Jul
14

Up? Down? Sideways? What’s up with health care costs?

There’s been a good deal of confusion over health care cost trends for the first half of this year.  Initial reports indicated they were up dramatically; more recent intel paints a very different story.

So what’s the deal?

First, let’s not confuse “costs” with “insurance premiums”.  Unfortunately, many mass media outlets don’t understand that insurance premiums are not costs…which certainly contributes to the confusion. Overall, premium increases for large employers have been trending generally downward for years, with 2014’s 4.4% rise just a touch over 2013’s record-low 4.1% increase. A big part of that is from increased deductibles and employee cost-sharing; today employees pay over a third of the cost of their insurance, a big change from way back in the day when many employers covered the entire cost (yep, I’m old).

Second, let’s not confuse “price” with “cost”, as this report does.

Recall cost is the price per service times the volume of services – so the price matters, as does the utilization of health care.

Fortunately, some sources – the PWC annual report being one of the better ones, don’t conflate or confuse.  Their latest estimate is health care costs will go up 6.5% this year, while premiums will only rise 4.5%.

That makes sense – more coverage means more utilization especially among folks who just got insurance.  Early indications are the recently uninsured are less healthy than the general population, a finding that should surprise no one.  Many may have long-term but relatively low-severity chronic conditions, while some undoubtedly could not get or afford coverage.  These newly-insureds will seek care for their long-term conditions, and that care will be pretty expensive. Think of this as a one-time big bump in cost due to pent-up demand; I would not be surprised to see spikes in cost for surgery, orthopedics, cardiology, pulmonology, rheumatology, and other areas with high chronicity over the next couple of years, followed by a reduced inflation rate.

What does this mean for you?

Don’t get too wrapped up in any forecasts or reports of recent cost trends; wait a year before putting much stock in inflation rates and you’ll find you have a lot less back=tracking to do. 

 

 

 


Jul
11

Is PPACA – the Affordable Care Act – working?

That depends on how you define success.

Are more people covered?  Is health insurance more affordable? Are patients “protected”?

In general, the data says yes.

From Jonathan Cohn, a summary of PPACA’s impact on coverage:

the proportion of working-aged adults without insurance dropped from 20 percent in the late summer of 2013 to 15 percent in the late spring of 2014...there are still a lot of Americans walking around without health insurance today. But there are about 9.5 million fewer of them than there were last fall… [emphasis added]

re Affordability, among those who enrolled in a PPACA-compliant plan, about half saw premiums increase – with the other half seeing a reduction.  Notably, the self-reported health status of enrollees was generally lower than the overall population.  This isn’t surprising; many likely couldn’t get coverage due to pre-existing conditions before PPACA.

Of course, many got subsidized insurance, which significantly reduced their premium cost.  Some may say this is a problem; I’d suggest that one can’t fairly evaluate PPACA on individuals’ ability to afford health insurance without accepting the need for and role of subsidies.  Which, btw, are paid for by various fees and taxes on health plans, devices, tanning beds, and rich benefit plans and reductions in reimbursement for Medicare.

The patient protection piece is harder to assess; the elimination of medical underwriting, requirement that plans cover kids to age 26, mandated enrollment, subsidies for small employers, and enforcement of actions against health plans who try to finagle their way to excluding certain groups (AIDS patients, for one), are all helpful.  However, given that health insurers have always made their money by not insuring those who might have claims, this will be a long, difficult, and up-and-down struggle.

Old ways don’t change without a lot of continued, intense, focused pressure.

What does this mean for you?

PPACA is here to stay. It is pretty far from perfect, but it’s better than the alternative.


Jul
7

Compound medications – a killer scam

Compound drug use is exploding – so much so that Texas has changed their employee benefits program to limit reimbursement to $300.  They didn’t have much choice, as the Texas Employees’ Retirement System’s compound drug costs have gone up 4,600% over five years.

That was not a typo.

They’re now requiring prior auth and ONLY covering FDA approved drugs.

