Managed Care MattersTime 2022-08-18 22:57:22
Web Name: Managed Care Matters
Insight, analysis & opinion from Joe PadudaShareTweetShareMail
is one of the most important papers WCRI has published in recent memory.
Authors Vennela Thumula PharmD and Sebastian Negrusa PhD have produced a comprehensive analysis of the subject, one every work comp manager, claims exec, regulator clinician and risk manager should have within easy reach.
Among the topics addressed are:How do you define behavioral health in the context of workers’ compensation?What are psychosocial factors and can they be a barrier to recovery following a work-related injury?How important is early screening for psychosocial factors and other mental health conditions?What non-medical and medical interventions exist to help those with behavioral health problems?
I’m working my way through the study; it has reinforced my belief that mental health/behavioral health issues/concerns are likely the primary barrier to recovery.
Chief among these are psychosocial factors that may impede recovery;poor recovery expectationsfear of pain\catastrophizingperceived injusticepessimismgeneral fearfulnessjob dissatisfactionlack of family/social support systems
Friend and colleague Bill Zachry has long noted that Adverse Childhood Events can be a key obstacle to recovery – in fact research indicates victims of abuse are more likely to be disabled during adulthood.
The paper also provides state-by-state details on coverage of mental stress and psychotherapy issues and the status of BH specialists as treating medical providers.
I’d be remiss if I didn’t note Carisk’s David Vittoria has been a persistent voice advocating for increased focus on BH issues. (Carisk is an HSA consulting client)
The study is free for WCRI members; there’s a nominal cost for non-members. Get yours here.
What does this mean for you?
Read this paper.ShareTweetShareMail
Storms are more intense and more frequent; so are droughts. Everywhere is getting hotter. When it comes, rainfall is more intense.
The direct impacts of climate change on workers’ comp are pretty obvious:higher risk for public safety workers;increasing heat exposure and associated risks for agriculture, construction, forestry and other “outside” workers;more infrastructure and construction work and associated payroll to rebuild and adapt
[Jeff Rush from California Joint Powers, Louisiana Work Comp Corporation’s Jill Leonard and I will be talking about climate change’s impact on workers’ comp at the National Comp Conference in Vegas) – mark your calendar for 12:30 on Thursday October 20.]
Thinking about this, there are both acute and chronic issues at hand; Fire, flood, and storm are acute events. This requires a crisis management approach; anticipate, prepare, triage, respond, recover.
Heat is different – it is chronic; unlike events it is pervasive, consistent, slowly increasing. This requires a more traditional risk management approach; assess, evaluate impacts, plan, educate, train, monitor, report, improve.
There are other hidden impacts, ones that payers would do well to think through.
For example…let’s use Hurricane Harvey which hit southeast Texas in 2017 causing $125 Billion in economic damage. As human-caused climate change increased Harvey’s severity by 30%; climate change’s added cost ran well into the tens of billions for that one storm alone. For a very detailed discussion of this see here.
photo credit CNN.com
Research published in the Harvard Business Review found:90% of businesses in the area surveyed by the researchers lost revenue due to Harvey;40% of businesses experienced property damage of whichover a a quarter were closed for a month, andone out of eight were closed for more than three months.
Think about the – 1/8th of businesses are closed for more than a quarter, a time when payroll is likely non-existent – or close to it.
No payroll, no premiums.
Well, you may say, insurance covered that.
Nope – only 15% of surveyed firms got a payment – of any kind – from insurance.
What does this mean for you?
The more you think about human-cause climate change, the more impact you find.ShareTweetShareMail
After too many months of doom-scrolling catastrophic weather events, rising inflation, ridiculously high medical costs, Russian fascism, social media wars over gender issues and elected officials that can’t seem to do anything but campaign for their next election, I’m starting to get just a little optimistic…
The economy…is doing pretty darn well. (Most of the below from Scott Galloway)Employment has risen every month this year and we added more than 500,000 jobs in JulyThe unemployment rate is near a 50-year low.Family spending – which accounts for 70% of the economy – has increased five of the last six months.Two out of three companies in the S&P three companies have beaten Wall Street’s revenue estimates, and three in four have beaten earnings estimates.According to one economist peoples’ fears are “completely at odds with the reality. I’ve never seen a disjunction between the data and the general vibe quite as large as I saw.”yeah, inflation…but it was lower in July than June, and gas prices are down 20% from their high earlier this year…
Congress is actually getting a LOT done.
