Insight, analysis & opinion from Joe Paduda
David Williams’ edition of Health Wonk Review is focused on real world issues, problems, and challenges.
From ACA enrollment challenges to fixes therefore, to face replacement surgery, it’s all here in HWR.
Headed out on a much-needed vacation; MCM will be on hiatus till the middle of next week.
Here’s a few items of note that came across the virtual wire over the last few days.
Mylan’s EpiPen Disaster.
In the story-that-will-not-die, EpiPen manufacturer Mylan continues to dig its hole deeper and deeper. The latest news – the actual cost to make and fill an EpiPen is less than 10% of the product’s actual price. And may be as low as four bucks – for a $300 injector.
Of course, when you need an EpiPen, you really, really need one – and could not care less what it costs. (it is used to reverse the most dangerous symptom of anaphylactic shock – asphyxiation)
But there are so many hands out in the EpiPen distribution chain, all making a margin as the product works its way down to the end user. Most striking is the rebate Mylan likely pays to the insurer – one estimated by the estimable Adam Fein at around 40% of the product’s list price.
Now Mylan CEO Heather Bresch is providing all of us a lesson in how NOT to respond when confronted by reporters asking about price increases and huge compensation packages. Bresch said, and I quote: “No one’s more frustrated than me.”
That takes some balls – and a whole lot of cluelessness.
The parents who can’t afford to replace their kids’ EpiPens every year when they expire and have high-deductible plans so they pay the $600 out of pocket might be a touch more “frustrated” than Ms. $19-million-a-year Bresch.
Beyond that, there’s a nastier, uglier, and way bigger problem here. Health care in this country is a for-profit business, and Mylan is operating in the best interests of its stockholders.
And no, the “free market” won’t solve this issue – markets don’t care about people.
Provider consolidation continues
CMS’ changes in reimbursement are driving adoption of IT systems designed to track and report patient encounters with a focus on quality metrics. These systems are expensive, difficult to implement, and require ongoing updating and maintenance.
More consolidation does not mean more efficiency or cost-effectiveness…in fact some data indicates costs go up.
Implication – more sophistication in billing, electronic medical records (EMR), coding and contracting means payers will find smarter and more knowledgeable negotiators across the table, and more sophisticated billing.
Work comp rates keep coming down
California, North Carolina, Kentucky, Tennessee all are joining the states that have announced decreased work comp rates. I know Florida’s getting all Sunshine-y for plaintiff attorneys, and payers are in a justifiable uproar about that, but that’s an anomaly.
Implications – good news for employers and taxpayers, bad news for opt-out.
Which remains a “solution” (and a pretty poor one at that” to a problem that doesn’t exist.
Okay, gotta run. see you next week!
Two people very close to me are on the front lines of the opioid disaster. Working in ERs and ambulances in the northeast, they see – multiple times every day – how bad it is.
You have no idea.
The toll this is taking is wide, deep, and devastating. Some public safety workers are burning out, beyond frustration and anger to a place of fatalism.
Yesterday an unconscious woman was admitted after her kids told their dad she was taking a nap on the kitchen floor. The nap was induced by a very heavy dose of benzos on top of heroin; when dad came home from work – he’s a public safety worker too – she was unresponsive.
Revived with a hefty dose of Narcan, the woman “justified” her dosage as needed due to some unspecified mental trauma.
This one example is playing out multiple times every day for every ambulance crew, in every ER, in every neighborhood. NPR’s morning news greeted me with a piece about elephant-tranquilizer Carfentanil, a made-in-China chemical that is exponentially more powerful than fentanyl, which is exponentially more powerful than heroin. Now spreading rapidly thru Ohio, Florida, and the midwest, carfentanil will soon find its way into your town.
If you think I’m being alarmist, you’re wrong.
Here’s how this is impacting us today.
This started with legitimate “prescription” drugs pushed by pharma companies making billions. Make no mistake, these bastards are the ones who started the ball rolling, a ball that has gotten ever-larger and is crushing more and more of us as it picks up momentum.
The great late David DePaolo penned a piece on Purdue just days before he died. It’s well worth reading, and remembering.
But the disaster unleashed by Purdue and their ilk is way beyond what any of us thought it would become. As powerful and necessary as the Surgeon General’s letter to physicians is, it is so, so late.
Will this epidemic be solved by public health measures far greater than anything we’ve thought of or funded to date, or, like smallpox among Native Americans or the Plague in Europe, is it fated to burn out only after it kills most users, leaving no one else to infect?
Have a great weekend.
WCRI’s report on variations in hospital outpatient costs is yet more evidence of the wide and seemingly nonsensical variations in work comp regulations, fees, payments, and practices among and between states.
Among the findings:
There’s a wealth of information in the report; here’s my takeaways.
Captain Obvious Alert.
In many states, workers’ comp is a huge profit generator for hospitals and health care systems. Anyone following the drama in Florida surrounding “negotiations” around facility reimbursement in past years saw this play out in vivid color.
Hospitals are almost always much more politically influential than workers’ comp stakeholders, giving them a decided advantage in influencing legislation, and sometimes regulation as well.
As Medicaid and Medicare continue to clamp down on costs, hospitals and health care systems will get even better at maximizing revenue from workers’ comp. Moreover, network discounts provided to workers’ comp payers are fading as payers realize the opportunity inherent in comp, and work comp PPO contractors confront the “yeah but you’re only 1 percent of my revenue” argument.
There is an entire industry devoted to revenue maximization; claims adjusters and bill review folks would be well-served to brush up on the techniques used by these folks. Here’s just a couple examples from quick research…
Considering the dollars paid to facilities and hospitals account for at least a third of work comp medical spend in most states, this is a big problem.
So, what to do?
Kudos to WCRI’s Olesya Fomenko and Rui Yang for their work – they’ve taken a shipload of data and turned it into information that’s understandable – and actionable.