The only thing that may potentially slow down the growth is bad news – and that was delivered in spades last week with the news that a coroner’s report found the infant died after ingesting a topical pain cream.  After sustaining injuries at work, the baby’s mother, Priscilla Lujan, applied some of the cream to her knee and back, made a baby bottle, and some of the substance got on the nipple.  The story was broken by Karen Foshay of KPCC; Foshay reported the cream contained the

“antidepressant amitriptyline, the pain reliever tramadol and the cough suppressant dextromethorphan…

Workers’ compensation records show Jarminski’s office billed $1,700 for the initial 25-day supply of the cream. That is much more than the prices of various mass-produced medications, asserted McCann.

Jarminski [the mother’s physician] was informed the cream was linked to Lujan’s son’s death but, according to McCann, that didn’t stop the doctor from sending more creams.

“Priscilla had expressed she didn’t want to see that cream anymore or use it anymore,” McCann said. “Despite that they continued to send her more creams by mail and bill workers’ comp for it.”

McCann said at least two to four more tubes of cream were sent to Lujan after her son’s death. It’s unclear how much Jarminski billed in workers’ compensation claims for those additional tubes.

As horrible as this is, this baby’s death may protect others from this deadly scam. The press is all over this, medical malpractice insurers are undoubtedly quite concerned, and law enforcement is getting more engaged.

While one would hope the mother’s doctor prescribed this medication solely for health reasons, the prescribing physician was one of those indicted in the California compound drug case.

Of course, the compounders have hired a PR firm to try to convince us with BS that which they can’t validate with science – and even started an astroturf group to “fight for patients rights”.  Like the right to have tubes of deadly cream lying around…

UPDATE From a colleague’s email –

One strategy that seems to work well in Texas is to approach every compound as Experimental and Investigational and require prior authorization for ALL. The Texas WC UR rules appear to allow for that approach since essentially none of the compounds has gone through specific FDA approval. Without high quality (or essentially any) studies to support their use compounds can only be viewed as E&I in Texas.

At least one large carrier I know of is approaching compounds this way in Texas and other jurisdictions.

For those interested in the current state of research into compounds and workers’ comp, CompPharma’s research paper can be downloaded here.

What does this mean for you?

DO NOT approve compounds without proof of medical necessity and safety.


Jul
3

Stop reading this

do your real work, and get out early to enjoy the holiday.

Not to worry, we’ll be carefully monitoring all things relevant to workers comp, medical management, and health policy while you’re doing the family thing, soaking up Vitamin D, and avoiding Hurricane Arthur.

See you Monday.


Jul
2

Seven out of ten work comp adjusters say…

Senior Associate Jack Johnston joins us again, getting us up to speed on his research into work comp adjusters –

Over the past month or so I’ve been doing research on the claims adjuster profession to get a better understanding of what adjusters like, don’t like, and what their managers can do better – both in improving the adjuster’s lot and the companies they work for. From what I’ve gathered from various online sources, for the most part, adjusters aren’t the happiest, most fulfilled workers.

Gathering information from general websites such as www.glassdoor.com and adjuster-specific websites – www.claimspages.com, www.adjusterspace.org, and fromoneadjustertoanother.ning.com has produced a few positives and a lot of negatives.  Here’s what adjusters have to say about their job and the company they work for:

The Good:

Among those with good things to say, when it came to the pros a lot of them talked about the good benefits they received.  Getting paid during time off and having a 401k; can’t complain about that!  Another somewhat common pro was the flexibility of the work schedule.  Some adjusters stated that if they were doing well enough with work, they could get permission to work from home.  Other adjuster work-life positives included satisfaction with their compensation and the enjoyable camaraderie with co-workers.

The Bad & the Ugly:

While there were a lot of different complaints listed in the many sites I was researching, there were a handful that popped up repeatedly.

Let’s start with caseloads.  There seems to be a ridiculous number of cases handled by some adjusters, forcing them to work overtime (which they don’t get paid for).  Overall, most adjusters appear to be overworked; common complaints included: we are “always behind on work” and “There was an enormous amount of work that is expected of everyone, and it can be very defeating to have most of your days end without a feeling of accomplishment. (sic)” 

Even if an adjuster is doing a good job in the office (or at home), s/he probably shouldn’t expect much of a reward.  Promotions are scarce and raises tend to be paltry, with most getting a 1-2% increase (and that’s only if you are lucky enough to be given a raise).  The lack of ability to move up in the organization has upset many of the adjusters as they feel they aren’t rewarded for the work they put in with the heavy caseloads they deal with every day.

