Happy spring…or what passes for it here in upstate New York, which is one day of temps in the high fifties followed by…snow.

Caught a few folks with my annual April Fools post; here’s a list of 10 that are waaaay better than anything I’ve ever done (Arnold’s dip is great) (altho I gotta say the post about Coventry acquiring United Healthcare was a beauty)

(I’m starting a new thing with today’s catch up; there will be a very brief “this may mean” after each snippet to give my take on potential implications)

Back to the real world…where I’m going to get all macro on you for a few minutes.

First up, an excellent piece on how the “news” distorts our world view.  For example, when Anna Nicole Smith died a few years ago, that story alone eclipsed coverage of every other country in the world – except Iraq, which happened to be at war.  In fact, Ms Smith’s untimely demise received10 times the coverage of the Intergovernmental Panel on Climate Change’s seminal report.

No wonder Americans don’t understand anything about anything not on the cover of People or watched on TMZ…

This may mean – it’s helpful to read non-US news sources; BBC and the Economist are two places to start.

Gary Schwitzer has an excellent primer on statistical significance for journalists, an area of study that seems to have escaped many of our leading writers. A key quote:

hard-and-fast rules on statistical significance are somewhat problematic. [emphasis added]

The somewhat arbitrary choice to set the p-value for statistical significance at less than 5% was made nearly 100 years ago.  There’s nothing magical about it. It’s just become a time-honored norm…

In focusing on statistical significance, let’s not forget to question whether even results with a p-value < 0.05 are clinically significant.  In other words, did they make a meaningful difference in people’s lives?

What’s happening in health care?

Hospitals in states that haven’t expanded Medicaid are struggling – big time.  Kansas is particularly hard hit.  What’s behind this is the PPACA reduced Medicare and other funding for hospitals, anticipating it would be replaced by increased Medicaid and private health insurance coverage, and a concomitant reduction in indigent care. When Kansas – and many other states – rejected Medicaid, the hospitals were left hanging. In Kansas alone, the drop in hospital revenue is almost a half-billion dollars.

The latest data suggests 283 mostly-rural hospitals are in financial trouble; since 2010, 48 have closed. This cannot be attributed solely to a failure to expand Medicaid, but it certainly plays a major role.

This may mean – potential cost shifting to private insureds and workers comp in non-Medicaid expansions states.

Wages are starting to creep up as labor markets begin to tighten and employers find they can’t find the skills they need unless they pay more.  There’s also more job movement, as folks leave their current employer for higher pay down the street.  This from The Economist:

In labour-intensive industries the American way of low pay, low staff retention and low motivation may be a false economy. Perhaps a third of Walmart’s staff are reckoned to quit in any given year, which could be one reason why it often scores poorly for customer service. In 2014 it said inept shelf-stocking cost it $3 billion a year—more than its planned pay rise. As the economy improves, many retailers are busy hiring new staff only to see others walk out of the door…

This may mean – higher indemnity payments, but potentially shorter disability duration as jobs are more plentiful.

Deals

Finally, in what has to be one of the bigger deals of this young year, United Healthcare is acquiring PBM Catamaran, which is just about to close their acquisition of work comp PBM/network/medical management firm Healthcare Solutions (an HSA consulting client). This will create a third major PBM to compete with Express Scripts and CVS/Caremark; the new OptumRx (UHC’s PBM)/Catamaran combo will rival CVS/Caremark in size with about a billion scripts annually; ESI remains the market leader.

This may mean – added strength for the work comp PBM business due to more buying power and clinical resources.

Earlier this week I ran into a couple of enterprising reporters responsible for a recent stream of articles about workers’ compensation; actually I sat next to them in an Atlanta airport bar.  Evidently they’d been stuck there for some time as they were pretty… chatty…

PhoPublica’s reporters were having a grand old time, reading passages of their work out loud to each other, toasting their skill at turning a phrase, saluting their editors’ genius in assigning them to this story, and planning where they’d display the Pulitzer Prizes certain to come. While there were a couple concerns voiced by industry pundits about a lack of balance or perspective, this didn’t dampen their spirits for long, as one reminded the other they needn’t bother with facts or perspectives contrary to their central theme: Workers are getting screwed by Insurers and Employers.  In fact, they had a term for those contradictory views – “whatevers”, as in, this is about as important to us as parental views on fashion are to teenagers.

They were thumbing through a stack of emails, reports, documents, and studies sent in by work comp researchers; a couple elicited hoots of derision but a few caused some consternation. One in particular from a highly-regarded California research organization had them flummoxed. Evidently their latest article completely misquoted the research organization’s findings; the real data totally refuted PP’s assertion that lots of treatment requests are rejected.

After ordering another round of White Zinfandel, the reporters went back and forth for some time on the right response. I couldn’t make out some of what they were saying, but there appeared to be a debate about the right “strategy” – ignore the real data entirely, bury a correction in a footnote, pretend they never got the message, or send an automated email response along the lines of “We are on vacation in the jungles of Myanmar and will respond when we return.”

This was a tough one, requiring additional sustenance.  Appetizers were ordered (escargot and nachos with brie cheese) and the chatter went on for some time.

In the end, a lightbulb went off; one had the brilliant idea to “correct” the data point but do so AND preserve their central theme – Work comp reform screws employees.

Pen was put to cocktail napkin and after much effort, the intrepid journalists came up with wording implying the treatment requests were only approved because the employers and insurers had bought-and-paid-for the entire review process and all the reviewers.

Genius indeed!

