The VA’s been cooking the books

Richard Eskow of Sentinel Effect reports on the latest revelations about a bit of book-cooking at the VA. Seems the VA has been a bit, or perhaps more than a bit, overly positive about its record.
More troubling than boosterism is the allegation that the VA selectively reported results, and even fabricated conclusions to make the system appear better than it actually is.
As a fan of the VA, I’m concerned about two things.

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Desperate times, desperate measures

The largest health plan trade group wants to form a new agency to “compare the cost and effectiveness of medical treatments as part of a series of recommendations to reduce health care costs.” (California HealthLine from CongressDaily) At first blush that’s pretty similar to what the Agency for Health Care Research and Quality is doing today.

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Fee for service drives up surgery rates

Jason Shafrin reports on the link between physician compensation mechanisms and surgery rates.
Here’s the “money quote” –
“When specialists are paid through a fee-for-system (FFS) methodology rather than a capitation or salaried basis, surgery rates increase 155%. There is suggestive evidence that surgery rates fall when primary care physicians are paid on a fee-for-service basis compared to capitation or salaried payments.”
Not addressed is the key question – is the rate of surgery appropriate under either compensation mechanism?


Washington’s smart policy on opioids

The state of Washington is a monopolistic workers comp state; unless an employer is large enough to be self-insured, it has to buy workers comp insurance from the state itself.
As a monopolistic state, the regulators have even more power than in the highly regulated but non-monopolistic states. One area of particular interest is how the state deals with the WC drug formulary, which specifically excludes Actiq and Lyrica.
Washington’s Health Dept. just released new guidelines on the use of narcotic opioids; the guidelines, their development process, and the impact of same should be watched carefully by regulators, insurers, managed care firms and most of all prescribing physicians.

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URAC’s foray into pharmacy benefit management

URAC, the accreditation body that seems to be into every aspect of managed care, is now looking to certify PBMs. In a presentation at the PBMI conference in Phoenix last week, a representative provided an overview of the process, modules, timing and certification levels contemplated by URAC.
While the process is only for health lines today, URAC is seriously looking into accrediting WC PBMs
Brace yourselves.

Continue reading URAC’s foray into pharmacy benefit management


Actiq – the off-label poster child

Actiq is a narcotic taken in lollypop form, a technique that gets the drug to the pain centers quickly. Developed for break-through cancer pain, evidence now suggests that only 10% of Actiq users have cancer.The high-powered narcotic has been the subject of several recent reports and a state attorney general investigation concerning off-label use.

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my aching back

Controversy over treatment types, overly generous payments to physicians to endorse a product, lawsuits alleging faulty research, the FDA under fire for inadequate evaluation, fights over reimbursement for a new procedure, and confusion over the usefulness of a common and very expensive procedure.
If you want to know why the US health care system is so dysfunctional, I give you low back pain.

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Workers’ Comp – the answer to the spinal fusion question

Kudos to USAToday for publishing a pretty good article on variations in practice patterns related to back surgeries. In a front page story today, the paper that has been derided by some as “McNews” explores the issues surrounding the explosion in the number of spinal fusions.
The reporting is balanced, insightful, and thorough, a bit of a surprise coming from a paper that prides itself on short sentences, really short words, and lots of color, not depth and nuance.
Noted throughout the article is the primary problem – no one knows how many spinal fusions are the right number, and there is significant disagreement among stakeholders re when a patient should have surgery. (free registration required) That’s all true, and that’s where workers compensation comes in.

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Emergency department usage increases

There has been a substantial increase in the use of emergency departments in recent years. A new report from the Centers for Disease Control indicates the number of ED visits reached an all-time high of 114 million in 2003.
The increase was attributed to adults, and more specifically Medicaid recipients who used EDs four times as often as those with private insurance. One of the report’s editors noted that the ED has become the provider “of first resort” for many of the poor and uninsured.
With the present political wrangling over the future of Medicaid and the uninsured, this report points out one of the most troubling aspects of the “delivery systems” used by the poor. Care delivered through the ED is typically more expensive, time-consuming, and less coordinated than care delivered through a primary care provider. Tests and imaging are often duplicated, there are often problems with continuity of care, and patients with chronic conditions seek care for acute episodes in the ED rather than through their primary doc.
It is impossible to calculate exactly how much money is wasted in this process, but it is certainly in the billions of dollars.
Clearly the industry needs to do a better job of directing patients to appropriate levels and locations of care. Having been involved (albeit years ago) in a state Medicaid reform effort, I have some understanding of the problems involved. However, it is clear that the quality of care delivered is too low and the cost of that care is too high when it is provided at an emergency department.
What does this mean for you?
Redouble efforts to direct patients to primary care. Work with providers to set up streamlined primary care access next to the ED. Yes this is a big problem with lots of issues, but we can’t afford to not address it.


Private insurer profits

Bob Laszewski of Health Policy and Strategy Associates (no affiliation with HSA) notes that CMS’ latest health care cost report includes the following:
“in 2002, the percentage of health insurance premiums spent on profit and admin expense was 12.8%; in 2003, the expense and profit ratio had rised to 13.6%. Undoubtedly, this gain is not in expenses but in health insurance company profits.”
This occured at a time when overall health care costs were still increasing by almost 9% a year.
At the risk of stating the obvious, profits and admin expenses have increased at a rate greater than that of total medical expenses. Not only does this not say much for the “efficiency” of the private market, it also may add fuel to the argument againts private insurance.
We’ll have more details on the CMS report’s notable findings in a future post.