A fair amount of reviewers I read complained that instead of promoting within their company, the firm would hire someone from an outside company and place them in the higher position.  That’s a low blow to the employees who have been working there for years, expecting their effort and loyalty to lead to more responsibility and more income only to see the new person get the job.

Another common complaint is that managers are not qualified and don’t do a good job providing feedback to adjusters.  The adjusters never receive compliments or congratulations and are always told what they are doing wrong and how much more work they have to do.  They complain that they are not trained enough to handle some of their cases efficiently and they also feel that their offices are understaffed.  The adjusters want upper management to be realistic.

Conclusion:

I understand that this is certainly not the voice of all of the claims adjusters in the workers’ comp world but this is what I’ve found.  Websites like www.glassdoor.com can be easily accessed and false information, positive or negative, can be posted by bad actors. 

With that said, 69.2% of adjusters on the glassdoor website would not recommend their job to a friend.

Summary:

  • Adjusters like their benefits, salary, and co-workers… for the most part.
  • Schedules can be flexible (can work from home with permission).
  • No raises, room for growth, and no pay for working OT.
  • Overworked, large caseloads.
  • Always behind on work.
  • Lack of feedback from upper management.
  • And perhaps the most telling quote – “Run, do not work here”

Jul
1

Hartford changes Medical Directors

As of next Monday, Marcos Iglesias MD will be moving from Midwest Employers to the Hartford, where he will be taking over as Medical Director from Rob Bonner, MD.

I know both well, and the move is a good one.  Rob has done yeoman work at the Hartford, particularly in the areas of pharmacy, disability rating, and analytics.  He’s also been a leading voice in the effort to add more science to the practice of workers’ comp medicine, speaking out against physician dispensing, directing research on compound medications, and leading a key committee at the American Insurance Ass’n focused on workers’ comp. I’ve worked with Rob on a number of issues, and hope to work with him in the future on projects as he transitions to a less-full-time schedule.

Marcos is equally passionate about the right care for the right patient.  With extensive experience in occupational medicine practice as well as leadership roles at several insurers, he will bring an equally strong voice to the Hartford.

I’d be remiss if I did not acknowledge the insight shown by Midwest Employers in actually staffing a corporate medical director position.  I can’t think of any other reinsurers with MDs, and far too few primary insurers have full-time medical directors. Among those that do, many don’t have anywhere near the influence, responsibility, or authority they need and deserve. The Hartford is one insurer where the Medical Director does more than most; alas most workers’ comp payers don’t understand that medical is now approaching 2/3 of claims costs.

If they did, there’d be a lot more medical directors with a lot more authority and responsibility.

What does this mean for you?

Does your work comp insurer get it?

 


Jun
27

Friday catch-up

A rather busy week to be sure.   Not exactly beach reading, but plenty of food for thought while you’re manning the grill, watching the game, or lolling about.

Reform rollout

The biggest news was the decline in health care costs, an occurrence that surprised everyone.  If you missed it, healthcare spending declined by 1.4% in the first quarter of 2014 – earlier predictions had it increasing by almost 10 percent.  

Pundits who had cited the earlier incorrect figures as evidence of the horribleness of Obamacare are looking pretty, well, stupid.  If they blame increases on O-care, shouldn’t they attribute declines to it as well?  Not if you’re the Wall Street Journal...who gets this week’s prize for convoluting facts to fit their worldview…

Before we get too giddy, I’d expect costs to bump up this quarter and next as the newly insured start using their benefits.  Hopefully PPACA advocates won’t make the mistake opponents have and read too much into the numbers.  We’re a long way from understanding the impact of PPACA on cost trends…

A helpful analysis by the Kaiser Family Foundation on the impact of Medicaid non-expansion in the South reveals:

  • nearly 80% of the 4.8 million uninsured US adults who fall into the coverage gap (no Medicaid and can’t afford insurance) live in the South;
  • the coverage gap in the South disproportionately affects people of color.

