Category: Research

Feb
27

Report from the Physician Dispensing Summit

Posted by Joe Paduda on Wednesday, February 27th, 2013 | Comments

Yesterday’s meeting in Boston was very, very productive.  The audience included trade groups, insurers, TPAs, large employers, physicians, researchers, regulators, analysts, PBMs, and media, all focused on the single issue of physician dispensing.

Among the sessions was a report on a just-completed study of the impact of dispensing on claim outcomes – very compelling and highly revealing.

Here were some of the other highlights:

AIA CEO Leigh Ann Pusey led off with the keynote; the fact that Ms Pusey took the time to prepare for and attend the Summit is revealing indeed; her members write over a hundred billion dollars of insurance premiums and are dealing with critical, industry-altering issues including Dodd-Frank, TRIA, and the sequester.  She was very knowledgeable and detailed the work AIA is doing both internally and with other groups and associations.  Suffice it to say that this is a very high priority for AIA and their members.

Dan Reynolds, managing editor of Risk and Insurance moderated an excellent panel on the issue of patient safety.  Pharmacists, a physician, and the nation’s leading authority on prescription drug monitoring programs provided insights into the risks inherent in physician dispensing.  Notably, John Eadie of Brandeis’ PDMP Center for Excellence revealed that most states require/request dispensing physicians access the PDMP prior to dispensing scheduled drugs.   He provided a guide for finding out how different states address the issue; I’ll provide a link in a later post.

Sedgwick’s Kimberly George noted that, where appropriate, the giant TPA uses physician dispensing as a data point in assessing and rating physicians. This can affect the volume of patients directed to specific practitioners.

For me, the major takeaway was CWCI’s analysis of the impact of physician dispensing on claim costs and outcomes.  Alex Swedlow’s concise presentation noted that after reform eliminated the upcharge for repackaged drugs;

  • each physician-dispensed repackaged drug prescription added $545 to the average medical benefit costs. 
  • paid medical benefits on claims with physician-dispensed repackaged drugs averaged $7,297, or 37.3 percent more than the $5,316 average for claims without these types of prescriptions.
  • indemnity payments on claims with physician-dispensed repackaged drugs averaged $5,039, or 28.2 percent more than the $3,930 average for claims without physician-dispensed repackaged drugs.
  • claims with physician-dispensed repacked drugs averaged 50.3 paid TD days – 8.9 percent more than the average of 46.2 days for claims without repackaged drugs.

The research, conducted by Swedlow, John Ireland, and Laura Gardner, destroys physician dispensers’ claim that better outcomes and lower costs result from physician dispensing.  

Undoubtedly, dispensing advocates will now roll out their PR flacks and physician shills in an attempt to refute CWCI’s study results, methodology, impact, and applicability to other states.

Good luck with that.

Swedlow, Ireland, and Gardner are three of the most respected researchers in this industry.  Their expertise, insight, intellectual rigor, and objectivity are beyond question.

With the release of CWCI’s excellent work, we can now refute every claimed benefit offered up by physician dispensers – leaving no doubt as to the only real benefit of the practice:

taking hundreds of million of dollars from taxpayers and employers to do nothing other than line the pockets of dispensing docs, dispensing companies, their investors, and their partners.

What does this mean for you?

Read the study here.

Send it to regulators, employers, policyholders, legislators, lobbyists, attorneys – anyone and everyone.  Get the word out.  

Feb
21

WCRI’s latest research says…

Posted by Joe Paduda on Thursday, February 21st, 2013 | Comments

 

The good folk at WCRI were kind enough to send me their latest CompScope research which covers workers’ comp cost drivers, components, the impact of regulatory changes, and trends in 16 states.

