Tag Archives: health benefit

Unnecessary Surgery: When Will It End?

Unnecessary surgery: When is it going to end? Not any time soon, unless a documented and proven approach is used by health benefit plan sponsors.

I began my healthcare career 35 years ago when, as a graduate student at Columbia University School of Public Health, I was awarded a full scholarship as a public health intern at Cornell Medical College in New York City. Dr. Eugene McCarthy at Cornell was the medical director of a Taft-Hartley joint union/management health benefits self-administered fund at the time and my mentor. I worked on the Building Service 32 B-J Health Fund, which was the focus of an eight-year study sponsored by the then-Department of Health, Education and Welfare (now Health and Human Services, or HHS) and which was the first study on second surgical opinions.

The study (1972-1980) followed union members and their families who were told they needed elective surgery and documented that roughly 30% of recommended surgeries turned out to be medically unnecessary. The study found 12 surgeries that generated the most second opinions that didn’t confirm the original diagnosis. This list comprises: back surgery, bone surgery and bunions of the foot, cataract removal, cholecystectomy, coronary bypass, hysterectomy, knee surgery, mastectomy, prostatectomy, hip surgery, repair of deviated septum and tonsillectomy.

What has changed on this list 35 years later? Very little, if anything.

USA Today on March 12, 2013, reported on a study that found that; “tens of thousands of times each year patients undergo surgery they don’t need.” After the release of this study, a former surgeon and professor at the Harvard School of Public Health stated that: “It is a very serious issue, and there really hasn’t been much movement to address it.”

A CNN special on March 10, 2013, reported that the U.S. spent $2.7 trillion on healthcare per year and that 30%, or roughly $800 billion, was wasted on care that did not improve outcomes. Sound familiar? The Cornell study said the same thing 31 years earlier.

Public and private employers, health, disability and workers’ comp insurers and state and federal programs such as Medicare and Medicaid are doing very little, if anything, to effectively address this problem. The solution to preventing unnecessary care and surgery is not in raising co-pays and deductibles and other out of pocket costs unless they are tied to consumer education and well-designed second-opinion programs.

In response to the USA Today article, a leading medical expert said, “You can shop for a toaster better than prostate surgery, because we don’t give patients enough information.” Another leading surgeon stated; “Far too many patients are having surgeries they don’t need, with associated major and severe complications such as long-term disability and even death.” Furthermore, “I see patients with neck and back problems, and at least 1/3 are scheduled for operations they don’t need, with no clinical findings except pain.”

What is the principal focus of today’s multibillion-dollar managed care industry, especially in workers’ compensation? Provider discounts, that’s what. But how is it a savings if the patient receives a discount on an operation he doesn’t need?

Most often, when I ask that question I am met with blank stares.

The New England Journal of Medicine in 2009 stated that a common knee surgery for osteoarthritis “isn’t effective in treating patients with moderate to severe forms of the disease.” Yet, according to federal researchers, 985,000 Americans have arthroscopic knee surgery each year, and 33% (more than 300,000) are for osteoarthritis “despite overwhelming medical evidence that arthroscopic surgery is not effective therapy for advanced osteoarthritis of the knee.”

According to the chairman of cardiovascular medicine at the world-renowned Cleveland Clinic, the U.S. health system is “doing a lot of heart procedures that people don’t need.” For example, angioplasty stent surgery in heart patients will likely relieve pain but “will not help a person live longer and will not protect against having another heart attack… What’s worse is that many of these surgeries will lead to bad outcomes.” He said, “This procedure should be performed for patients having a heart attack, but 95% of patients who have angioplasty surgery are not the result of a heart attack.”

The estimate on the direct medical costs to American businesses for low back pain is $90 billion a year; this doesn’t include workers’ compensation indemnity and litigation costs, disability costs, sick days and indirect costs such as lost productivity. As reported in my previous article, The Truth about Treating Low Back Pain, the Journal of the American Medical Association (JAMA) estimated that 40% of initial back surgeries, which amounts to more than 80,000 patients per year, have “failed back surgeries.” These unsuccessful back surgeries most often lead to a lifetime of debilitating back pain and billions more in long-term disability and Social Security Disability Insurance (SSDI) costs. These patients — four out of every 10 — all wish they had received a second opinion now. Yet when I recommended a second-opinion program to a union health fund in New Jersey, the manager said: “I am not going to tell my union members they need to get a second opinion.” True story.

Although we were scheduled to have an informal lunch meeting, after I recommended the fund consider a second-opinion program the “lunch” part of the meeting disappeared, even though I had driven two hours to get there. Maybe that is where the expression there is “no such thing as a free lunch” comes from? The health fund manager was downright indignant about my suggestion even though the first-second opinion program was conducted on behalf of a union health fund and was overwhelmingly successful.

