Air traffic controllers, health care, and Head Start

I fly a lot. You probably do too.  Flying is not much fun – when it’s not downright miserable.  So the news that the furlough of air traffic controllers mandated by sequestration was leading to even more delays was most unwelcome.

Some rejoiced when Congress passed legislation allowing the FAA to stop furloughing workers  – and I’ll admit I was one of the some. Typical American – it’s all about me and my personal convenience.

In the cold light of morning, that’s a very short-sighted perspective.

Sequestration was supposed to be so bad that even the intransigent Congress would come together to pass a budget.  If the FBI couldn’t add any new agents, pork producers couldn’t get their meat inspected, physicians’ payments were reduced, drug approvals delayed, weather reports and warnings more sporadic, Head Start enrollment reduced, the hue and cry would be so unthinkable that even Congress would compromise.

Alas, rather than compromise, some Congresspeole decided protecting their principles was far more important than anything else.

Until the folks who vote complained that – God forbid – they might have to spend another hour in the terminal waiting for a flight.

Congress – Dems and Reps alike – and the President – promptly caved on their principles, ended the certainly annoying but not life-altering inconvenience of travel delays, and thereby showed that flight delays are waaaaaay more important than real solutions to real problems – health care fraud, runaway health care costs, poorly-educated kids, national security.  

If anyone still thinks they’ll solve the big problems, think again.  This was the perfect issue to force compromise.  A principled stand by anyone would have (perhaps) forced compromise – the public was feeling the effects, and that public outrage, channeled effectively, was precisely the intent of the sequestration.

Nope.  When the going got tough a little uncomfortable, the spineless caved. And in so doing screwed the country.




WCRI hosted a webinar yesterday to discuss WCRI’s latest research into long term users of opioids, policy options and recommendations.  The event topped the list of best-attended webinars – the problems associated with opioids and potential solutions thereto is a critical issue facing all workers’ comp payers.

Dr Dongchun Wang started with a review of WCRI’s new information – with a focus on longer-term usage – lost time, musculoskeletal-related injuries without surgery who received opioids more than 6 months after injury. Here are a few of Dr Wang’s highlights:

  • In Louisiana, one in six claimants who received opioids early on were long term users, in other states it is one in ten.
  • The use of other treatment modalities in conjunction with opioids was quite low – 24% of claimants from 2009 – 2011 were receiving drug testing – ten points higher than the two previous years – whoever range was from 18% – 30%.
  • This was far better than psych evals – which were in the mid-single digits.  Very few claimants are evaluated on the front end for psych issues, or get psych treatment.

Dr Kathryn Mueller followed up with a discussion of the global pain problem and attendant issues with opioid over-prescribing and abuse.  Claimant MEDs (morphine equivalent dosage) varied by a factor of four across the study states.  This despite consistent guidance from all sources recommending limited use of opioids. ACOEM calls for limiting opioids to 3-10 days while all guidelines re CNCP (chronic non-cancer pain) essentially include the same treatment for pain – limited opioids, use of NSAIDs, manage not end pain, use CBT (cognitive behavioral therapy, 6-10 visits typically).  Opioid therapy is a very small part of pain therapy, which should also require documentation of functional improvement and change. Dr Mueller also:

  • recommended accessing PDMsP.
  • recommended including weaning language in all opioid agreements.
  • noted there are no studies that show long acting opioids are preferred or have better outcomes than short acting – and no evidence for or against a specific drug.
  • noted CO has a drug monitoring payment code to encourage payment for physicians managing opioids
  • said re urine drug monitoring, that physicians need confirmatory testing of metabolites and not just in-office screening

Dr Dean Hashimoto finished up; we will review his comments in a later post.



Workers’ comp drug trends – good news at last, Part 2

Workers’ comp pharmacy benefit management firms devote significant resources to research, much of which is published in their annual drug trend reports.  Today we focus on PMSI’s just-released report…

The big news – narcotic utilization in the first year of the claim was down 7 percent from 2010 to 2012.  There was an increase in NSAIDs, indicating physician prescribers were substituting NSAIDs for narcotics, a major step in the right direct.  For all claims, narcotic utilization declined 3.2%, an indication that there was less of a decrease among older claimants. Nonetheless, the top drug by spend continued to be Oxycodone at 9.1%

PMSI’s 2013 Annual Drug Trends Report covers three years of in-network transactions totaling just under $1 billion in spend spread over 5.7 million transactions.  Their researchers use cost per day and average days supply to level set for changes; for 2012, cost per day was up 2.8% while utilization declined 2.7% for essentially no change in cost year over year.  This was driven in part by converting more claimants from retail to mail order and associated 21% lower price per day supply. (mail order meds are a lot cheaper)

The report also cites the key role of generic conversion – PMSI clients’ cost for generics was 75% less than for brand ($2.83 v $11.09).  Overall, both generic efficiency and generic fill rates were up; however this varies by age of claim as rates decreased as claims age.

