Independent Contractors or Employees

There seems to be a great deal of confusion among small business concerning the classification of independent contractors when they are in fact employees in the eyes of the IRS.

Here is a useful IRS site (Wow! thats an oxymoron!) which goes into quite a bit of detail on the matter.

The owl in my planter

A few weeks ago this juvenile great horned owl took up residence in my wifes planter on the front porch. I had a teleconference that afternoon and we watched each other through the front door for about an hour.

Practicing What We Preach

Later today during an enrollment meeting I will without question be approached by a morbidly obese employee inquring about bariatric surgery. It happens every time I visit this company.
In fact it happens today at a lot of company's. My experience in speaking with employees about wellness shows they are interested in avoiding illness but many have simply not made the connection between their behavior and its inherent risks aside from smoking. So when I explain that 70% of health care costs are linked directly to lifestyle choices--what we eat, how much exercise we get, or do not get--I will observe lightbulbs going off in the room.

Personally I am down 23 lbs for the year and have a ways to go on my own goal. My hope is to be able to deliver my wellness message with a before and after picture that encourages behavioral change.

The Cenek Report has an interesting post today on obesity and wellness.

The Drug War

The National Community Pharmacy Association (NCPA) commented on a "bogus"
study released by The Pharmaceutical Care Management Association (PCMA)
in a spin war designed to garner support for H.R.971, the Community Pharmacy
Fairness Act of 2007. See if you can detect the hatred here;

The study paid for by the prescription middlemen lobby claims
that one of the main provisions of H.R.971, which allows
independent community pharmacists to join together in
negotiating lower prescription drug prices,would increase
health care costs.
In response, National Community Pharmacists Association(NCPA)
Executive Vice President and CEO Bruce Roberts, RPh, issued
the following statement:"Pharmacy benefit managers are
continuing to post record profits while many independent
community pharmacists are being driven outof business due
to anticompetitive PBM business practices. The nation's giant
PBMs are the subject of a slew of investigations and
prosecutions for deceptive business practices, but oppose state
and federal efforts to reform their business
practices and bring transparency to the PBM industry.
The statistics cited in the self-serving, self-funded report
are particularly questionable in light of the fact that PBMs
keep their business operations, upon which the conclusions are
based, a closely guarded secret. In fact, the giant PBMs
make much of their profits by taking kickbacks from drug
companies and through interest earned by delaying reimbursements
owed to community pharmacies.
"The report's figures are nothing more than an attempt by PBMs to put
Congress and the public on notice that they intend to hold American
taxpayers hostage if attempts are made to reform the PBMs'
anti competitive business practices.

The NCPA left out price spreads on generics--hey they want in on that action too.
But the NCPA is correct to call out the PBM's for keeping their reimbursement levels to retail pharmacies a secret even from the employers for whom they purportedly work as vendors. There ought to be a law against that and in short order I sincerely hope there is.

So I applaud the NCPA for pointing out the record profits PBM's are enjoying while telling their clients to shut up and take the pain. Employers all have a huge stake in this fight. By the way Iowa has passed a new law which awaits the governors signature which would regulate PBM's.

Dr Spin Medicine Woman

Kudos to Matthew Holt from The Healthcare Blog for turning up this Daily Show Episode where Dan Bakkedahl delves into the the wonderful world of pharmaceutical sales and interviews Miss Florida, who you guessed it, is in pharmaceutical sales

Mental Health Drives Indirect Absenteeism Costs

HR Web Cafe has a great post today on highlighting mental illness as the leading driver of indirect absenteeism costs for employers according to an Employee Benefit News Survey.

Of interest is that only 12% of employers screen for mental health and primary care providers are not compensated in many cases. Compounding the issue is the fact that managers and supervisors are not trained to recognize at risk employees.

Another reason employees may not be utilizing mental health benefits is that managers do not encourage it. Less than one-fourth of the HR-benefits directors surveyed believe the managers in their companies have an overall understanding of the toll mental health takes on a person and family members. Furthermore, only a third say their companies provide managers with education on mental health issues, and only 15% say they train managers in recognizing mental health problems and directing employees to treatment.

PBM Mail Fails Employers

For the last decade PBM's have actively engaged employers to move maintenance drugs to mail ostensibly for the lower costs available via that channel.

Yet a study published in The Journal of Managed Care Pharmacy reveals mail relative to community pharmacy;

1. Generated lower generic utilization rates (37.7% Mail versus 49% Community Pharmacy);
2. Produced higher costs in roughly half the top 20 generic categories;
3. Plan sponsors were found to make higher payments per day of drug therapy for prescriptions dispensed via mail order for many therapeutic categories.
4. One plan sponsor paid higher net costs for generic drugs secured through mail
   

This study was conducted from claims data from two public entities in Texas covering over 637,000 members and 8.7M pharmacy claims. In other words it is we taxpayers in The State of Texas who get to pay for "failed mail". I call it failed mail simply because implementing a process that moves members who desire the low cost in therapuetic class generics could easily take the overall generic utilization rate at least to 49% and likely into the 70% range for some employers.

Assuming mail order is less costly may prove to be an expensive mistake.

Employers with a $250,000 annual drug spend can request a 12 month claim file from their PBM with the right data elements below and know with certainty whether they are getting the best deal.

Would it not make sense to bend your pharmacy trend into a negative direction before all the specialty drugs hit the market?