The FDA announced today that Pfizer’s Celebrex significantly increases the risk of cardiovascular problems. What does this have to do with Workers’ Comp?
A lot.
Celebrex, approved by the FDA for treatment of arthritis, has been one of the most popular drugs for treatment of musculo-skeletal injuries common in workers’ comp. Now, those patients who have been treated with Celebrex for a workers comp condition may find themselves with a heart condition, and that heart condition may be due in part to Celebrex.
While attorneys, researchers, and others argue over the causality issues, adjusters, insurers, and reinsurers will find themselves faced with claims for heart problems from patients with bad knees. Unfortunately, there does seem to be a strong linkage between Celebrex and cardiovascular problems, and these problems may not be limited to Celebrex and Vioxx…
“”We do have great concern about this product and the class of products,” said acting FDA Commissioner Lester Crawford. “ Commissioner Crawford’s concerns arise from the FDA’s analysis of the study, which indicates:
“800 milligrams of Celebrex had 3.4 times greater risk of cardiovascular problems compared to a placebo. For patients in the trial taking 400 milligrams the risk was 2.5 times greater.”
The good news is the marginally better outcomes delivered by these medications was far outweighed by their additional cost. Now, physicians can return to prescribing naproxyn, Tylenol, and ibuprofen for these conditions. Leaving aside the point that the docs should have been doing this all along, perhaps the tragedy (financial and personal) that has been and will be caused by these two over-hyped and under-researched drugs will lead doctors to practice more conservative prescribing behavior.
After all, the docs who wrote the scripts may have some liability as well…

The recent disclosures related to Vioxx’ impact on cardiovascular disease should be raising some big concerns amongst financial folk at WC payers. Here’s why.
Vioxx was commonly used to treat musculoskeletal injuries – sprains, strains, and the like. These happen to be very common WC injuries, and thus lots of WC claimants received scripts for Vioxx.
The law in most states holds that WC is liable for treatments for conditions arising from occupational illness or injury. This has been consistently intrepreted to include liability for conditions arising from the treatment itself – whether that be pain meds after surgery, PT after surgery, Viagra to combat the ill effects of other meds, etc.
The implications of Vioxx for WC are thus obvious. WC payers are potentially liable for cardiovascular conditions for WC claimants who have incurred cardiovascular conditions, and especially those claimants who had CVD prior to receiving Vioxx.
While WC payers have the right to subrogate those claims back against Merck (manufacturer of Vioxx), this will be a long, messy, and expensive process.

Coventry’s acquisition of First Health represents a critical point for the WC managed care business.
As the market leader with some $190 million in annual revenues in WC bill review and network services, FH has long been a strong, and somewhat self-possessed, “vendor”. Carriers and TPAs have found FH to be inflexible, and in some cases dictatorial, regarding terms, conditions, pricing, and services. Some are hoping that the new management will adopt a more “customer-friendly” approach. Early reports from FH customers are that their FH contacts and account managers are saying the right things, but have no in-depth information about Coventry’s future plans for Workers Comp.
Coventry’s latest presentation may shed a little light on this issue. In it, Coventry notes the growth opportunities inherent in WC, the strong “bench strength” of FH WC management, strong growth opportunity in WC (mid teens to low twenty percent range), and potential for reform-driven growth.
I am highly skeptical. FH has, if not poisoned the waters with the market, at least rendered them highly distasteful. Their product offerings are primarily a large, deep discount network and a bill review system that they do not own nor effectively manage. Many payers, facing rising medical costs despite their long relationship with FH, are looking elsewhere for the next generation of managed care.
In the final analysis, Coventry’s future in WC will depend as much on the analysts’ opinions, and therefore the stock price, as anything. If analysts see no synergies, Coventry may decide to “pursue other options” with the WC assets.

The Workers’ Compensation Research Institute is one of the leading research organizations focused on WC. Their annual conference in Cambridge MA just concluded, and once again WCRI produced some interesting and thought-provoking studies.
This year’s conference used a slightly different format, focusing on individual states rather than comparing several, or many, states in a single presentation. Stakeholders from TX, TN, and CA presented after summary data presentations by WCRI staff.
Here’s the highlights as I saw them.
1. Drs. Peter Barth and David Neumark discussed the impact of Provider Choice on Costs and Outcomes. Interesting findings included:
— Costs were lower, and outcomes better, when the employer chose the provider, than when the injured worker chose a provider they had not previously seen.
–When an injured worker chose to use a provider they had previously seen, costs and outcomes were equivalent to those delivered by the employer-selected provider.
–The “new provider”‘s outcomes and costs were significantly worse.
2. The CompScope 4th edition was previewed; this is a summary of medical costs, disability duration, benefit amounts and other outcomes for lost time claims (and others, but we’ll only discuss LT claims) in 12 states. Items of note include:
–Of late, medical costs have been growing rapidly; with costs in all but 3 of the 12 states increasing by more than 10% from 01/02 to 02/03. California saw the highest increase at about 17%. Considering that CA is the largest WC state, that is a truly frightening number.
–There appears to be a strong correlation between medical costs and medical cost containment expenses, with most states favored by low medical costs also enjoying low cost containment expense, and high cost states also burdened by high cost containment expenses. My take is this may be heavily influenced by the percentage of savings model used in PPO deals; the higher the medical costs, the greater the “discounts”; the greater the discounts, the larger the PPO fees; and thus the greater the “cost containment expense”.
So, the higher the medical expense, the more money the deep-discount, percentage-of-savings PPOs make. Interesting incentives…
3. Disability duration factors – Worker age, education level, part-time and/or seasonal workers, and employee-supervisor trust factor were all key factors influencing disability duration. Workers over 60 had much worse return-to-work results than younger workers. There was also wide variation among states, with Texas hampered by RTW rates substantially lower than the median. Regarding education, workers with high school diplomas returned to work much sooner than drop-outs.
The full CompScope 4th edition will be available from WCRI in 2005; while somewhat weighty, it is a “must-read” for managers and executives involved in WC.
Underwriters should also pay close attention to the report; there are a wealth of “indicators” that the insightful underwriter can use to better select, and de-select, risks.