would be repeal of Medicare Part D…)
From new mandates we jump to the latest from Health IT, with dedicated reporter Neil Versel bringing us the news from the HIMSS 2012 conference. Neil walked the aisles, listed to talks, and chatted up insiders, all so we don’t have to suffer the sore feet and info overload. Think “meaningful use” and ICD-10…
Just in time, our colleagues at Health Affairs contributed their observations on the proposed rules for Meaningful Use of EHR , diving deeper into the issue with another post from an EHR stakeholder, noting the list of quality measures is likely to be significantly trimmed in the final rule.
Louise Norris – a retail health insurance broker in Colorado – combines a deep understanding of the implications of health policy on a national scale with her hands-on, daily working knowledge of how health insurance markets actually work, and that rare combination makes her observation “if all continues as currently planned but with the individual mandate eliminated, I would expect premiums – in the long run – to be significantly higher than they would be with the individual mandate in place…” one we would be well-advised to carefully consider…
Changing gears, At Workers’ Comp Insider, Julie Ferguson has been following the ingoing criminal probe and charges related to the 2010 Upper Big Branch Mine disaster. Many insiders believe that criminal charges will climb higher up the criminal ladder. How high? Stay tuned. (Ed. note – the Big Branch mine safety boss just got a three year prison term…)
HWR veteran Jason Shafrin PhD provides a critical review of a paper exploring factors affecting patients’ access to care. The always-insightful Shafrin’s summary is tight.
A different take on access comes from Anthony Wright who reports county-based Low-Income Health Programs (LIHPs) in California have already increased access to coverage for a quarter-million folks under the poverty level thanks to an early expansion of the Affordable Care Act.
Transparency in health care decisions is great – as long as consumers understand what the “price” buys, and the relative value and effectiveness and issues of different treatment options. That’s the point Joe Colucci makes while noting we’re a loooooong way from having access to enough usable information.
Another view comes from Greg Scandlen, who wants Medicare to incorporate spending accounts so individuals can set aside funds to cover their deductibles and copays. As a side note, Scandlen claims that his recent 19% premium increase is due to “ObamaCare”, a meme that has been debunked here and here – see page 19. In fact, PPACA’s impact on health insurance premiums accounts for about 1.5% of trend on average, and at most less than 5% when direct and indirect impacts are counted. In return, there’s coverage for dependents to 26 (adds <0.2%), elimination of lifetime dollar limits, coverage of pre-existing conditions, and free preventive care. There's rarely a point in time where it is suddenly and clearly obvious that no more medical care should be provided to a deathly ill patient, rather, it is a long and gradual decline, and suddenly we find ourselves with a very old, very infirm person with multiple problems all seemingly insoluble requiring Herculean efforts incurring massive cost. That’s Brad Flansbaum’s conclusion in his post on the timing of death.
Gary Schwitzer’s Health News Watchdog is fast becoming the go-to site for intelligent analysis of the mass media’s handling of health topics. Gary takes on the media’s handling of new research on colon cancer screening, noting “One study [in the New England Journal of Medicine focused] on colonoscopy, one on a form of blood stool testing, plus an editorial that addressed both. Some benefits for each approach were found in each study. Some stories only reported on the colonoscopy study, ignoring the blood stool test study. Others ignored the editorial – which provided easy access to an independent perspective.” Gary’s point? The blood stool study shows significant promise, and not discussing it in context diminishes the reader’s ability to understand that.
Perhaps the most diligent watchdog in the industry is Roy Poses, MD. Roy’s tireless efforts to uncover self-dealing and unethical behavior in the health care industry is notable not only for its thoroughness but, sadly, for the wealth of material. Roy takes on lazy reporters’ patent inability to see through conflicts of interest in health care research, and the logical fallacies that make a mockery of their “reporting.”
A new contributor is Wing of Zock (no, that’s not a typo), and from Michael Weitekamp MD comes a solid post leading with HL Mencken’s oft-used quote “For every complex problem, there is a solution that is simple, neat, and wrong.” Dr Weitekamp notes “The free market cannot fix this. We spent $2.6 trillion on health care in 2010 and the vested interest in the status quo is formidable.” Weitekamp goes on to note a government mandate won’t address duplication of low value services either. A very good overview; here’s hoping he continues with a series on solutions.
Good to hear from Maggie Mahar, who sends us her piece on obesity – I learned that it’s not the weight that kills, it’s the lack of activity. Obesity – in and of itself – isn’t near as damaging as inert behavior.
At Corporate Wellness Insights, Fiona Gathright has a different lament – many health care providers aren’t exactly pictures of health themselves, noting ” health care workers (nurses, aides, hospital administrators, etc) have some of the highest rates of obesity, hypertension, and diabetes in the country!”
Jared Rhoads discusses an effort to better understand public survey non-respondents views on health care reform, and laments the inadequacy of the “don’t know” answer.
A big component of some health plans’ efforts to improve patient care is the “medical home”. Jaan Sidorov MD isn’t sure medical homes are “all that”, and some research supporting medical homes is rather limited in scope.
A different perspective comes from Kerry Willis MD, who has a practitioner’s view of the issues with the health care system.
Finally, Avik Roy takes big pharma to task for working to delay approval of drugs, thereby forcing biotech firms to partner with big pharma companies if they’re going to survive long enough to get their molecules to market.
So, what does this all mean?
Technology adoption isn’t a panacea, and mixed and changed messages from CMS are causing mega-heartburn in the tech and health systems sectors. Most payers are pushing hard to prepare for reform, understanding that the world is changing with or without an individual mandate.
Big money has big influence and as long as it does, we’re likely not going to see significant reform – there’s just too many billions at stake.
And big media doesn’t help, with their superficial and under-researched take on news, studies, and assessments thereof.