Sep
3

If other services were like healthcare…

There’s this ongoing debate/discussion about healthcare as an economic good.  Fact is, unlike flat panel TVs or cars, healthcare is quite different for a whole bunch of reasons;;

  • we often don’t know what services we need,
  • even experts are often unable to make informed decisions,
  • we don’t know what the cost will be, and
  • even if we’re given an estimate up front, that’s just an estimate,
  • once you’ve paid your out-of-pocket maximum you don’t care about cost, and
  • in many circumstances the emotion involved makes rational decision making impossible

To further explain how healthcare is different, I offer Sarah Mirk’s take on what would happen if other services were like healthcare…

How the health insurance marketplace works – School!

How emergency healthcare works – Fire departments!

More of Sarah’s work – and a lot of other cool stuff – is at The Nib.


Aug
26

Here’s what happened last week…

People who enroll in exchange programs in red states pay 3.2 percent more for their health insurance than folks in purple or blue states.  Research indicates it is because fewer folks in red states sign up for coverage – and these are likely the healthier people.

Families pay about a third of their healthcare costs, with employers picking up most of the rest.

In part that may be because healthcare now costs more than a new car…Yet one more straw on that poor camel’s back…

Yet another indicator that the healthcare market continues to rapidly consolidate came last week with news that Tufts and Harvard Pilgrim look to be merging.

A you-should-definitely-read-this piece from Harvard Business Review reminds us that variations in data should be considered thru the lens of statistics, not emotion or intuition. An excerpt:

Sorting out variation provides needed context, points to opportunity, and helps managers maintain their cool when something goes wrong. Managers should learn how to measure variation, understand what it tells them about their business, decompose it, and, when necessary, reduce it.

WCRI’s Vennela Thumula PharmD will be discussing Interstate variations in opioid dispensing in a webinar on September 12.  Dr Thumula is one of the nation’s leading experts on workers’ comp opioids and well worth your listen. Register here.

Great piece from HealthAffairs on evidence-based treatment guidelines.  There’s a lot of nonsense and BS out there – especially in workers’ comp guidelines – and this article provides a solid foundation to understand what’s real and what isn’t. Here’s the central message…

There are two core issues that lead to a host of problems. First, there is a lack of centralized authority to coordinate, vet, approve, and catalog guidelines. Second, there is an absence of a universal methodology to create guidelines—every professional organization promulgating guidelines today generally decides freely which, if any, framework they will use to construct guidelines.

Finally, if you want to understand how to incentivize physicians – and improve your ability to work with them, read this.

take time to develop relationships with physicians. I need to develop trust. I need to convey the why. And then, once we do that, you can begin to move into the how and the what. And then physicians are ready to look at the dashboards to help you move them forward.

 


May
22

Bankruptcy: financial risk and patient impact

What are your risks if one of your vendors goes bankrupt?

Health insurers have gone belly-up in the past, in some cases leaving hundreds of millions in unpaid claims.

Here’s a potential scenario, where a payer – say a TPA or insurer – contracts with a vendor to handle certain types of medical services. The vendor schedules the patient, the patient gets the care, the provider bills the vendor; the vendor bills and is paid by the payer. 30-60 days later the vendor pays the provider.

At least, that’s how it is supposed to work.

Now let’s say the vendor runs into cash flow problems. Provider payment delays increase, and soon there are complaints from providers to the payer, or worse, regulators.

Some savvy payers who stay on top of this stuff immediately require the vendor pay their treating providers immediately after the payer reimburses the vendor. Others figure it’s no big deal and it will work out.

This goes on for a little while longer, until the vendor’s owners – let’s say a big investment firm – decide to walk away and write off their stake in the vendor. The new “owners” are the debt holders, the firms that bought bonds issued by the vendor’s owners. Now, the value of those bonds has dropped , and the bondholders need to quickly re-organize the vendor to cut their losses.

The new owners declare bankruptcy so they can buy some time while they figure out what to do.

No big deal, you say…companies go bankrupt all the time…someone will buy the vendor, and all will be fine.

Uh, no.

The treating providers who are delivering care to your patients now demand that you – the payer – guarantee payment for past bills and for scheduled care. You protest that you’ve already paid those past bills. The treating providers point out that no one’s paid them, and now that the vendor is in bankruptcy, there is no assurance they will ever be paid all they are owed.

The potential consequences include:

  • the patient gets billed, and/or;
  • the Insurance Commission weighs in, and/or;
  • treating providers refuse to continue or deliver treatment until payment is guaranteed by the payer.

So, payers may have to A) pay twice for the care that has been already billed and paid, and B) do so immediately or risk angry patients not getting treated, calling lawyers, and staying out of work even longer.