Needless to say, there’s a LOT there.  And I’d be ‘less than truthful’ if I said I’d read them all.  So, here’s what I gleaned from reviewing what I could in between working on client stuff.  The reports examined data from 2005/06 to 2010/11 for lost-time claims, providing insight into trends, the impact of regulatory reform, and changes in provider practice/billing patterns

  • Inpatient hospital payments per episode – a measure of price inflation – were up 36 percent on average over that period.  Remember, price is but one component of cost – others include intensity of services (e.g. using an MRI instead of an X-Ray) and utilization (how many MRIs per episode) plus the percentage of all claims that get that service (frequency).
  • Outpatient hopsital average payments per claim were up about 31 percent – but fewer claims used outpatient services…
  • The average payment per claim for hospital outpatient treatment/OR/recovery room services increased about 62 percent.
  • The variation in the use of opioids was striking.  17% of Louisiana claimants who started using opioids were still using them 3-6 months later, compared to about 3 percent in Arizona.
  • Less than a quarter of all long-term opioid users were tested for drugs via urine drug screening.
  • Surgical claims were pretty interesting.
    • Average payment for claim for major surgery (not including hospital providers) increased 27.6 percent; however there was essentially no change in the percentage of claims that had major surgery over the study period
    • However, utilization – the volume of services delivered to each claimant who did have surgery – was up about 10 percent.
    • So, we have price and utilization up, but not frequency (the percentage of claims that had surgery)

So, what does all this mean?

Well, surgical costs were driven more by utilization and price than frequency.  Outpatient hospital costs look to be all-but out of control. Clearly, payers need to do a much better job addressing these cost areas.

There’s wide variation in drug usage, indicating one-size-fits-all approaches probably will be too much in some areas and far too little in others.  Payers and their PBMs who understand regional differences will be better able to address this critical cost driver.

A good chunk of the research period was undoubtedly affected by the Great Recession.  Teasing out the impact of the recession will help drive deeper understanding in two ways; the impact of that most powerful of external factors, and structural drivers v macro drivers.

Feb
14

Variations in medical care – it happens in PT, too.

Posted by Joe Paduda on Thursday, February 14th, 2013 | Comments

There’s yet more evidence that treatment patterns vary significantly across providers.  Today’s evidence comes courtesy of two academic institutions and Medrisk, Inc. (consulting client) which reported significant differences in the type and duration of physical therapy provided to workers’ comp claimants.

The study looked at several variables contained in billing data: location of service, duration of care, type of care, and other data points; the data was case-mix adjusted.

There are several key takeaways:

  • corporate physical therapy centers billed for more visits and more units per episode than other practice settings.
  • there was a “large difference in treatment utilization between geographic regions regardless of practice setting, diagnosis, body-part treated or surgical intervention”
  • these corporate centers billed for “a lower proportion of physical agents indicating a greater use of those interventions supported by evidence-based guidelines (exercise and manual therapy) compared to other practice settings.”

These findings were consistent across diagnoses and after controlling for surgical v non-surgical cases.

Let’s look at the second takeaway.  It should come as no surprise that the type, volume, and delivery of medical care one gets varies a lot from region to region.  While one would like to think that the care we get is based on science, in many instances the care you receive depends more on where your provider was trained, the local standard of care, and the personal opinion of the treater than what has been scientifically proven to work.

That said, the final point – that treatment in line with evidence-based medical (EBM) guidelines is more common in corporate settings is…intriguing.

Increasing the use of treatments for workers comp claimants that are in line with evidence-based medical (EBM) guidelines is a primary goal of many payers, regulators, and other stakeholders; WCRI’s just-published review of state workers’ comp regulations provides ample evidence of this trend.  While there could well be reasons the use of treatments supported by EBM were more common in corporate-based settings, the discussion in the report appears to address some of the key factors; delay in initial treatment, severity, and acute v chronic status.

Let’s be sure to recognize that these findings are general, overall, and based on statistical analysis.  Undoubtedly there are clinic-based, private, facility-based, and other PT practices that are quite focused on EBM and rigorous in their application.  And, to reiterate, there may well be sound and valid reasons for the differences noted by the stdy authors.

What does this mean for you?

1.  Good to see research focused on this key area of workers’ comp; with 15 to 20 percent of medical dollars spent on physical medicine, the more we know, the better.

2.  Payers should talk to their network partners to find out what type of care their PT providers deliver.  If they don’t know, find a network that does.

Feb
12

Variation in hospital results – how to use the data

Posted by Joe Paduda on Tuesday, February 12th, 2013 | Comments

It has long been known that there’s wide variation in the type, quantity, and outcomes of medical care across providers.  A new report – research done by Dartmouth, and funded by the Robert Wood Johnson Foundation – looks at variations in re-admission rates among and between hospitals, and provides some striking insights.