The report includes several excellent charts and maps detailing various regulatory and legislative issues – physician dispensing regs, repackaging reimbursement limits and the like.  There’s also an excellent graphic showing how carisoprodol dispensed by a physician can cost more than ten times the retail pharmacy’s cost ($138.60 v $11.03 – p 10)

One item of interest – the cost per physician-dispensed pill in HI was $4.71 v $1.68 for pharmacy in 2012…

Finally, the big PBM’s clients saw good results from their acetaminophen program as it cut number of claimants taking more than recommended dose by 40%.

Considering this report and Progressive Solutions’, it appears that PBMs have been able to make some progress in reducing the use of narcotics on new claims.  It may also be that physician prescribing patterns are changing; I’m looking into that through a couple of sources to see if we can discern any overall pattern.

More to come.




Workers’ comp drug trends – good news at last – Part 1

There are three workers’ comp drug trend reports out this week; we’ll look at each one (in order I received them).  A cautionary note; it is difficult to compare PBMs’ performance on the basis of their reports; the metrics and basis for those metrics varies, their books of business are different (some have lots of very old claims, others have more state funds than national clients and there are also other differences in payer mix with some payers much more aggressive and willing to work with their PBM on specific issues).

First up is Progressive Solutions’ version. The big PBM saw an average reduction in spend per claim of 0.5 percent, driven by a combination of fewer days’ supply per script and fewer scripts per claim.  Progressive has invested heavily in predictive analytics; the payoff has been a significant drop in opioid usage for targeted claims (15% decrease in morphine equivalents).  The data shared in their report parses out the various factors driving claim cost and risk, with “pharmacy behavior”(number of prescribers, number of pharmacies, medications) becoming increasingly significant as a claim ages.

Progressive’s clients are seeing a reduction in opioids as well, with both long- and short-acting opioid script volume down. This has cut per-claim costs for opioids by 4.2 percent.

The report has an extensive and accessible section on legislative and regulatory trends, with discussions of state regs on repackaging, compounds, and physician dispensing.

The takeaways are this:

  • Analytics and modeling can drive much better results by focusing resources on the big problems. The PBM and WC industries need to continue to up their game, and get smarter about where, when, and how to address cost drivers – generic, one-size-fits-all approaches are costly, inefficient, administratively burdensome, and annoy claimants and physicians.
  • The impact of regulations and legislation on WC pharmacy, and thus workers’ comp costs and outcomes, is increasingly important.  Physician dispensing and compounding are two of the biggest profit-creators for those interested in sucking money out of the comp system.  It behooves all stakeholders to thoroughly understand these issues and get involved.
  • Opioids are being addressed – there’s much to do but a strong focus and assertive programs can and do deliver results.

Finally, Progressive’s report is well-designed and well-written.  Kudos to the folks who actually took all that research and translated it into language the rest of us can understand.




A tough week for work comp in Florida

Florida’s legislature is working thru several workers’ comp bills – and the news isn’t good.  A PDMP bill has been emasculated; Florida’s prescription drug monitoring program won’t require physicians check the system before prescribing drugs.

And while there’s ongoing negotiations on a bill addressing physician-dispensed drugs, at this point it looks like Florida’s employers will have to pay more for physician-dispensed drugs than they would if those drugs were dispensed by retail pharmacies.

This is a fluid situation and may well change – and we can only hope it does. We are also wondering where the retail pharmacies and food/drug combos are in the discussion; there is no evidence that physicians pay more for their drugs than drug stores do, so forcing employers and taxpayers to cough up millions to line the pockets of dispensers and their enablers is nothing more than extortion.

That said, it is clear that the Florida Medical Association has once again ignored their Hippocratic oath to do no harm; according to Mike Whitely’s piece in WorkCompCentral the FMA  got the bill’s sponsor, Rep. Mike Fasano R New Port Richey, to “drop a requirement that Florida physicians consult the PDMP before prescribing drugs on Schedules II and III of the US Drug Enforcement Administration’s controlled substances list.”

Notably Rep. Fasano appears to have removed that requirement in hopes that in so doing the bill would have a better chance of passage.  That said, the FMA’s position is short-sighted and self-serving.  According to the vice chair of the FL PDMP Foundation, it “makes sense for doctors to check the database and it takes 30 seconds.” [emphasis added].

So.  Thirty seconds is more important to the FMA – and their members – than preventing doctor-shopping, reducing criminal behavior, and saving lives.

