Friday, April 8, 2016

The Customer

A lot of effort and expense goes into controlling medical costs in workers' compensation, but savvy vendors seem to always find a way around those controls.

The Workers' Compensation Research Institute's latest study on physician dispensed medication reflects this "whack a mole" phenomenon.

The conclusion: vendors steer around fee schedule limits with odd-sized dosages that aren't scheduled ... yet.

“When prices are reduced by regulation, the regulated parties — in this case physician dispensers — sometimes find new ways to retain the higher revenues they had prior to the reforms,” Dr. John Ruser, president and chief executive officer of WCRI, said in a press release. “The results raise questions about the effectiveness and sustainability of the price-focused reforms.”

In California, for example, the average price paid to physicians for 5- or 10-milligram pills of muscle relaxant cyclobenzaprine was about 39 cents per pill in early 2014. But a new 7.5-milligram product, introduced in 2012, cost $3.01 per pill.

As of early 2014, the 7.5-milligram cyclobenzaprine pills accounted for 55% of drugs dispensed by physicians in California, compared to only 2% of drugs dispensed by pharmacies in workers’ compensation claims.

In Tennessee, as of August 2012, reimbursement of physician-dispensed repackaged drugs is based on the average wholesale price of the original drug product, with no added dispensing fee. The intent is to curtail repackagers’ practice of giving drugs their own national drug codes and often-inflated AWPs.

So instead, vendors changed the dosage. Before the reform, 91% of physician-dispensed cyclobenzaprine was in 10-milligram pills; by early 2014, that had dropped to 76% and prescribing of 7.5-milligram pills grew to 19%. The 7.5 milligram pills cost $3.97 each at that time, while the 10-milligram pills were $1.08.

There's many different opinions on the topic, and frankly I don't see any reason for physician dispensing on a regular basis for lengthy periods a valid practice whatsoever. Most people have a pharmacy reasonably close, and for those that don't there are mail order pharmacies.

But that's not the point of this rant.

In work comp we tend to focus on the "problem" to look for a solution - hence proposed formularies, or banning of physician dispensing - rather than perhaps more simple, and likely effective, strategies.

This is tied to the way we perceive and treat the person at the receiving end of benefits: the injured worker.

If you are a consumer of nearly anything you have an interest in what you are consuming: what it is, how it is delivered, how much it costs, and whether there are better (however you define "better") alternatives.

Not in workers' compensation. The consumer of the goods and services is left out of the equation. There is no decision power with the injured worker, and even less information and education.

It's cultural - for so long, because the injured worker has no financial stake in the goods and services provided, since work comp is a zero dollar system, it's assumed that there's no need for consumer engagement.

That's wrong.

We need to change our thinking. The injured worker is our CUSTOMER. And the CUSTOMER needs to be informed, and engaged, at all stages, and not with legal mumbo jumbo as required by various state laws (and which causes confusion and a call to the attorney), but with clear, concise explanations of what is being paid to whom, for what and when ... and with comparison to less expensive, potentially better alternatives.

Medicare does this. When I got a doctor's bill for services for Mom, it would be followed up with a Medicare statement of all of the benefits reviewed, paid for, and whether there is any further obligation on behalf of Mom.

We don't do that in work comp. The Explanation of Benefits is rarely, if ever, copied to the CUSTOMER, and if it is, it's confusing and not self-explanatory.

There are many other examples. The injured worker is treated as a non-participating beneficiary and kept in an information void; when in reality the injured worker is the industry's first line of defense against unethical vendor behavior.

Treat the injured worker like a CUSTOMER, like a GOOD CUSTOMER, like a CUSTOMER you want to return for future business (I know, in reality you don't want that customer back because that means another injury...). Good customers return the favor. They look out for their favorite merchants and will return favor if asked.

Tweak all the fee schedules and implement all the formularies you want - but if this industry wants to combat the "whack a mole" phenomenon then engage the CUSTOMER.

1 comment:

  1. WCRI is an ALEC propaganda machine used in the war against injured workers and our grand bargain. Just take a look at their board members. They are the who's who of the ALEC group. Many of their board members are the ones responsible for the war on injured workers and our grand bargain. They are not impartial. Their board members are the ones responsible for the war on the injured workers. Walmarts, Lowe’s, Safeway and Nordstrom Are Bankrolling a Nationwide Campaign to Gut Workers’ Comp
    Impartial? When their mostly members of the group named ALEC? I think not.

    Just take a look at who their board members are, their agenda is the same as ALEC's, to demolish workers compensation.

    WCRI Board of Directors
    Vincent Armentano, Chair The Travelers Companies, Inc.
    Janine M. Kral, Vice Chair Nordstrom, Inc.
    Shelley Boyce, Vice Chair MedRisk, Inc.
    Barbara Sandelands, Treasurer Chubb & Son, a division of Federal Insurance Company
    Keith T. Bateman Property Casualty Insurers Association of America
    Darrell Brown Sedgwick Claims Management Services, Inc.
    Cristina D. Dobleman Stanford University
    Vince Donnelly The PMA Insurance Group
    Mike Fenlon United Parcel Service
    Peter D. McCarron Zurich North America
    Pete McPartland Sentry Insurance
    Thomas Nowak AIG
    Steve Perroots Marriott International, Inc.
    Tracy A. Ryan Liberty Mutual Group
    Srivatsan Sridharan Gallagher Bassett Services, Inc.
    Jon E. Stewart Kentucky Employers' Mutual Insurance
    David Stills Wal-Mart Stores, Inc.
    Jose Vasquez ESIS, Inc.
    Joseph Wells The Hartford Insurance Group

    How can any injured worker trust their research, when their backed by ALEC and its agenda against their interest? All in the name of corporate profits over the health and well being of the workers.

    If you do not believe me about ALEC and its war on the injured workers? Then listen to what the WILG lawyers are saying about ALEC. What WILG is Doing for Workers’ Compensation

    ALEC Backed organizations and their members, are not folks to be trusted, nor is any of their research that is tainted.