Journalistic integrity preserved, but not at the cost of a) admitting a mistake was made, or b) diminishing their case that Workers are getting screwed by the all-powerful Insurers and Employers.

Their timing was impeccable as well; just as their flight was called, they drained the last few drops of White Zin, scarfed down the few remaining brie-on-toasts, and emailed the revisions to their waiting editor.

Me, I sat stunned, rendered speechless (a rare accomplishment indeed) by the ability of these professionals to get the facts to say what they want them to say, regardless of what the facts actually are.

 

What does this mean for you?

I thought Fox News was skilled at distortion…they could learn some lessons from PhoPublica!

and btw, check your calendar…

Another deal goes down, more clarity around IMRs, more data on the impact of the Affordable Care Act – it’s been busy.

First up, Select Medical’s purchase of Concentra.

In what looks to have been a pre-emptive move, Select Medical announced its intent to purchase occ med clinic firm Concentra from parent Humana. (btw great reporting by BI’s Stephanie Goldberg; she has more detail than any other source.)  Concentra, which has about 300 stand-alone clinics and 240+ on-site clinics, claims it handles 14% of all occupational injuries (they refer the more complex ones to non-Concentra providers).

The acquisition makes strategic sense for Select as it adds primary care to its current portfolio of physical therapy, rehab, and long-term care operations.  It also expands Select’s geographic reach considerably, albeit in a different line of business.

We will track the integration of Concentra and Select going forward; expect to see more efforts on the part of Select to work directly with payers, and a stronger negotiating stance with networks now that they have more market clout.

ACA implementation

A big concern and one certainly noted by opponents of ACA was the purported cancellation of large number of employer-sponsored health insurance plans that failed to meet ACA coverage standards.  New data indicates less than 1% of employers surveyed reported cancellations due to coverage standards.

In contrast, somewhat less than 5% of individual policies were canceled due to coverage requirements.

A Robert Wood Johnson Foundation report (thanks to AthenaHealth) report indicates docs are not getting swamped with newly-insured patients seeking primary care.  Key findings include:

• New patient visits to primary care providers increased from 22.6% of all appointments in 2013 to 22.9% in 2014.

• The percentage of visits with patients with complex medical needs decreased from 8.0% of appointments in 2013 to 7.5% in 2014.

So far, doesn’t look like primary care providers are overwhelmed – HOWEVER that is national data, and things certainly vary from region-to-region.

While primary care isn’t being overloaded, the health care delivery system is undergoing wrenching changes – with small, safety-net hospitals probably the most affected. Expect to see closings, consolidation, and takeovers as these most-vulnerable providers lacking scale, resources, and brand find they can’t survive.  For a glimpse into the near-term future, track what’s happening in California.

Work comp

The California State Fund is growing, as the market hardens and rates increase in the Golden State.  California is a bit of an anomaly as the market appears to be softening somewhat in the other 49, but a 52% increase in earned premium indicates the State Fund’s moves to rationalize pricing via tiers along with other insurers pulling back from California is driving more business to the Fund.

Drugs

Finally, great piece from AIS’ Lauren Flynn Kelly on pharmacy’s biggest cost drivers – spoiler alert – the top two are Hep C drugs and compounds…

Enjoy your weekend!

David Deitz, MD PhD was last up at CWCI, his task to bring it all together by asking an apparently simple and straightforward question:

What can California learn from Washington?

Or put another way, “Can California’s workers comp system be fixed?”

Possibly.

First off, there still isn’t much of a focus on quality of care in California.  Outcomes in workers comp are still worse than in group health – despite more care for many of the same conditions.  Many state systems still rely on judicial, administrative, or otherwise “non-medical” authorities to make decisions about what are essentially medical issues; fortunately California does not. Cue the IMR complaints…

That’s good news; however just by virtue of being a work comp patient, things aren’t so good. A 2005 JAMA-published analysis indicated 83% of studies (175 out of 211) found that just being a WC claimant was associated with worse outcome after surgery.

There’s a lot of research and analytics and reporting in the non-workers ‘comp medical world related to outcomes, costs, and cost effectiveness, with “a lot” especially true when compared to the paucity of such research in workers’ comp outside of L&I, CWCI, and a couple other sources.

Dr Deitz referred to a “massive number of care improvement initiatives that are going on throughout the health care system” (paraphrasing), a trend that will continue with or without, ACA. Again, this may help work comp as better care = better care for work comp too + a healthier population.

David also noted the questions we are encountering in workers comp are nowhere to be heard in the real world; there are no questions about evidence-based medicine in group health.  EBM is embedded in the very fabric of health care contracting, delivery, measurement. It is accepted fact, a core operating principle, fundamental. And the work comp systems would benefit immensely from a healthy dose of EBM.

One supporting data point is what’s happened in Texas, where they named a Medical Director and adopted guidelines, strong UR, formularies, EDI, and measurement of results.  While Texas isn’t perfect, it’s gotten a lot better.

Unfortunately along with Washington, Texas is one of only two states that has made significant progress in adopting changes that have significantly improved medical care delivered to injured workers.  However, it’s not for lack of opportunity.  Dr W Brose’s HELP Pain Medical Network is just one source of high-quality, workers’ comp-specific and relevant data on treatment outcomes.

The money quote – “workers’ comp is the most costly and inefficient way to deliver medical care that humankind has ever invented.”

And care improvement is possible in WC but requires systematic reform.

We have a system that is inefficient, very expensive, and delivers poor quality care.  That has to change.

Dr Deitz’ final point – improvements in workers’ comp medical care MUST happen.