Another KFF report indicates:

  • 57% of Exchange enrollees were previously uninsured
  • many are enrolled in narrow-network plans
  • most think their health plans are a good value, but some still struggle with the premiums

The work comp world

With the reports that Aetna is looking to sell Coventry’s work comp business, there has been lots of talk about who’s going to do the deal. CWC’s revenues have been declining for the last three years, so there isn’t a huge amount of interest among financial buyers.  Apax/OneCall is the early frontrunner; the investment firm seems to have an insatiable appetite, bottomless cash (and credit) resources, and a remarkable ability to see high values where other potential investors do not.

A key point worth pondering – Aetna has NOT re-contracted their provider network; any buyer will have to convince providers to sign a work comp-only contract.  Considering comp is just over 1 percent of US medical spend, and many providers never see a work comp patient, and  very, very few providers have more than one work comp patient a month, and (sources tell me) at least half of the Coventry work comp network’s providers likely don’t even know they are IN the Coventry work comp network, that’s going to be a heavy lift.

A timely report from WCRI analyzes Ambulatory Surgical Center costs, prices, and expansion; the brainiacs in Boston have come looked at 23 states and find there’s not a lot of consistency across the group with ASCs less costly than hospitals in some states and pricier in others.  Another report looks just at prices paid to ASCs – which are also wildly variable…

The agenda for this fall’s Las Vegas National Workers Comp meeting is out; one timely session will feature principals from three investment firms very active in the work comp space; they will be discussing the role of private equity in workers’ comp.

Make those plans now!


Jun
25

Aetna is selling Coventry Workers’ Comp

It was perhaps the worst-kept secret in the industry; Aetna’s effort to sell the Coventry work comp business.

Now the secret is out, and yes it is true – they are looking to sell the entire thing – network, bill review, PBM, case management, and the rest.  

While a couple of friends have chided me – and undoubtedly more will – for my statements that this wouldn’t happen, I’d suggest that it may not.

The reasons are two-fold.  First, the PBM, FirstScript, uses Express Script’s retail pharmacy network and processing engine.  It represents about a third of the total revenues of Coventry Work Comp (CWC).  If Express decides it wants to own that business, or terminates the network and processing engine deals, FirstScript is in trouble.  Anyone looking at CWC is going to look at that as a risk.

Second, Aetna still has not figured out how to deal with the network contract issue. As I noted in a previous post:

The network generates the lion’s share of the margin; if Aetna wanted to sell the WC business it is hard to see how it could transfer the network’s provider contracts to the new owner as most are a combined WC/group/governmental contract. Sure, Aetna could guarantee access to their contracts going forward for some period certain, but given Aetna’s history with workers comp, any buyer would be very reluctant to bet the future of their investment on that guarantee.

Word is Aetna is NOT going to support the work comp contracts, which means whoever buys CWC – if anyone does – is going to have to convince providers to sign a contract based solely on work comp claims.  Considering workers’ comp accounts for just over 1 percent of total US medical spend, that’s a tough sell.  

So, who’s likely to bid on the asset that some lunatic said could go for as much as $1.5 billion?  (must’ve been on their way out of Colorado at the time..).

We’ll dig in to that later…


Jun
25

Mark Walls returns to Safety National

Well, done, Safety National.

As reported by WorkCompCentral, the reinsurer returned Mark Walls to the fold, but in a much more prominent position and one where his value will be maximized.

Kudos to Marsh for figuring out Mark was a valuable commodity and bringing him on board to run their Workers Comp Center of Excellence.  While obvious no-brainer, it was a brilliant move.  It paid off big-time for Marsh as they benefited greatly from the exposure and brand enhancement that came every time one of Mark’s 22,800 (!!) LinkedIn group members logged onto the group site.

Now that he’s back in the friendly halls of SN, he’s got the role, responsibility, and freedom he should have had all along.  When Mark Walls left Safety National to take a position with Marsh, I was rather critical of the reinsurer; now that they’ve brought him back I would be remiss indeed if I did not compliment them on the move.  According to their announcement, Mark will “oversee thought leadership activities and external communications, including developing content for white papers, social media, webinars and speaking engagements…”

In other words, he’ll be Mark – bringing his deep and broad market following, insights and intel, and his own particular brand of humor and rather unique dance moves and alter egos back to whence they came.