The researchers used 2010 Medicare data; the overall results indicate one of eight surgical patients were readmitted within 30 days of discharge.  Non-surgical patients were readmitted more often; one out of six was back in within 30 days.

According to the report, the “issue of patients being readmitted to the hospital is considered important because many are avoidable and, as the report notes, can occur because of differences in patient health status; the quality of inpatient care, discharge planning, and care coordination; the availability and effectiveness of local primary care; and the threshold for admission in the area.” [emphasis added]

CMS recently began reducing reimbursement to hospitals with high levels of readmissions – which will make it really important for those hospitals.

So that’s kinda interesting, but not really. Here’s what’s really interesting.

The good folks at Dartmouth have published the re-admit rates for all hospitals, and you can download the spreadsheets.  Now before we go picking the best hospitals based only on their numbers, let’s look a little deeper.

Looking at two hospitals in my home state of CT, one can see the readmit rate for St Vincent’s in Bridgeport is much higher than Middlesex Hospital’s.  One answer may lie in the population; Bridgeport is a lower-income area than Middlesex, and likely has a much higher proportion of patients without adequate primary care and/or insurance.  Dartmouth provides some insight into this – 82% of patients discharged from Middlesex after congestive heart failure treatment saw a primary care provider compared to only 60 percent at St Vincent’s.

A couple other stats looked interesting; the data for surgical re-admits for UPMC facilities indicates they do a pretty good job keeping readmits down – and therefore overall quality is likely better than most (again this is just one data point).  Similarly, patients discharged after a heart attack from Geisinger’s Wyoming Valley facility have a high incidence of primary care follow up – compared to other facilities in PA (58 percent v 48 percent.  However, they’d be just above average in Wisconsin (54.4 percent).

What does this mean for you?

While there’s a LOT to digest here, I’d suggest one use would be for network direction.  Identify the hospitals with statistically better results, assess them for confounding factors, and think about how best you can direct patients/injured workers to those better-performing facilities.

 

 

Feb
5

What we nerds love…

Posted by Joe Paduda on Tuesday, February 5th, 2013 | Comments

is research that helps us understand why things are the way they are.

And while we rarely get to make out with supermodels like the guy in the SuperBowl ad (word is it took 45 takes to get it “right” (good for him!!),

Bar Rafaeli and…

we do get pretty excited about great research.  Which makes today a pretty good day.  Two studies were released – one from Washington on back surgery outcomes and complications and the other from CWCI discussing the use and cost of compound medications in worker’s comp.

First, Gary Franklin MD and colleagues published a study in the February edition of Health Services Research on the safety of lumbar fusion, an all-too-common procedure in workers’ comp.  Here’s my non-clinical take on the key findings.

  1. Outcomes  – defined for this study as complications within 90 days of a fusion – for workers’ comp patients were not nearly as bad as I thought they’d be. Surprisingly, they were somewhat better than the average!
  2. However – and it’s a BIG “however”, that may be due in part to the Washington state fund (L&I)’s tough stance on authorizing fusions.  In turn, that was based on priori research that indicated fusions had generally poor outcomes.  So, L&I’s numbers for outcomes may have been better because they do a good job of winnowing out those claimants more likely to have poor outcomes.
Pretty cool, eh? Gotta love the power of the monopolistic carrier.
Well, here’s some not-so-cool news.
Eileen Auen, CEO of PMSI and Alex Swedlow and his colleagues at CWCI have co-authored a study examining the cost and trends associated with compound medications in California. (disclosure – both are friends and I was a reviewer of the draft report)
And the results are about as appealing as Ms Rafaeli’s ad-mate.
For the blissfully-unaware, compound medications are concoctions of various real and pseudo-medications fabricated by parties evidently more interested in sucking money out of employers and taxpayers than healing patients.  There is precious little evidence supporting the use of these medications for the kinds of conditions suffered by workers’ comp claimants; nonetheless they are inordinately popular among a subset of providers.
California instituted controls on the use of compound meds 1/1/2012, the thinking being these “controls”would reduce compounds in comp.
The good news is compounds dropped from 3.1 percent to 2 percent of scripts.
The bad news is while there were fewer compounds dispensed, the cost of each went up over 68 percent, so compounds’ share of drug costs increased from 11.6 percent to 12.6 percent.
That’s right – fewer compounds cost more money.
How’d that happen?
Well, compound prescribers and dispensers quickly figured out how to game the “controls” by adding more ingredients and more of each ingredient to each compound.  
There it is, another example of unintended consequences.
What does this mean for you?
Unscrupulous providers will quickly figure out how to game regulations/controls that are not well-developed and carefully considered. Better to do something right than to do it quickly.
Feb
1