He did describe, however, how upset he was about the fund’s rising healthcare costs. I guess he just wanted to be able to complain about it instead of actually doing something about it on behalf of his members. (The president of the union confided in me afterward that he had failed back surgery many years ago and wished he had gone for a second opinion.)

A colleague of my mine who is a senior vice president of product development for a leading third-party administrator (TPA) confided that insurance companies and TPAs will not implement programs that I could design and implement for their clients because they would never admit it was a good idea, given that they didn’t invent it.

I also hear all the time from so-called experts that second surgical opinions don’t work and don’t save money.

But large self-insured employers and health, disability and workers’ comp insurers should follow the lead of the top sports teams who send their top athletes for second opinions all the time to places like the Hospital for Special Surgery (HHS) and New York-Presbyterian Hospital/Columbia Medical Center in Manhattan or UCLA Medical Center in Los Angeles.

When I send client employees or friends and neighbors for second opinions, they often tell me that their appointment was with the same doctor Tiger Woods or Derek Jeter went to. My response is, “exactly.” Very often, conservative treatment is recommended and produces great patient outcomes, especially for back injuries and diagnoses for conditions like carpal tunnel syndrome. (See Carpal Tunnel Syndrome: It’s Time to Explode the Myth.)

Most, if not all, top surgeons I have met welcome second opinions for their patients because, when surgery is recommended, they want their patients to be assured that another expert also believes it is in their best interests.

I interned at the first second-surgical opinion in the country. I wrote my master’s thesis at Columbia on what I learned and how to improve upon the design and administration of the very successful Cornell program. Although the phrase, “I want a second opinion,” is now common terminology in America from auto repair to surgery, it has not reduced the overall amount of unnecessary surgery. If your program is not successful or not saving money it is because there is a serious flaw in the design and administration.

What I have documented since I designed or administered the first corporate second-opinion benefit programs back in the early 1980s are several key components of a successful program. First, it must be mandatory for the plan member to receive a second opinion for selected elective surgeries. Remember, elective surgery, by definition, means scheduled in advance, not for life-threatening conditions. Second, the second-opinion physician must not be associated with the physician recommending surgery. The physician must truly be an independent board-certified expert. Third, the second-opinion physician cannot perform the surgery; this provision removes any conflict of interest.

In addition, although a plan member should be required to receive a second opinion to receive full benefits under the health plan, the decision on whether to have surgery is entirely up to the patient. The whole idea is to educate the patient on the pros and cons of proposed surgery and the potential benefits for non-surgical treatment or different type of surgery (lumpectomy vs total mastectomy, for example). (I also developed a process of administrative deferrals for instances when it would be impractical to obtain a second opinion or when the conditions were so overwhelming that the need for a second opinion could be waived.)

It is only by helping to make patients truly informed consumers of healthcare and educating them on the benefits of alternative surgical treatments that a program can be successful. Voluntary programs simply don’t work. Rarely do patients seek second opinions on their own, and most often do not know where to obtain and arrange for a top-notch second opinion. In addition, they often feel uncomfortable and do not want to tell their physician they are seeking a second opinion. That is why I found that a program only really works when patients can state that their “health plan requires that I get a second opinion.” The mandatory approach reduces unnecessary surgery dramatically and saves the plan sponsor money with at least 10:1 return on investment.

The most amazing reduction of unnecessary surgery and resulting savings to the plan sponsor comes simply by implementing and communicating the benefits and requirements of the program design that I outlined above. The reason is known as the “Sentinel Effect.” What the original Cornell study and others have documented is at least a 10% reduction in the amount of recommended elective surgery simply from announcing the program is now in effect. No need for an actual second opinion; merely require one!

Now that is cost-effective!

Healthcare Reform’s Effects on Workers’ Compensation

Since its passage in 2010, the Affordable Care Act (ACA) — commonly referred to as healthcare reform — has been the subject of intense political debate and a source of anxiety for many employers. Although most employers have focused on the law’s health benefit requirements, the ACA is also expected to affect how they manage their workers’ compensation costs. Employers should understand how reform will affect the quality of care available to their employees, the calculation of workers’ compensation premiums and claims filings — and what employers can do to manage those effects.