The just-passed Inflation Reduction Act will:lower seniors’ drug costsIn 2023 Medicare recipients’ insulin co-payments are capped at $35 a month.In 2024, the 1.3 million recipients that qualify for “catastrophic coverage” benefit won’t have to pay 5% of the cost of every prescriptionIn 2025, out-of-pocket costs for drugs are capped at $2,000 annually.save a shipload of tax dollars by forcing drug companies to negotiate prices for Medicare recipients’ drugs
Oh, and the legislation also kept 13 million folks’ health insurance premiums affordable, which will keep more of us alive.
On the state level, it’s not just stupid waste-of-time caterwauling about gender issues… Colorado just passed bi-partisan legislation that “prevents hospitals or their collectors from initiating or pursuing debt collection from a patient if the hospital’s website was not in compliance with the Centers for Medicare and Medicaid Services (CMS)’ price transparency requirements at the time services were delivered”
Kudos to Colorado’s legislators for doing something Congress SHOULD HAVE DONE – put some damn sharp teeth in hospital price transparency legislation.
What does this mean for you?
Things are better than some would have you believe!ShareTweetShareMail
A just-released study shows people with health insurance are a little less likely to die than those without insurance.
That is not surprising; preventive care, access to medications to control diabetes, hypertension, depression, cancer and the like, and early diagnosis of potentially life-threatening diseases are all going to keep people alive longer.
From the study:
The study approach taken by the research team bypassed concerns raised against previous non-experimental research on this topic.
The outreach intervention was a joint project designed primarily by the Treasury Department’s Office of Tax Analysis, funded by the Department of Health and Human Services (HHS), and implemented by the IRS.
What does this mean for you?
Health insurance saves lives.
For workers’ comp, the implications are clear – workers who have health insurance are likely to be healthier than those without – and therefore more likely to recover from occupational injuries or illnesses.ShareTweetShareMail
Two seemingly-unrelated new items hit my news feed – Kaiser Permanente lost over a billion dollars last quarter, and Amazon paid $3.9 billion to buy One Medical, a primary care company.
Amazon is betting it can make primary care “work”, yet one of the best healthcare systems hasn’t been able to translate excellent primary care into lower costs.
Reality is, in the US primary care is (mostly) a money-loser.
One Medical, Amazon’s new purchase, has consistently lost money – a lot of money. That’s because reimbursement for primary care remains pretty low – despite Medicare’s move to increase pay.
We spend twice as much on healthcare as other developed countries, yet our outcomes, well…suck. One driver is likely access to primary care:High income countries spend 2 to 3 times more on primary care services than we do; United States as a proportion of their (14% of total health care expenditures vs. the US’ 5% to 8%)In those other countries primary care providers (PCPs) account for a substantially higher proportion of all practicing physicians; almost half of French physicians and a quarter of docs in the UK are PCPs compared to just one out of 8 in the United States.that last data point may be due to pay; family practice docs make less than half what orthopedic docs do.
Good primary care saves big bucks by reducing the need for specialty care – an economic impact that isn’t reflected in primary care reimbursement in the US. At least not in most reimbursement schemes; risk-taking, ACOs, risk share, and other variations are among the models that attempt to reward PCPs for effectively managing patient health.
Amazon’s move to buy One Medical comes on the heels of lots of other investments in primary care; what’s notable is how few have resulted in profits.
Can Amazon “fix” primary care?
Well, they’ll have to be a lot better than Kaiser Permanente.
KP is one of – if not the best – health care systems in the world, with excellent primary care and provider compensation that better reflects the value of primary care.
Yet KP lost over a billion dollars last quarter – and over $2 billion for the first half of 2022. Yes, a big chunk of the Q2 loss was due to investments, and there are extraneous factors – COVID-related mostly; Kaiser also has to pay orthopedic surgeons and other specialists a lot (increasing KP’s overall cost of care) because those docs could make much more outside KP.
Still, when one considers that Kaiser Permanente’s operating margins are generally pretty thin and certainly KP is less profitable than other health plans (UnitedHealth Group’s Q2 profits were up 19%) it shows just how difficult it is to make primary care “pay.”
What does this mean for you?
Pay more for primary care.ShareTweetShareMail
For the first time in about forever, big pharma lost.