Work comp hospital costs – what WCRI’s report says, and what it means

Posted by Joe Paduda on Friday, February 1st, 2013 | Comments

The good folk at WCRI have produced a very useful – and very timely – analysis of outpatient facility costs, cost drivers, regulatory mechanisms, and trends in 20 key states.  Timely because the upcoming changes to Medicare and Medicaid’s hospital reimbursement bode ill for workers’ comp, and doubly timely because payers are seeing significant increases in facility costs in many states.

There’s a lot to consider in the study, here’s what struck me.

  • States without fee schedules are way more costly than those states that have outpatient facility fee schedules based on a fixed amount (not percentage-of-charges) reimbursement methodology.
  • States with percentage-of-charges “fee schedules” are about as costly as states with no fee schedules at all.
  • Even states with fee schedules based on a fixed reimbursement can be problematic; Illinois is a great example as it has the highest costs of all 20 study states.
  • Changing or modifying fee schedules appears to drive changes in billing patterns, which are supposed to be based on actual services delivered.

What stands out most is the overall trend.  Costs went up over the study period, sometimes a lot, other times there was an initial decrease after a fee schedule change went into effect after which an upward trend resumed.  And while some methodologies seem to do a better job controlling cost inflation than others, all can be gamed.

Cap reimbursement on a per-procedure basis, and watch utilization go up.

Base reimbursement on a lower percentage-of-charges, and miraculously charges escalate dramatically.

But start with low costs, and those low costs will likely persist; the ten lowest cost states in 2006 were still in the bottom half in 2010.  Yes, some had moved a notch and others down, but no state moved more than two slots.

What does this mean for you?

Watch FS changes in your key states very carefully, but don’t hold out much hope that any big changes will dramatically impact costs over the long term.

 

Jan
22

In workers’ comp, it’s the tail that’ll kill you

Posted by Joe Paduda on Tuesday, January 22nd, 2013 | Comments

More than 10% of workers comp medical costs are for claims more than 20 years old.

And that percentage may well increase.  That’s the finding from NCCI’s latest research, courtesy of Barry Lipton, John Robertson, and Dan Corro. There are a few striking findings well worth considering:

  • Diseases were the largest contributor to costs, followed by complications from medical care.
  • Drugs (38%), home health, implants/orthotics/prosthetics and other supplies make up 58% of costs compared to 16% of costs for claims less than 20 years after injury.  Notably, the authors predict that drug costs for today’s injuries 20 years out may well account for more than 50% of total spend.
  • About a quarter of drug costs were for opioids – drugs that are not indicated for musculoskeletal conditions.
There is a wealth of information in the report, information that should be carefully considered by any and all payers with a significant number of legacy claims.  And, those payers with claims that look like they may well be around in 20 years.
Here are my top four takeaways.
  1. How new claims are handled has a dramatic effect on where they are in 20 years. The vast majority of those claimants should probably NOT be on opioids; the fact that they are indicates a) they will likely never get off and b) the reason they are not closed is very likely because they are taking opioids.
  2. There are two very different types of home health/DME; the commodity-type for relatively young claims that need a cane crutch or wheelchair for a few days and the legacy claims that need a van, home mods, and nursing assistance forever. Huge implications that are NOT well understood by most vendors and buyers.
  3. Far too many claimants get far too much care in hospitals, when they may well be better served in a less-intensive inpatient facility.  Hospitals LOVE workers’ comp; it is very profitable and there are few controls on length of stay.  Payers would be well-served to figure out how to use less hospital care.
  4. Payers should also carefully examine medical records for patients suffering from complications due to medical care.  Poor medical care, lack of diligence on the part of treating providers, and flat-out malpractice are likely contributing to higher claim costs.
And kudos to NCCI for conducting this research.

 

Jan
17

Medical marijuana and workers’ comp. Seriously?

