Do ambulatory surgery center owners do more surgery? If so, is that bad?

What are the implications for workers' comp?

On an anecdotal level, I recently had minor hand surgery at an ASC. The facility was incredibly efficient, with far less bureaucracy than I had experienced with even more minor procedures in a hospital setting.

In looking at the list of the doctors who own the facility and who practice there, I noted that many of the top orthopedic surgeons in the area were participants. Many of these are docs whose integrity and clinical judgment I greatly respect.

But a recently released study by the Workers' Compensation Research Institute of Cambridge, Mass. attempts to document a pattern of increased surgical utilization by owners of the centers.

Time will tell whether the statistical research done by WCRI on these issues holds up. The data studied was from Florida during 1997 to 2004, focusing on arthroscopies and carpal tunnel surgeries.

The study begins by noting that:
"Some studies have found that surgeon owners of ASCs perform more surgeries than surgeons who are not owners (e.g., Mitchell, 2010; Hollingsworth et al., 2010; Gabel et al., 2008; Lynk and Longley, 2002). These studies raise a concern about potential conflicts of interest that may influence treatment decisions and be inconsistent with high priority national goals of containing the rising costs of medical care while maintaining quality care."

The study, by Christine A. Yee points out that:
"In 2011, legislation was passed in California prohibiting doctors who own many kinds of medical businesses from referring their workers’ compensation patients to those businesses, or from using products from those businesses in their practices.2 This law, effective January 1, 2012, requires physicians who own these types of businesses, including ASCs, to inform insurers of their ownership. However, the law allows physician owners of ASCs to send patients to their own ASC for surgery, with payor preauthorization. Previously, California allowed self-referrals to ASCs, yet prohibited self-referrals to other types of entities."

Why do owned of ASCs do more surgery? There appears to be a recruitment effect, so that doctors who do lots of surgeries tend to buy into ASCs. Also, the study finds that surgeons can do more surgeries in ASCs, which are more efficient. Another reason claimed by the study are financial incentives. Yee claims that:
"They increased their surgery volumes by 14 to 22 percent due to the financial incentives, or 15 to 25 surgeries per year for the average surgeon who became an owner—compared with the number of surgeries that each of these surgeons performed prior to becoming an owner. This effect explained 14 to 21 surgeries in the difference in surgeries performed per year between owners and non-owners, or 18 to 33 percent."

Another factor was improvement in medical technology.

The WCRI charges that ASCs have tended to increase workers' comp volume:
"Relative to the types of patients they would have treated had they not been owners, ASCs provided more surgeries to patients covered by workers’ compensation, commercial indemnity insurance, and Medicare. These payors were higher-paying insurers at the time of the data. Due to owner financial incentives, the average surgeon increased the number of workers’ compensation patients by 17 to 23 percent and the number of patients with commercial indemnity insurance by 20 to 51 percent. Surgeons did not increase the number of patients covered by Medicaid and certain health maintenance organization (HMO) plans."

It is important to note that the WCRI study does not claim that the surgeries that were done were not necessary or that the surgeries had bad outcomes.
Specifically, the study says"
"This study did not address whether any of the additional surgeries (due to financial incentives, increased capacity from expanding one’s network, or ASC efficiency gains) were necessary or not. We also did not address whether they were cost-effective or not. If medically necessary and cost-effective, then increasing surgeon ownership would have improved access to surgical care for those who previously did not have access, in particular, those covered by workers’ compensation, commercial indemnity insurance, and Medicare. If the surgeries were not all necessary, then increasing surgeon ownership would be a cost driver and merit increased regulatory attention. This question deserves additional research using data on patient outcomes."

The WCRI study makes various general recommendations for payers and policymakers but notes that ASCs have many advantages, including costs.

Concluding, the WCRI study notes that:
"We speculate that physician ownership and the role of ASCs will become a bigger issue for injured workers and workers’ compensation payors in the next decade. The use of ASCs for orthopedic services and pain management services is growing rapidly (Koenig et al., 2009). ASCs may become as dominant a setting for services treating musculoskeletal and nervous system conditions as they are for eye surgery and gastroenterology today. Management companies of ASCs indicate orthopedics as the most desirable medical specialty in which to do business (Fields, 2011). Since many injured workers today are treated with these types of services, we may expect the issue regarding physician ownership of ASCs to receive more attention by regulators that oversee workers’ compensation systems in the future.
The efficacy of current policies intended to counteract adverse effects of physician ownership has not been determined. The optimal policy would curtail any adverse effects, while encouraging medical innovation focused on producing high quality and cost-effective care."

Wonks out there may want to download the study, which is chock full of data and graphs. (available for a fee) off of the WCRI website:
http://www.wcrinet.org/studies/public/b ... urgery.pdf

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com

Every good play has its scenic backdrop.

Shakespeare's Hamlet had its Elsinore Castle in Denmark. South Pacific had its Bali Ha'i.

So it will be this year with California workers' comp, which will be on the table as the legislature struggles with deficits spinning out of control.

By the time you read this there will be few who haven't heard about California's $16 billion deficit .

A sour economy continues to result in poor revenue collection, pushing some hard choices to the fore.