One can’t overstate the impact of the-about-to-become-law Inflation Reduction Act on pharma. The most powerful lobbying force in Washington got steamrolled – with one major exception.
Medicare will now be able to negotiate drug prices, a change that will lead to massive savings for seniors (a group I will join next year) and taxpayers alike. This didn’t come without a last-ditch effort by a horde of suits invading the Senate and House…but for once, the invasion was turned back.
Medicare part D was a huge taxpayer gift to big pharma as it covered seniors’ drugs while not allowing Medicare to negotiate prices. This was a giant boondoggle; Christmas, birthdays, anniversary and graduation presents all rolled into one 20 year giveaway. (historians will note this was entirely driven by Republicans – and added $9.4 trillion to the ultimate Federal deficit)
Imagine if you could a) add a huge new market for your services/products and b) set your own prices…why…you could buy that baseball team you always wanted!
Well, at least the insulin manufacturers won. Republican senators blocked a provision which would have capped diabetics’ monthly insulin costs at $35.
1 out of 7 Americans that need insulin spend more than 40% of their income after food and housing on the drug.
What does this mean for you?
Just when you thought Washington couldn’t do anything – it does something really big and really important.ShareTweetShareMail
Over half a million jobs were filled in July, far exceeding expectations.
We have now recovered every job lost during the pandemic – a darn impressive record given inflation, higher interest rates – the unemployment rate now matches its 50 year low.
Things are looking pretty good, although people remain concerned about inflation. The good news there is fuel prices have dropped appreciably over the last few weeks, with gas prices falling 50 days in a row.
The result is a very mixed economic picture, although things seem to be trending in a positive direction on the inflation front.
What does this mean for you?
More jobs -> more payroll.ShareTweetShareMail
Today we’re doing a very quick recap of stuff we learned over the last couple of weeks…no opinion here (yeah that was really hard for me…)
Extra credit for identifying the man in the picture…
But first, for those of us perennially mad at ourselves because, well, we screw up and aren’t perfect, read this. Short take – perfectionism…
“…makes for a thin life, lived for what it isn’t rather than what it is. If you’re forever trying to make your life what you want it to be, you’re not really living the life you have.”
Make for great politics…even when all the caterwauling is wrong. The issue is what we – the consumer – pay is NOT what insurers, PBMs, and other payers pay.
That’s due to the “gross-to-net bubble”, a term popularized by the estimable Adam Fein Ph.D.
When rebates and discounts were factored in, brand-name drug prices declined—or grew slowly—in 2021.
So…you getting those rebate checks?
Remember the theory that COVID came from a Chinese lab? It is looking increasingly sketchy.
A comprehensive, detailed, and multi-factor analysis by scientists from four continents found
the emergence of SARS-CoV-2 occurred via the live wildlife trade in China, and show that the Huanan market was the epicenter of the COVID-19 pandemic.
The peer-reviewed research published in the journal Science covered molecular epidemiology and spatial and environmental analyses.
Investors and physician practices
Private equity investment in physician practices varies a lot by specialty and region. Quick takes…about 5% of physicians were in private equity-acquired practicesThe highest percentage was in D.C. (18.2%)More than one in ten docs in AZ, CT, FL, MD, and FL were in PE-acquired practices
The researchers wrote…
“Because some private equity acquisitions consolidate physician practices into larger organizations, geographic concentration of private equity penetration may be associated with reduced physician competition, which could lead to increased prices, [emphasis added]
An interactive map and the research report are here.
Gun makers earned over 1 Billion (with a B) dollars from sales of military-style assault weapons over the last decade. A report to Congress found:gun makers marketed to young men by claiming their weapons will put them “at the top of the testosterone food chain”…the weapons were described as an “apex predator”some ads for these weapons “mimic first-person shooter video games popular with children.”
The AR-15 is the most common of these weapons…the NRA named it “American’s Rifle” back in 2016. (and here I always thought it was Davy Crockett’s flintlock rifle…)
(disclosure – I hunt and have several rifles – none are semi-auto like the AR-15)
Workers’ comp physician fee schedules
…are all over the place…Louise Esola at Business Insurance reported on a recent WCRI analysis that found:
About one-quarter of the fee schedule states established their rates for office visits near the Medicare level or below, while about the same number of states set their fees for major surgery at triple the Medicare rates or more in each state…
The study – authored by Olesya Fomenko and Te-Chun Liu and up to date as of this spring – is here. (sorry for misspelling of Dr Fomenko’s name in earlier version…darn spellcheck!)
