The Broken Disability Safety Net

Much has been said and written on the topic of the recent report from the US Department of Labor regarding the supposed inadequacy of the workers' compensation system.  Critics rightly point out that the report appears to reduce its own credibility by failing to exhibit a sufficient understanding of the system, by assuming that all people claiming to be disabled are actually disabled, and by frightening those who believe that the federal government's involvement in any endeavor dooms all of planet Earth to utter destruction.

To paraphrase Twain, though, reports of the death of the state-based work comp system have been greatly exaggerated.

Nevertheless, those who dismiss this report based solely on its well-deserved criticism are clearly missing the broader picture.  There is a fundamental problem in this country with disability management and the public safety net that supports it.  And when the public safety net is perceived as inadequate, the most politically expedient solutions are to neither generate revenue (i.e., raise taxes) nor to reduce expenses (i.e., cut benefits); rather, the first solution is to look for an exogenous entity to blame and from which, if luck prevails, to extract rent.  In this case, the federal government has found at least one scapegoat: workers' compensation.

And not without cause, mind you.  The relationship between work comp and Social Security Disability Insurance (SSDI) is ill-defined, but we know from an analysis of past and present "off-set payments" (wherein an individual receives payment from both work comp and SSDI) that of those currently receiving SSDI, a little over 12% of them have also received work comp payments.  While those payments are material (on the order of perhaps $10 billion of the total SSDI spend of $145 billion), this analysis fails to address the larger issue: how many SSDI recipients could have filed a work comp claim, but never did?  That's a much bigger number.

One alarming, but nonetheless informative, statistic regarding the SSDI population showed up in the May 2016 edition of Health Affairs.  If you've heard me speak on a blogger panel this summer or fall, you've heard me talk about this.  The graph below shows spending on opioids by the Medicare and Medicaid programs between 1999 and 2012.  The purple line should jump out at you... it represents opioid spending for the Medicare population that is under 65 years of age.

This is effectively the SSDI population (disabled people under 65 receive indemnity payments from SSDI and healthcare coverage from Medicare) and we're spending more than $1 billion of tax dollars per year on their opioids.  This group is about one-fifth the size of the over 65 cohort, yet we're spending more on opioids for them.  On a per person basis, opioid spend for those over 65 is $192 per year.  For the 45-65 cohort covered by Medicare (an approximation for SSDI), it's $683 per year... or nearly 4X more.  Interestingly, the opioid spend covered by private insurers for those aged 45-64 is $274/year and for Medicaid it's $251/year.  

So what the heck is wrong with the Medicare group aged 45-64?  They're disabled, that's what's wrong.  And there's the rub.  If you think it's difficult to track, measure, manage, and mitigate opioid use in work comp, it's comparably impossible today within the SSDI population.

A broken disability safety net is a dangerous political phenomenon - one we should take seriously and treat with the respect it deserves.  

Michael 

On Twitter @PRIUM1

ProPublica: Drug Seeking Irony

Say the name "ProPublica" in a work comp meeting these days and watch what happens.  It's like a pinata at a little kid's birthday party... everyone takes a swing, only a precious few actually connect (but when they do connect, we all get candy... or something like that).  Metaphors and Mondays don't always mix.

By way of brief background, ProPublica is an independent, non-profit news organization that focuses on investigative journalism.  "Journalism in the public interest" is their tagline.  Regardless of how you feel about the organization, they've done good work in the past and the pieces they publish deserve at least a glance, regardless of where you think the organization sits on the political spectrum.

Over the last year or so, ProPublica's Michael Grabell and NPR's Howard Berkes have teamed up for a memorable series of articles on the work comp industry.  I chose the word "memorable" carefully - the aim of this post isn't to offer my view of the work.  Topics ranged from the state politics surrounding system change to how much one's arm would be worth if one lost it in a work-related accident, from the wisdom of opt-out initiatives to the appropriateness of benefit levels.  These articles were the source of much conversation and the target of a great deal of criticism, much of it obviously emanating from our industry.
 
Another of ProPublica's efforts that made news over the last couple of years was the publication online of a trove of Medicare Part D data in the form of a searchable database.  Journalists have used this data to identify trends in prescribing patterns that might be newsworthy.  Public health officials have used the data to develop and support both policy initiatives as well as fundamental research. Doctors and health systems have used the data to measure how they stack up against other groups.

And guess who else uses the data?  That's right!  Opioid seekers aiming to identify doctors most likely to prescribe pills. 

First of all, this isn't ProPublica's fault.  Secondly, they rushed to both publish their own story on this phenomenon and add additional warnings to their site regarding the dangers of opioid misuse and abuse.  So this is obviously a simple case of unintended consequences.  And frankly, the benefits of having the prescription data made public still outweigh the risks of inappropriate use.  The database is neither good nor bad; it's use makes it so.  

But it does beg the question: How many of those "drug seekers" on the ProPublica web site are injured workers?  And how many of them went to the site initially to satiate their appetite for complaining about the work comp system... and ended up learning where they might be able to get more opioids?

Michael
On Twitter @PRIUM1