That’s the immediate problem – and it has to be addressed immediately.

There’s a bigger problem, though, and it’s almost as urgent. 

If the bankrupt vendor is a dominant player in its niche(s), do other vendors have enough capacity to quickly step in and take over? 

If not, how quickly can they ramp up?

If the answer is “not for a while”, how are you going to schedule treatment, collect and review data, manage care – all those functions the vendor was performing?

If you’re a TPA, the problem is even knottier. How do you go back to your employer/insurer clients and tell them they need to pay again for services they already paid for? Oh, and the vendor in question is one you – the TPA – recommended?

What does this mean for you?

Hopefully…nothing.

 

 

 


Nov
20

Customer Service, part 2

Well, who knew a holiday week post on customer service would be so popular?

It appears we struck a nerve there, perhaps driven as much by universal frustration with big “service” companies as anything else.

To that point, here’s an example of a huge business that completely misses the point.

This summer American Airlines allowed flight attendants to give little things to passengers upset about delays or other problems. Frequent flyer miles, drink coupons, seat upgrades, stuff that didn’t cost AA anything but made angry passengers feel that AA cared about the problems the airline caused.

Then, some genius at HQ decided this was a bad idea.

This from Forbes:

Every time some bright young marketing executive tried to make American (or some other airline) more responsive, and more quickly responsive to passengers’ dissatisfaction by empowering front-line workers to offer some form of compensation, the bean counters back at headquarters quickly noticed that the cost of such empowerment escalated rapidly. The result, alas, always has been the dramatic reduction or elimination of front-line workers’ authority to solve customer service issues at the point of contact.

Instead of fixing the problem, the corporate knuckleheads tried to deal with the fallout – but stopped when it cost too much. 

This is exactly what killed US manufacturing, autos, and many other businesses. At the end of their assembly lines, GM, Ford, and Chrysler diverted many just-built cars with manufacturing defects to another mini-factory.

Auto worker using hammers to straighten a hood on a just-built car…

There, very skilled and very expensive workers diagnosed and fixed cars that had just been built. These guys are yesterday’s American Airlines flight attendants, tasked with fixing problems caused by management.

Clearly senior management didn’t understand that if they spent the time and energy and dollars to do it right the first time, they wouldn’t have to a) fix problems with cars they just built, and b) deal with pissed-off customers.

Yes, it takes that time and energy and dollars. But the results are measured in customers kept, service problems eliminated, and extra costs avoided.

Or, you can just wait for your businesses’ version of Honda to come in and eat your lunch.

What does this mean for you?

Find out what your customers want, and do it right the first time. They will love you and reward you for it.

 

 

 

 


Nov
19

It’s all about customer service

HSA’s third Survey of Bill Review in Workers’ Comp and Auto is done – final editing is in process and we’ll have the report out shortly. There’s one key takeaway – it’s all about customer service.

We will dig into the details next week, but first a couple thoughts about “customer service.”

The core of customer service is this: the customer wants to feel valued, that they are important to the seller. There are two basic ways of achieving that – thru organizational policy and by individual employee actions.

I fly American Airlines a lot, and almost exclusively. I’ve long figured that it’s best to have some “status” with an airline because something bad will inevitably happen and when it does you need some stature to get any help at all. In general, that works out. But of late, the “value” of my loyalty has dropped considerably. While I’m still piling up the miles, American seems to have made the corporate decision that it is now “Too Big To Care.”

AA is the world’s largest airline, flies everywhere, and probably thinks it can do what it pleases and we’ll just have to deal with it.

Verizon has a similar Too Big to Care perspective. As the dominant wireless carrier, they are all about maximizing revenue from each customer, and in my experience give their service staff little leeway to fix problems or come up with creative solutions.

USAA has long had a reputation as the best personal lines insurer, but of late it’s customer focus seems to have been shoved aside in favor of snappy TV ads during football games. You have to put your dollars somewhere, and it’s cool to be an exec in a company your neighbors see on the tube.

These three organizations are surveying me all the time about service, about how smiley the flight attendants are, how fast they answered the phone, whether I was happy or not with the encounter with customer service.

Wrong questions.

These are questions intended to rate, reward, and penalize the folks on the phone, at the counter, at the airport. Instead, the should be asking customers what upset them about the service or how they change their policies to do better.

Because most times it’s not the person, it’s the policy.

For example – Dumb corporate edicts about closing flight doors 10 minutes before “departure” time may help on-time performance stats, but they piss off late arriving customers. The bigwigs are missing the point – who cares about on-time performance if you can’t get on the damn plane?

What these companies are missing is understanding that people care about how they are treated as individuals, which means these huge organizations have to give their service people the leeway, training, and flexibility to solve the customer’s problem.