Posted by Joe Paduda on Thursday, January 17th, 2013 | Comments

I was chatting with Jennifer Wolf-Horesjh, Executive Director of IAIABC, this morning when the conversation turned to medical marijuana in workers comp.  I have no idea how we ended up there, but Jennifer is a great conversationalist and very well informed about everything work comp-related, so she’s on top of the issue (and pretty much everything else).

As luck would have it, IAIABC just completed a survey of states’ positions on work comp and medical marijuana.  A couple states have specifically banned the use of medical marijuana in worker’s comp treatment (Montana and Vermont), while others have administrative restrictions/requirements in place. Others allow it.  (Jennifer also told me about a recent court case wherein an insurer was required to pay for the marijuana growing equipment used by a claimant; if anyone has a record of that send it over and I’ll update the post. )

So, here’s the deal.  What logic would one use to approve the use of medical marijuana in workers’ comp?  There’s very little evidence that it is beneficial for most conditions for most people, although some anecdotal evidence that it works for a few. But just because a (very) few find relief from cannabis does not make it a viable medication – and one employers should be paying for – without careful scrutiny and ample evidence that it works for a specific claimant.

Alas, logic and workers’ comp aren’t often used in the same paragraph, so perhaps this is just another indication of how screwed up WC is.  As if we needed one.

There’s an excellent white paper on the topic from PBM myMatrixx as well as a webinar for your edification.  PMSI’s Jay Krueger has also authored a paper on the subject, and WorkCompInsider was an early reporter on the subject as well.  Oh, and in case you think you’ve heard it all, read Jon Coppelman’s piece on an idiot who a) got stoned and b) then went to feed bears in an animal park.

Dec
11

Comp medical costs on the rise

Posted by Joe Paduda on Tuesday, December 11th, 2012 | Comments

The latest report from WCRI shows medical costs in Indiana have been rising rapidly over the last few years, driven by facility cost increases.  This comes as no surprise, as facilities’ increasing leverage and ability to raise prices has been affecting comp in many states.

This comes on the heels of a similar report on Virginia and news of a significant rate jump in New Jersey, in large part due to increased medical trend.

Rates are up in the Sunshine State too, and yes, higher medical costs – facility and repackaged drugs – are the driver.

Over the last few years, medical inflation, as reported by NCCI has been pretty much under control.  It certainly looks as if those days are over.

What does this mean for you?

Time to dust off those medical management programs – and update them as well.  Because what worked back in the day will likely not work now.  If it did, you wouldn’t see these cost increases.

 

 

Nov
19

Comorbidities double workers’ comp claims costs

Posted by Joe Paduda on Monday, November 19th, 2012 | Comments

Claimants with comorbidities [health issues identified by the treating doc] cost a lot more than patients without.

That’s the conclusion of NCCI’s latest report, and a finding all workers’ comp stakeholders would do well to consider carefully – for several reasons.

1.  The percentage of working-age Americans with chronic conditions [e.g. asthma, hypertension, depression, diabetes, etc] is large and increasing.  According to the CDC, 27 percent of Americans are obese, 29 percent have hypertension, and 7 percent have diabetes.  All are substantially higher than a decade ago.

2.  NCCI’s analysis only included claimants where the WC treating physician coded and billed for a comorbidity.  Compared to the CDC figures, this occurred in about 10% of the patients who likely had comorbidities.

3.  The “growth rate of workers compensation claims with a comorbidity diagnosis is outpacing growth rates of the given conditions in the US population.” NCCI had a couple potential explanations for this trend; I’d suggest it is likely because many WC claimants:

a) don’t have health insurance;

b) their comorbidities are hampering their recovery from the occupational injury;

c) treating docs must address those comorbidities if there’s any chance of getting the claimant back to functionality; and

d) payers are paying for that treatment because it makes financial sense to do so.

One rather stunning finding – 81% of claims with diagnoses of obesity incurred lost time.

I’d be remiss if I didn’t note that the rollout of Obamacare will cover millions more claimants, thereby allowing work comp payers to send bills for non-occ conditions to the employee’s health insurer.  While some states continue to resist reform, there are others (e.g. Florida) that have decided to participate after all.

What does this mean for you?

Healthier workers = lower workers comp costs.