Clearly politics trumps policy…unless someone can tell us why it makes sense for Florida to pay docs below Medicare, while paying hospitals many times Medicare… I’ll stick to politics, campaign contributions, lazy legislators and hand-cuffed or ineffective regulators as the main driver of work comp fee schedules. (oops opinion inserted into post…just can’t stop myself)
Time to check in on how our Ukrainian friends are doing…
Last time we focused on strategy vs tactics…today we’ll cover why the Russians continue to do stupid stuff while the Ukrainians take full advantage of technology.
How who follow this closely know that the Russians are relying almost entirely on massive artillery barrages to level towns, cities, and villages before trying to push troops in. That was working, and Ukrainian forces were hard-pressed to withstand the bombardment.
From the Kyiv Independent: “artillery dominance compensates for the weak performance of Russia’s infantry.”
That was then.
It’s quite different now, mostly because A) NATO countries have sent hundreds of artillery tubes (think cannons) and dozens of rocket systems to Ukraine and B) Russian logistics are awful.
A – These NATO weapons are much more accurate and have greater range than most of the stuff the Russians are using.
This allows the Ukrainians to shoot from further away, reducing the risk from Russian “counter-battery fire” (radar can identify where the outgoing shells and rockets are coming from so the enemy can shoot back). The new weapons systems are also much more mobile; our HIMARS rocket systems can shoot and be gone in 2 minutes. (thank you American taxpayers!)
Since mid-June, Ukrainian artillery has become increasingly lethal and extremely effective. This from the Kyiv Independent.
On June 15, a massive explosion occurred near the city of Khrustalniy (formerly Krasniy Luch) in occupied Luhansk Oblast. Explosions continued for days. According to satellite images, the blasts created a destruction zone spanning some 500 meters around the epicenter. The site was one of Russia’s largest ammunition depots
July 2, Ukraine’s military published a video showing an enormous explosion at another large depot in the city of Popasna…Two days later, another devastating blast destroyed a large depot in the city of Snizhne. Three more depots were also hit in Donetsk.
Which leads us to B – Russian logistics.
Faithful readers will know Russian logistics – in English the process of supplying troops with fuel, munitions, water, spare parts, and equipment – is awful. They don’t use forklifts to move heavy stuff, but rely on manpower. They don’t have pallets, but rely on manpower. They don’t have enough trucks, so they rely on trains.
That’s why the Ukrainians have been able to destroy thousands of tons of Russian artillery shells and other munitions; the Russians move those munitions to giant storage depots, where people offload the shells and trucks transport the shells to the artillery locations.
It’s pretty easy to identify where trains are off-loading, and even easier to use a few artillery rounds to set off giant, days-long fireworks shows.
reportedly a large Russian ammo depot; actual video is here.
So, the Russians move the depots further from the front lines – out of range of most artillery.
Enter HIMARS – which has a range of almost 50 miles with current rockets – can hit pretty much any target inside Ukraine.
From Igal Levin, a Ukraine-born Israeli defense expert.
“…if all those forwarded bases, depots, repair facilities, all of the logistics chains are destroyed — [Russians] will have to deal with the need to bring supplies from beyond the Ural Mountains, then be thinking how to store and distribute them, how to bring munitions to artillery.”
Russia has a far larger army, exponentially more artillery weapons, and enough artillery rounds in storage to fight for decades.
They also have a wildly corrupt economy, where kleptocrats stole billions of rubles intended to feed, clothe, and equip soldiers.
Ukraine has a much smaller military – and had a history of corruption, albeit one that pales in comparison to Russia’s. Their troops – men and women – are way more motivated, fighting for their families and land, and increasingly well-supplied.
They are also very well led by commanders who have years of experience fighting the Russians in Crimea and the Donbas and are taking full advantage of Russia’s limitations and NATO largesse.
What do we need to do.
Keep the faith, people. Russia’s invasion of Ukraine is a major contributor to inflation, driving up fuel and food costs around the world. Yes this sucks, but our sacrifices are nothing compared to what Ukrainians are doing every minute of every day.
This too shall pass. When it does Putin and Russia will be far less dangerous, food and fuel prices will be much lower, and the world will be a way better place.