Reporting to the top gives Mark the access and SN the direct connection to the market needed to maximize his value.  One suggestion for Mark’s boss – now that he’s back, don’t get all “insurance” on him.  Recognize that his value is immediacy, exposure, his voice.  Don’t wordsmith, monitor, oversee, “manage” the guy – sure he’ll say some things (or wear some costumes) on occasion that will make you wonder, but that’s who he is and why he’s so damn good at getting you the recognition you want.

What does this mean for you?

Good for Mark, and good for Safety National.  And for the rest of you out there in insurance-world, wake up.  SN got a huge bargain, and you missed out.  

 

 


Jun
20

Friday catch-up – non-competes, compounds, and clustermesses

It is a gorgeous day in upstate NY – not that every day in upstate isn’t fabulous.  Hope your weather is equally spectacular.  This week has been nuts…between deals, indictments, PPACA enrollment…gosh how’s a guy supposed to keep up!

First up, my post earlier this week about non-competes generated a lot of attention and more than a few resumes.  I can’t act as a clearinghouse for folks hiring and looking to be hired (much as I’d like to), but a couple companies did reach out to let me know they are looking for workers – non-compete or no.

Broadspire is looking for a bunch of talented, motivated, hardworking people eager to work for a company that cares about them.  Jobs are listed here.

Dane Street is as well – they’ve got eleven jobs open as of now; check them out here.

Evidently OneCall is also hiring, as a friend asked me my thoughts on potentially working for the company.  No comment.

Alas, there are OTHER jobs out there – for people who want to earn “$300 to $1200 per Script and all of its refills” touting compound medications.  The fine folks at TYY Consulting are doing their best to get those meds to people who need them!

Gosh these people are great; “Every patient receives their medication, even if not approved. Should a patient’s script be declined, we send them a 40 gram emergency supply, overnight, and free!!!”

Oh, the wonder of it all!!!

In what can only be described as exquisite timing, WorkCompCentral’s Greg Jones authored a piece in today’s WCC concerning the indictment of a bunch of California docs, “business people”, pharmacists, and assorted hangers-on for a scheme allegedly involving payments of more than $25 million to encourage docs to write scripts for three compound creams that just happened to be formulated based on the profitability of their ingredients.

Hmmmm.  I’m quite sure this is an isolated, one-off case, and wouldn’t want anyone considering a career in the compounding industry to worry at all about any potential legal issues.

The fine folks at Liberty Mutual are encouraging their employees in PA to let their legislators know they support a bill limiting physician dispensing – a practice awfully similar to compounding in that it sucks money out of employers and taxpayers for no good reason.  Kudos to Miss Liberty for pushing this – and hey, other insurers, let’s get cracking, eh?

here’s an excerpt from their piece…

HB 1846 is currently supported by the Pennsylvania Workers’ Compensation Advisory Council (WCAC) so please let your Pennsylvania state Senators know you also support HB 1846, without amendments, by writing an email or making a call today. Take action today and don’t let the orthopods and dispensers dilute this bill.

Click Here to View HB 1846

1) CONTACT one or more members of the Pennsylvania State Senate at the Pennsylvania House and urge them to vote yes on HB 1846 

Despite some wishful thinking to the contrary on the part of at least one CompIQ staffer, that app is going the way of…CompReview, PowerTrak, BR 4.0 and other expired/ing bill review platforms.  Shockingly, StrataWare will be the survivor of the acquisition of StrataCare by Xerox.  I know…who woulda thunk it?

I’d be remiss if I didn’t acknowledge and applaud Bob Wilson’s ongoing efforts to keep us informed about the clustermess that SAIF is making out of the firing of former CEO John Plotkin. Bob is setting a standard here that I won’t even try to meet; kudos to him for keeping a very bright – and extremely well-written – focus on this blatant injustice.

No one can turn a phrase into a knife like Bob can…to wit: ” a huge crapfest ensues, ensnaring all involved into a quagmire-like vortex of controversy.”

Bravo, Bob-o!

I’m also going to nominate SAIF employees for workers of the year; the way these folks have rallied behind John is just, well, unprecedented?  And this for a guy who was just there for a few months.

So here’s to you, SAIFers…a toast with your favorite Gilgamesh 22 – or perhaps a great Oregon Pinot Noir!