And this isn’t apologizing and offering to rebook on another flight sometime in the next couple of days in seats by the rear restroom. It is keeping the plane’s doors open, or giving a credit when a customer misreads a confusing policy or doesn’t exactly comply with a process designed to make the seller’s workflow easier.

So, what does this all have to do with bill review?

These three companies are all Too Big To Care.

With consolidation increasing in work comp, it’s possible some vendors may get Too Big To Care.  In fact, it’s likely. 

That opens up opportunities for others, for companies that understand what patients, providers, employers want and need, and give their front-line staff the ability to deliver on those wants and needs.

What does this mean for you?

Customer service starts with understanding that customers want to feel like you care. It’s a ton of work to figure this out, but the rewards are long, stable, and profitable customer relationships.


Apr
13

When are you going to sue the opioid industry?

States, cities, counties, school districts, and individuals all have sued the opioid industry.  A lot of these have been consolidated in one suit in Federal District Court in Cleveland under what is known as Multidistrict Litigation or MDL. The judge in that case has ordered trials to begin in 2019.

Courts and law enforcement go after penny-ante street dealers, narcos, and their supply chain, and now they are going after guys like this…

This is Arthur Sackler MD of Purdue Pharma, courtesy Wikipedia.

In Cleveland, Judge Polster has ordered the DEA to turn over voluminous records of opioid transactions next week. The records, for a handful of states for 2006 – 2014, will be used to identify what drugs were shipped where by whom.

While hundreds of cases have been consolidated into this one, the Judge, Dan Aaron Polster, has no jurisdiction over many more suits that have been filed independently by individuals, employers, providers, estates, and others.

But the MDL case overseen by Judge Polster is instructive, as he is focused on not only resolving the case, but finding long-term answers to what will certainly be a decades-long struggle to deal with the harm caused by the opioid industry. His intent appears to be to help identify financial resources to help pay for that work.

From the LaCrosse Tribune:

The judge’s ultimate goal is to “dramatically reduce the number of the pills that are out there and make sure that the pills that are out there are being used properly.

“The court observes that the vast oversupply of opioid drugs in the United States has caused a plague on its citizens and their local and State governments. Plaintiffs’ request for the … data, which will allow Plaintiffs to discover how and where the virus grew, is a reasonable step toward defeating the disease,” the judge wrote in an order.

Estimates of the harm already caused and the bills that will come due are in the hundred billion dollar plus range, this for an industry that sold almost $10 billion in opioids in one year, 2015.

So, back to my question.

When is the workers’ compensation industry, a group that buys way more than 10% of the opioids sold every year, going to sue the opioid manufacturers and marketers? 

We are waiting…


Apr
5

Compounds – the stench of corruption

There’s a bill in the US House of Representatives that would greatly expand compounding, drastically reduce the FDA’s ability to oversee compounding, and eliminate many of the desperately-needed controls on this occasionally-deadly and often-abused practice.

Why anyone thinks this is good idea is beyond me, but someone convinced Rep. H Morgan Griffith (R VA) to write a bill and introduce it in Congress, and Rep Henry Cuellar (D TX) and others to co-sponsor Griffith’s bill.

That “someone” may have deep pockets.

Griffith has received over $100,000 in donations from “health professionals” and pharma entities; Cuellar got money too.

Griffith also got more money from the “International Academy of Compounding Pharmacists” than any other candidate for any Federal office.  The IACP has spent millions lobbying Congress to strip the FDA of authority and eliminate controls over compounding.

The IACP and other organizations are seeking to rewrite regulations issued after the New England Compounding disaster, a tragedy that saw hundreds of people sickened and scores killed by contaminated compounded medications. These medications were prepared and shipped by the NECC, a business in Massachusetts that happened to be located right next to a recycling center owned by the same family.

(This is relevant because ventilation systems were one of the problems identified by investigators looking into the causes of contamination in NECC’s products.)

The regulations were issued to implement a law passed by Congress in response to a Congressional inquiry into the disaster.

From wikipedia:

In a congressional hearing the FDA Commissioner was asked why regulators at the FDA and the Massachusetts Board of Pharmacy did not take action against the pharmacy years earlier. The legislators were told that the agency was obligated to defer to Massachusetts authorities, who had more direct oversight over pharmacies.

Yet Griffith’s bill would overturn many of the desperately-needed controls now in place:

The bill exempts from interstate distribution limits the dispensing of a compounded drug from the facility where it is compounded to a patient or health facility.