Workers’ Health Proponents of the ACA say it will lead to a healthier society. Because more people will have access to healthcare, advocates say, there will be a reduction in comorbidities — additional diseases or disorders that individual patients often have along with a primary disease or conditions. For example, diabetes and hypertension are typical comorbid conditions of obesity. These comorbidities can frequently complicate workers’ compensation claims. Consider that a California Workers’ Compensation Institute analysis of claims from 2005 to 2010 found that average benefit payments on claims for employees with obesity as a comorbidity were 81% higher than those without. There is, however, no significant evidence to support the contention that an employee is less likely to file a workers’ compensation claim simply because the employee is insured. For example:

  • A recent Assured Research study examining health insurance penetration rates and workers’ compensation loss ratios in individual states from 1999 to 2011 showed little correlation between the two measures.
  • Data from the Centers for Disease Control and Prevention indicate that heart disease remains the leading cause of death in the U.S. and that the percentage of Americans with a high body mass index has steadily climbed over the last 50 years — two trends that are not confined to the uninsured population.

Cost Shifting Employers have long been concerned that injuries from non-work-related causes will be shifted to workers’ compensation. Doing so is tempting because of workers’ compensation’s combination of higher reimbursement rates for medical providers and lack of deductibles and copayments for employees. There is significant evidence to show that treatment for the same diagnosis costs more under workers’ compensation than under group health insurance because of higher reimbursement rates and greater utilization of services. A recent Workers’ Compensation Research Institute study of 16 large states, for example, showed that workers’ compensation payments for shoulder surgeries were often significantly higher than group health medical payments for the same procedure. Some have speculated that the greater access to health insurance promised by the ACA will reduce this shift to workers’ compensation. However, it has become clear that the law will not result in all Americans having health insurance coverage. With the ACA requiring that employers offer coverage to all employees working 30 or more hours per week starting in 2015, one in 10 large companies are planning to cut back on hours for at least a portion of their workforce, according to Mercer’s National Survey of Employer-Sponsored Health Plans 2013. Other employers are using higher copayments and deductibles to help offset cost increases. It appears, therefore, that the financial incentive for employees to shift treatment toward workers’ compensation will continue under the ACA.

Access to Care Probably the most predictable outcome of the ACA is that it will increase the number of individuals in the U.S. with health insurance coverage. Despite the potential benefits, this could put additional stress on a health are system that is already short on doctors. Among the 34 member nations of the Organisation for Economic Co-Operation and Development, the U.S. ranks 27th in physicians per capita (see Figure 1). And this problem does not appear to be going away: The Association of American Medical Colleges forecasts that physician demand will dramatically outpace supply over the next decade, leading to a shortage of more than 90,000 physicians in the U.S. in 2020. This is particularly troubling as it relates to specialists — for example, orthopedic surgeons — and the potential for delays in obtaining diagnostic tests and scheduling elective surgeries and other procedures. Longer periods of disability and complications as a result of such delays would ultimately drive workers’ compensation costs up. With this added pressure on a limited number of medical providers, it becomes more important than ever for employers to develop medical networks that focus on quality of care and outcomes — even if it means paying more on a fee-for-service basis. Employers that pay their medical providers fairly and quickly will have more timely access for their injured workers and should ultimately have lower workers’ compensation costs.

Standards of Care Traditionally, the healthcare industry’s focus has been on volume; more patient admissions, tests and procedures translated to higher revenues. Post-reform, however, the industry has shifted its focus to improving standards of care and achieving better patient outcomes. If this transition results in less emphasis on costly procedures, which often produce questionable results, workers’ compensation costs could be reduced. Although it remains to be seen whether the standards of care developed under the ACA for group healthcare would be enforced under workers’ compensation, this is a promising development for employers.

Premium Refunds The ACA provides for insurers to rebate premiums to employers that have better than expected performance with their healthcare programs. Employers can either refund such premiums back to their workers or use them to offset future premiums. The National Council on Compensation Insurance (NCCI) has indicated that if premium refunds are given to employees, this would be considered payroll under workers’ compensation premium calculations. In other words, having a good performance on its group health program could increase an employer’s workers’ compensation program costs because premium calculations are tied to payroll. Employers should keep this in mind when deciding what to do with healthcare premium rebates that may be received.

Managing the Effects of Healthcare Reform There is little doubt that healthcare reform will have an impact on workers’ compensation costs and claim trends. And while the extent will not be known until the ACA has been fully implemented, employers can take steps now to lessen any potential negative impacts, and increase the value of the positives. For example, employers should:

  • Increase efforts to identify medical providers that can provide the best quality care for injured workers and take the necessary steps to ensure the workforce has access to these providers.
  • Carefully manage the approach to healthcare premium rebates, which could affect how payroll is calculated under workers’ compensation.
  • Closely monitor any shifts in injury claims to workers’ compensation. Despite the ACA’s promise of greater access to health insurance coverage, there remains a financial incentive for employees to seek treatment under workers’ compensation rather than group health.
  • Remain committed to loss-control efforts. Don’t let concerns over the ACA cause a loss of focus on this key area.