If you can, please help Ukrainians suffering from hunger, homelessness, injury and disease by donating to Care.ShareTweetShareMail
The work comp Pharmacy Benefit Management business has become hyper-competitive; total drug spend has dropped 6 of the last 7 years, there’s been massive consolidation of PBMs, margins are declining…all signs of a very mature industry.
Sounds like a not-very-attractive-business…right?
Well, due to accounting rules, PBMs are still wildly popular among work comp service companies.
They love PBMs because the companies get to count the cost of the drugs as well as their margins as top-line revenues – which makes those service companies look bigger than they really are.
The problem is…once you buy a PBM, you get a big one-time increase in revenue. But – and it’s a BIG but, unless you figure out how to grow that PBM revenue in a business that is declining, your top line flat-lines.
If you’re looking to sell your work comp service company, or otherwise tout strong financial performance, that is not a good look. Which brings me to a creative way a PBM is generating script volume without adding new payer customers.
Occ med clinic giant Concentra’s providers are writing scripts that direct the pharmacy filling the script to send it to Mitchell Pharmacy Solutions for administration. (I looked for a company link, but couldn’t locate any mention of Concentra’s OccuScript program on their website)
According to Concentra, the OccuScript program:has been in place for quite some time;is mostly – but by no means exclusively – used in states where physician dispensing is not allowed (e.g. Texas);appears to primarily address initial prescription fills which are mostly generics prescribed for a limited time;about one of every nine scripts written in the company’s 520 clinics and 120 onsite centers flows through the program. Mitchell is the current administrator, providing network access and the claim adjudication platform. To be clear, Mitchell does not use its own pharmacy network…they contract with Script Care.
Injured workers treated at this clinic may be – or more likely are not – covered by a payer that contracts with Mitchell. (Mitchell is one of several work comp PBMs – and far from the largest.) If it’s a Mitchell-contracted payer this form/process is helpful indeed.
In an email conversation with Concentra, the company noted “OccuScript supports medication compliance which is fundamental to evidence-based care delivery and positive patient outcomes.” (note Concentra stated in an email “We have national employer customers whose injured workers are never processed through the OccuScript program…(some payers instruct Concentra on how to process scripts for their injured workers.))
Medication compliance is important indeed, but there are several potential issues/concerns/problems if the injured worker is NOT covered by a Mitchell-contracted payer.The payer gets a bill from a non-contracted billing entity which adds a lot of work for claims adjusters who have to figure out what to do with it.Unlike scripts processed by the PBM contracted by the injured worker’s employer/insurer/TPA, the payer finds out about the script AFTER it is dispensed. The drug(s) actually dispensed may – or may not – be:duplicates of other scripts,contra-indicated due to other drugs prescribed for the injured worker (while prescribers are supposed to ask about other meds, many patients aren’t able to recall drugs they are taking), and/oran expensive version of the prescribed drug (there are literally dozens of companies making ibuprofen, many at different prices for the same pill; contracted PBMs control for this with MAC lists.)The injured worker’s payer/employer/insurer is usually billed at a rate that is higher than their contracted PBM price – sometimes MUCH higher…driving up the employer’s/insurer’s/taxpayer’s work comp costs.Concentra’s OccuScript contracts with Mitchell who in turn contracts with Script Care…all of whom have to get paid,and adding communication challenges as issues have to pass through several entities.
So what to do?
Concentra avers it is ready and willing to work with payers and employers to route scripts to their PBM. It is also interested in working with PBMs. Sure, most “first fills” are “one and done”…but many are not. Getting on the claim as quickly as possible is an industry-wide best practice.
Note – Concentra execs were quite responsive to my queries about the program; kudos to CEO Keith Newton and Charles Bavier – who runs Concentra’s OccuScript program – for jumping on this.
What does this mean for you?
If you aren’t a Mitchell Pharmacy Solutions customer, get with Concentra ASAP to get those scripts routed to your PBM.
For those unfamiliar with this space…Insurers and TPAs hire Pharmacy Benefit Managers (PBMs) to ensure injured workers get the medications they need to recover and return to work. PBMs contract with pharmacies, operate call centers and employ pharmacists – all in an effort to deliver the right drug at the lowest possible price.
Joe Paduda is the principal of Health Strategy AssociatesFollow @paduda
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