Lest you think I’m being hyperbolic, doctor shopping kills people. And speaking about the Tennessee law requiring docs check the PDMP database before prescribing, “There’s no question the law there will reduce overprescribing and doctor-shopping, said Gary Zelizer, director of government affairs for the Tennessee Medical Association. Yet reducing over-prescribing, doctor-shopping, and the resulting deaths and injuries is less important than saving 30 seconds.

For those interested in doctor-shoppers’ views on PDMPs, read this.  Abusers hate PDMPs that mandate physician checks of the PDMP before prescribing.


Privately insured patients with post-surgical complications – infections, surgical errors, generate 2 – 3 times more margin for hospitals than patients without complications.

To be precise, the average surgery with complications generated $39,017 more “contribution margin” than those without errors or complications.  

According to the authors, “Depending on payer mix, many hospitals have the potential for adverse near-term financial consequences for decreasing postsurgical complications.” [emphasis added]

The authors – quite clearly – noted that there is no evidence, nor do they believe, that hospitals aren’t focused on eliminating these complications despite the obvious negative financial consequences.  And that’s not my point.

The point is this is yet another example of what happens when you pay providers to do things and not on the basis of how well they do them.  If you get a lousy meal in a good restaurant, they’ll usually comp it.  Bad hotel experience?  On the house.  Defective car?  It’s fixed under lemon laws.

But not health care.  If we based payment – at least in part – on the result, we’d likely see much more focus on that result.

What does this mean for you?

Why are you paying providers to fix problems they caused?



Opioids’ long term impact on workers’ comp – WCRI reports

Opioids will be the biggest problem the workers’ comp industry faces over the next few years.  WCRI’s hosting a webinar on the issue later this month, and I’d encourage you to sign up (do it fast, there’s a limit on attendees).

For those unaware of recent research on the issue, here are a few of the issues:

  • there’s huge variation among and between the states; according to WCRI’s latest research 17% of Louisiana claimants who started using opioids were still using them 3-6 months later, compared to about 3 percent in Arizona.  Clearly the risk of addiction/dependency in LA is much higher than in AZ.
  • Less than a quarter of all long-term opioid users were tested for drugs via urine drug screening.  When you factor in drug testing data that indicates a substantial percentage of claimants prescribed opioids don’t have evidence they’re taking them, it is clear employers and insurers are paying millions for opioids that may not be used for the intended purpose (to be generous).
  • In California, claimants prescribed opioids are off work 3.6 times longer; litigation is 60 percent higher, and their claim costs are twice as high as claimants who don’t receive opioids.

If opioids aren’t on your radar, they soon will be.

If not, you must be in Arizona.

What does this mean for you?

Sign up for the webinar


Sequestration’s impact on health care

For most, the federal budget sequestration (that’s the event, sequester is the verb, as in “to sequester, thanks Gary) has yet to make itself felt.

For some, it’s all too real; one person’s waste is another person’s livelihood.

Here’s a few ways the sequestration stalemate in Washington is affecting health care.

So, what does this mean for you?

Well, reduced reimbursement for hospitals, doctors, and drug companies may mean more cost shifting to privately insured patients.

That’s the macro issue.  On a personal level, cuts will affect individuals relying on free vaccinations, wages from medical research funded by NIH, Medicare reimbursement for their salaries, jobs for newly graduated nurses, and residency programs for newly-minted MDs.

There will also be a long-term, downstream impact that we won’t feel for some years – the FBI will not have any new agent classes for at least two years.  That’s not good for health care fraud investigations.  


Drug compounding’s continuing problems

According to the NYTimes, the FDA’s ongoing investigation into compounding pharmacies:

“found numerous unsafe practices at about 30 compounding pharmacies, the same type of facility responsible for the tainted drug that caused a deadly meningitis outbreak last year.

Among the problems found were unidentified black particles floating in vials of supposedly sterile medicines, rust and mold in clean rooms where such drugs are made, improper air flow, and clothing that left workers’ skin exposed.” [emphasis added]

If they aren’t, workers’ comp payers and medical management firms should be paying very close attention to these inspections.  There are three problems with compounds – they tend to be very costly, there is zero evidence that they help the healing process, and there is a wealth of evidence (see above) that compounds can be very dangerous – if not lethal.

Workers’ comp claimants harmed by compounds will incur expenses to address that harm – expense that will have to be covered by the workers’ comp payer.

The payer may also have to provide death benefits for claimants killed by compounds.

States that currently have a compounding problem are likely to see it grow – as it has in California.  States enjoying a compound-free experience are almost certain to be targeted by compounders and their enablers.

The list of FDA-inspected compounders is here.