Month: June 2016

Jun
8

Clinton health plan 2.0, updated

Posted by Joe Paduda on Wednesday, June 8th, 2016 | Comments

Now that Hillary Clinton is the Democratic Presidential nominee, it’s time to delve into her health policy platform.  The quick recap is she is looking to expand and build on ACA, tweaking various parts and pieces to fix legislative errors, incent states to participate, and reduce out of pocket costs. (we discussed this in yesterday’s Blab; you can watch it here.)

Expand Medicaid

Clinton would offer 100% funding for any state that expands Medicaid for at least three years, then tapering down to 90%.  This would likely encourage more states to take the step; Florida and Nebraska are two where elected officials are under increasing pressure to make the move.

Remove the family glitch

A drafting error doesn’t allow taking an employee’s family into account when determining subsidies for insurance bought via the Exchanges.  Clinton would offer tax credits to offset those out of pocket costs for eligible families.  The tax credit proposal is a convoluted way to fix what should be done via correcting the original language.

Allow near-seniors to buy-in to Medicare

More an idea than an actual policy position, Clinton is talking about allowing “people 55 or 50 and up” to voluntarily pay the entire “premium” to join Medicare.  With much to be fleshed out, this looks to be a response to Sen Sanders’ call for free public insurance for all.

This could have some major downstream effects; by removing we older and more expensive people from the privately-insured pool, insurance costs for younger folks would decrease.  This “public” option would also inject competition into areas where there isn’t any due; rural markets in particular could benefit.

Address drug prices

Clinton has several ideas including eliminating the tax deductibility of marketing expenses, setting limits on consumers’ out of pocket costs for prescription drugs, and allowing Medicare to negotiate directly with drug companies.

Most striking is the mostly-unformed concept of forcing drug developers to spend a set amount on R&D, with any additional revenues handed back to the Feds for government research on new therapies. This is intended to address the industry’s argument that research costs demand high prices (an oft-criticized and rather doubtful argument).

Sounds good, but I doubt – very much – if it could be implemented without causing a lot of problems as drug companies quickly figure out ways to game the system.

At some point it may make sense to review Trump’s, but at this point the GOP nominee  has yet to come forth with any coherent health reform plan other than “repeal Obamacare” and sell insurance across state lines.

Jun
6

Monday catch-up

Posted by Joe Paduda on Monday, June 6th, 2016 | Comments

Summer’s arrived in upstate New York – and boy do we appreciate it. While I was watching all the trees turn green, I missed reporting on a bunch of stuff last week.

So better late than never, here it is.

P&C industry outlook

Let’s start with the macro stuff.  A couple weeks back, Fitch published a piece wherein they opined the P&C industry is in for a tough time this year. After several years of stellar performance, Fitch expects prices to decrease as competitors battle for market share. Here’s how they put it:

Renewal rates are flat or declining for most commercial market segments following a hardened market from 2011-2014. The price competition comes from underwriting success and market capacity expansion from earnings accumulation. As price competition intensifies however, this will likely be a drag on premium growth, according to Fitch. Commercial lines written premium volume grew by only 1.8 percent in 2015.

For work comp, Fitch identified prescription drug costs and continued low interest rates as problematic; the first increases costs while the second reduces investment income.

Opioids

The number of opioid scripts in the US actually declined last year. And that was the third year in a row. That’s the best news we’ve heard in quite a while. Since 2012 – the peak year for opioid script volume – the number of scripts has dropped by 12% – 18% (depending on the data source).  

In case you’re interested, prescription opioids accounted for about $10 billion in total spend in 2015. Workers comp accounted for around 14% of that, a rather striking figure when you consider total work comp medical spend accounts for 1.4% of overall US medical spend.

Yup, work comp uses about ten times more opioids than other payers.

And how the bad news; the drop in scripts hasn’t been accompanied by a decrease in the death count, which stands at 28,000 for 2014.

California Workers’ Comp

Well, at least it hasn’t gotten any worse.  That’s my take on the just-released CWCI study on the UR/IMR process for Q1 2016.

  • IMR volume is about the same as last year at 160,000 determination letters per year;
  • the overall IMR uphold rate is the same as last year at 89%;
  • Rx drug requests still account for nearly half of all disputed medical service requests submitted for IMR (and 40% of the Rx drug IMRs are requests for opioids or compound meds);
  • and a small number of docs still account for the majority of the disputed  service request that undergo IMR (the top 10% of medical providers accounted for more than ¾ of the IMR service requests).  