The scope of Food and Drug Administration (FDA) inspections of compounding pharmacies is limited to pertinent equipment, materials, containers, and labeling, which is the same scope as inspections of pharmacies. (Currently, the scope of inspections of compounding pharmacies is the same scope as inspections of drug manufacturers.)

The bill eliminates the requirement for compounding pharmacies to register with the FDA as drug manufacturers.

As a side note, we’re seeing a dramatic decrease in compounds in workers’ comp, driven by payers’ refusal to pay outrageous charges for “medications” with no proven efficacy. In our annual Survey of Prescription Drug Management in Work Comp, respondents are reporting they paid for far fewer compounds last year than the year before.

That decrease could reverse if Griffith’s bill is passed, and we could well see a return to the days of poorly-regulated profit mills masquerading as compounding pharmacies.

What does this mean for you?

Elections have consequences, and campaign finance laws are killing us.


Apr
1

Federalization of work comp; death by DOL?

Who thought the much-feared Federalization of workers comp would result in this.

A new regulation finalized by the US Department of Labor on April 1 overturns state requirements for workers’ compensation, while limiting employers’ liability for occupational injuries or illnesses. President Trump alluded to the pending change in his speech in Ohio earlier in the week.

The speech was supposed to focus on infrastructure, but it appears Trump had the new DOL regulation in mind when he noted the maze of workers’ comp laws makes it very hard for businesses to operate across state lines. Removing these “burdensome” constraints would “unleash all American businesses.”

One newspaper account noted

“a key part of his plan, he said, is to reduce a burdensome regulatory approval waiting time from as long as a dozen years to a year, by establishing one federal point of contact for a yes or no answer on a project.”

While there have been many far-reaching cutbacks in regulations directly or nominally affecting employers, this latest is undoubtedly the most significant seen to date.

According to a statement from Acting Associate Deputy Secretary for Policy Aprille Pfuehle; “The regulation essentially sets a Federal Maximum Standard for coverage and benefits for occupational illnesses and injuries. Employers with workers in any state with benefits greater than a to-be-determined Federal Maximum Standard can opt to be regulated by DOL and not that state.”

Employers who choose DOL regulation evidently will have additional protection from liability as well. While I’m no employment law expert, it appears the Trump Administration is relying on ERISA pre-emption as the lever to dis-engage occupational coverage from state regulation.

The regulation was reportedly developed and written by DOL’s Office of Congressional and Intergovernmental Affairs, under the direction of the Assistant Secretary; no other information was provided as to the rationale behind this.

No details on what entity is going to develop the Federal Maximum Standards were provided, nor was there any timeframe given. Given the magnitude of this change, we can expect it will take months to make any progress, and any change will certainly result in legal challenges.

Part of the Trump Administration’s ongoing effort to reduce the impact of ‘unnecessary regulations” on businesses, this follows earlier moves to delay or eliminate a host of workplace safety regulations, including beryllium exposure standards, medical benefits for US Energy Department workers exposed to radiation, and cutbacks on enforcement of wage/hour regulations.

While we knew the Trump Administration has been very business-friendly, this latest goes much further than these earlier efforts.

 

 

 

 

 

 


Mar
16

Quick takeaways from CWCI’s annual meeting

One of the best conferences of the year is CWCI’s annual get together in Oakland California.

More information is packed into a morning than you’ll find in most multi-day events – and in a more entertaining format – and no one is more informative and entertaining than CWCI’s Alex Swedlow (I’m fortunate indeed to count Alex as a good friend and colleague).

First question – As Alex noted, way back in the pre-Triangle Shirtwaist fire days (no, I wasn’t around then), business claimed 95% of injuries were considered to be the fault of the workers – what is the actual number?

And why do many claims organizations/processes seem to operate as if that statistic is true today?

Okay, back to key takaeaways…

  • Average drug spend dropped 34% from 2012 to 2015 – Rx and DME combined amount to 8 percent of total spend of med payments at 24 months after inception
  • Opioid spend dropped dramatically, while NSAIDs went up.
  • Compared to all claims reported, Cumulative Trauma injuries have increased – a lot – since 2009. CWCI thoroughly debunked the contention by others that CT cases have decreased.
  • IMR decisions continue to uphold UR determinations more than nine times out of ten, a rate that’s held steady since 2014.
  • UR decisions on compounds are upheld in 99.2 percent of all cases.
  • Work comp administrative expenses are higher in California than any other state – by a lot. Part of the answer is the outright abuse of the IMR process by a handful of scummy providers in SoCal…and a couple up north too.

Gary Franklin MD gave a compelling, passionate, and pointed argument that opioid manufacturers are at fault for the disaster that’s killed more than 200,000 of us. Gary never hesitates, never waivers, and is the individual who has done more than anyone else to confront the opioid issue.

More to come next week.