How workers' comp will fare in budget revisions isn't yet known. Despite the fact that the system is supposedly user funded, that has not always spared the system from cuts. Under Schwarzenegger, judges and staff were furloughed, cutting hours and pay.

The choices ahead are grim, even if one of the proposed tax initiatives
(Munger or Brown) passes.

Civil courts are likely to see more cuts, putting the civil justice system in danger.

The pressure on workers' comp funding is likely to be extreme.

For a good assessment of some of the tough choices facing the Governor and legislature, I recommend this piece by John Myers, "Bigger deficit, bigger budget fight ahead":
http://www.news10.net/capitol/article/1 ... on-deficit

Stay tuned.

Julius Young
www.workerscompzone.com
www.boxerlaw.com

California's workers comp market is becoming less concentrated, with 25 insurer groups having at least a 1% market share.

That's according to data compiled by the National Association of Insurance Commissioners and the California Department of Insurance.

According to a bulletin from the California Workers' Comp Institute, workers' comp premiums have grown to $7.8 billion after reaching a nadir of $6.9 billion in 2009.

CWCI attributes the reductions from a 2004 high of $16.1 billion in written premium (net of deductible credits) to "high unemployment, payroll reductions and job shifts during the recession, legislative reforms, falling claim frequency, and a soft market that kept premium rates low despite rising claim severity".

SCIF continues to have the highest premium volume, though its market share continues to be far less than it was 10 years ago. SCIF actually continued to lose market share in 2011, down to 12.9% in 2011 from 16% in 2010.

SCIF's shrinking role has been a painful experience from much of its longterm workforce, including its legal staff.

Market share gains were posted in 2011 by Hartford, Travelers, Fairfax (which acquired Zenith), Berkshire Hathaway, Liberty Mutual, Employers Holdings Groups, Zurich and Everest.

AIG (now Chartis) was an exception, shrinking a small amount.

Still, with so many carriers in the California workers' comp market, even substantial increases in premium (comparing 2011 to 2010) written by these carriers did not translate into large market share increases. For example, Hartford premium jumped 38% but its market share only inched up from 6.4% in 2010 to 8% of the 2011 California market.

Overall, this appears to be good news. A wide number of companies appear to continue to be interested in participating in the California workers' comp market.

We're not seeing an exodus of carriers. And the top 10 carriers are mostly national insurance companies (except SCIF).

Stay tuned.

Julius Young
www.boxerlaw.com
www.workerscompzone.com

Should judges be free to mine information on social media sites that pertain to claimants?

In an era when so much personal information may be found on the internet, is it appropriate for judges to do internet research about the parties appearing in their courtrooms?

I'm not aware of any instances in which this issue has arisen in California's workers' comp system, but it is likely to be coming.

Some claims adjusters and defense attorneys now check social media sites to see if they can uncover applicant activities that are inconsistent with what is reported by doctors or the claimant.

Last year a prominent defense attorney wrote a piece entitled "I Spy for Free". He noted that much can be gleaned now from Facebook and other sites.

Stuff that in the past investigators would have had to dig up now appears "in plain view" in some cases.

But is it appropriate for judges to go outside the scope of the evidence presented in the case?

This is an issue which has been raised now in connection with Social Security hearings held by federal administrative law judges who hear Social Security Disability and SSI cases for the Office of Disability Adjudication and Review.

An article in The Washington Times by Stephen Dinan notes that:
"The Social Security Administration last month told its disability-claims judges they are no longer to seek out information from websites when deciding cases — taking away a tool some of those judges say would help in uncovering fraud."

"Agency officials said reviewers can’t trust information posted online, and also said the mere act of typing in queries could compromise protected private information, so they shouldn’t try to access anything."

"Social Security’s ban covers all Internet sites, including social media such as Facebook."

"But Sen. Tom Coburn, Oklahoma Republican and a top taxpayer watchdog, said avoiding the Internet means giving up a valuable anti-fraud weapon — one that he said even federal courts have relied upon in some disability cases."

Apparently Social Security is taking the position that use of internet "information" is better left to fraud investigations of the Inspector General.

Efforts by ALJs to do investigations outside the courtroom can become a slippery slope. Perhaps judges should be allowed to look at internet material that is brought to their attention by a source.

Note that's different than the judge initiating his or her own searches.

Of course, Social Security is not adversarial, and there is no defense attorney at SSD/SSI hearings to represent the government's interest.

But to give the trier of fact wide-ranging investigatory license may start to confuse the role of the judge.

That's especially true in workers' comp, where employers and carriers are represented by attorneys who are capable of pointing out damning evidence.

The comp system should follow Social Security on this one.

Julius Young
www.workerscompzone.com
www.boxerlaw.com

It was smooth sailing at the legislature this week for Christine Baker and Rosa Moran.

Both easily won confirmation to their posts as head of the DIR and the DWC.

By all accounts, Moran and Baker work well together.

With reform efforts on the horizon, the political pressures on both will be substantial.

Each brings a unique background to the job of managing California's workers' comp programs. Baker has years of experience navigating workers' comp politics, dealing with stakeholder groups and policy wonks. Moran has extensive experience in the system from representing injured workers and serving as a workers' comp judge.

Congratulations to both.

Julius Young
www.boxerlaw.com
www.workerscompzone.com