My take – the IMR process is preventing people who don’t need opioids from getting scripts for opioids.  That’s a very, very good thing.  Yet the same docs keep prescribing this crap to patients knowing full well these requests will be rejected.

I’m very much looking forward to hearing all those “injured worker advocates” heaping praise upon the system for protecting their clients’ health and wellbeing, and that of their kids as well.

I’ll personally nominate each of them for a Comp Laude Award.

Jun
3

What’s with the gloom and doom?

Posted by Joe Paduda on Friday, June 3rd, 2016 | Comments

“The economy seems to pulse — surges a little bit, pauses, surges a little bit, pauses,” said Kevin Logan, chief U.S. economist at HSBC. “And in the end it’s nothing.”

That’s the money quote from a very readable piece in today’s Washington Post, one that seems at odds with the doom and gloom emanating from some politicians and pundits.

Before my inbox overflows with tales of woe, I fully understand there are places where the recovery is halting at best.  And there are still too many who have decided to exit the workforce – although the number isn’t nearly as high as many think.

And, the percentage of the population that is without health insurance continues to decline – down to 11.0% in Q1, 2016. Deductibles are increasing for many – as they have for the last two decades – but it’s still far better to be insured than not.

Wage growth has increased, the unemployment rate is half what it was at the peak of the recession (and likely headed lower), manufacturing is growing, consumer spending is high, and most stock market indices remain relatively high.  Consumer confidence is in a six-month slump, but one wonders if that’s partially driven by the incessant drumbeat of negativity from Trump et al.

All that said, it’s abundantly clear the employment world is going to change dramatically over the next decade, and it is possible if not likely some of the unease is due to fears that automation and offshoring will continue to eliminate stable, good-paying jobs.

I bring this to your attention, dear reader, to add a bit of perspective and data to the discussion.

Enjoy the first weekend in June

 

 

Jun
2

Opioids and Workers’ Comp – a quick update

Posted by Joe Paduda on Thursday, June 2nd, 2016 | Comments

The rest of the world is beginning to catch up to the progress workers’ comp has made fighting the opioid scourge.  Kudos to PBMs, payers, regulators, researchers and some physicians for recognizing the incredibly negative effects of opioids years ago, and taking action to mitigate some of these effects.

That is NOT to say we’re anywhere close to getting this solved – far from it.

But we have seen some evidence of decreases in the number of new claims getting opioids in some areas and an overall decline in opioid scripts and morphine equivalents (MEDs).  We’ll have more information in a couple of months when CompPharma (a consortium of work comp pharmacy benefit managers) releases its 13th Annual Survey of Prescription Drug Management in Workers’ Compensation. (note I’m president of the organization and am conducting the research, past reports are available free for download here.)

A few factoids to give some perspective:

From CWCI’s most recent research:

  • Opioids declined to 27.2% of all scripts dispensed to California work comp patients in 2014, down from a peak of 31.8% in 2008.
  • Average number of morphine equivalents per script declined from 550 in accident year (AY) 2007 to 422 in 2012.
  • The % of work comp patients receiving opioids within 24 months of injury increased from 22.4% in 2005 to 27.9% in AY 2012
  • Express Scripts reported overall spend for opioids declined 4.9% in 2015, the fifth consecutive decrease.
  • Helios reported:
    • the percentage of work comp patients getting opioids declined by 1.6% from 2013 to 2014.
    • opioid utilization dropped 2.9% over the same period

What we have NOT seen is any significant progress dealing with the knottiest and most important problem – long term opioid users.

I can’t count the number of erstwhile start-ups, business ventures, and eager entrepreneurs I’ve spoken with who contend they’ve figured it out.

By definition, anyone who claims to have a universal solution most certainly doesn’t understand the problem.  Unlike reducing initial and secondary scripts, addressing patients who’ve been taking opioids for months is very much an

  • individual,
  • patient-by-patient approach
  • requiring flexibility,
  • a deep understanding of the disease state and chronic pain and addiction,
  • a willingness to experiment and fail, and
  • a very long term commitment to a business model that almost certainly will not be hugely profitable.

That’s not to say there isn’t opportunity – there most certainly is.

What does this mean for you?

We’re at the end of the beginning of the work to address opioids.  This will take focus, years, diligence, and unrelenting focus.