Title: Medical Director, State Compensation Insurance Fund
Resume: Dr. Letz began working as medical director for State Fund in 1987. From 1980-2000 he was also assistant clinical professor at the University of California, San Francisco, Department of Medicine. From 1980-1990 he was an attending physician at the Occupational Medicine Clinic, San Francisco General Hospital.
Schools: Dr. Letz attended the University of California, Los Angeles, and earned a B.A. in zoology. His MD was earned at the University of California, San Francisco.
Boards: Board Certification, American Board of Preventive Medicine in Occupational Medicine. Board of Directors, Western Occupational. Chairman, CMA Scientific Advisory Panel on Occupational Medicine.
Favorite book: The Back Pain Revolution by Gordon Waddell, MD
Favorite quote: "Employment is nature's physician, and is essential to human happiness.” (Galen, Greek physician, AD 172)

State Fund’s medical director since 1987, Letz is one of the pre-eminent experts in occupational medicine and a big supporter of the ACOEM guidelines. He warns that payers have to make sure they get good doctors into the system, specifically doctors who produce good outcomes. Dr. Letz has published articles and publications on a variety of occupational and environmental medicine, chemical hazards, occupational injuries, and other medical case studies. He received a medical degree from University of California, San Francisco.

What are the top three issues in California workers’ comp today?  
It depends on your perspective. There are many different stakeholders in the workers’ comp system. Workers and employers are the two primary stakeholders, and then there are doctors, claims handlers, attorneys, and all sorts of others involved. The one thing that the two important groups have in common is that they have an interest in getting value out of the workers’ comp dollar. Value is inversely related to cost and directly related to quality. It expresses the relation between quality and cost. Quality is determined by the functional outcome, which, in worker’s comp, is return-to-work after injury or illness. Value is the number one priority and we have a lot of work to do in relation to medical care to improve value. The top issues in workers’ comp are all related to [that concern].

Are medical provider networks a help or a hindrance? How should they be improved?  
My view is that the networks are only as good as the doctors in them. If you throw a net and catch any doctor, who may not know about workers’ comp or care about workers’ comp or be used to managing the conditions we usually see in workers’ comp, [you won’t be too well off.] Most of the problematic and costly claims are not [the usual] injuries [doctors deal with]. If the doctors in the network aren’t good at managing what I call “aches-and-pains conditions,” the network won’t do any good. [The quality] of medical provider networks depends on who is in them. As we get better at measuring quality of care (and there’s a lot going on in that area, it’s all about data: using data to define quality) we will be able to improve the effects of medical provider networks on the system. Networks themselves won’t help or hinder the system. We need to figure out how to measure quality. Larger self-insureds without a lot of geography to cover have it easier [because they need less knowledge of doctors], but State Fund has to cover the whole state, which is difficult. We are currently working on methodologies to measure quality, and are on the right track.

How should utilization review be improved?  
Utilization review is another thing that is potentially a benefit but for the most part is viewed as an annoyance by doctors and patients. What we’re really trying to do is eliminate the need for utilization review. To do that, if you have the right doctors in the network getting good outcomes, you can say, “Do whatever you like and we’ll just manage outcomes.” You don’t have to bother with authorization of treatment. We’ve started a pilot program with Kaiser and hope to expand it.

What needs to be done to improve return-to-work?  
This is another topic that could be the subject of an entire interview. There’s a chapter I wrote in an occupational health textbook, because it’s a topic I’m passionate about. What I see going wrong in cases with chronic disability, it’s not because of severe injury, but because those cases are mismanaged. Doctors have over-medicalized the process and de-emphasized the role of the patient in recuperating. We have a number of problems in relation to that. Doctors don’t get paid to sit and talk with patients; they get paid to do procedures. They send the wrong message. There are a lot of issues. Doctors play an important role in setting work restrictions and encouraging patients in doing their own rehabilitation. If they neglect [those duties], they do a disservice to their patients. Employers can facilitate disability when they don’t accept employees back [to work] when they have work restrictions. Injured workers sit at home and do nothing for six months. We have work to do in educating employers. Probably the most difficult [part] is the employee who has attitudes, belief systems, and psychosocial issues keeping them from work—telling them they’re not ready to go back to work. Those are the cases that are the most difficult and get the most over-medicalized. They can have surgeries that damage them irreversibly. That’s a priority for us. We want to prevent that from happening and create some positive movement in that injured worker’s life—to get them away from damaging treatment. That’s another major focus.

What do you see, other than medical, as the next big cost driver?  
Medically unnecessary temporary disability. Temporary disability leads to permanent disability. If you look at our indemnity costs, it’s still almost half. Indemnity is still a huge piece. [Some studies say] 80% of temp disability is medically unnecessary. We have a lot of work to do there to prevent it from occurring. It leads to keeping people off work when they could be doing something else. They could be working for another job or another employer. Our Stockton office has been directing people to do work in some way, and we hope that will spread and expand … we may be able to find something else productive [for them] to do. It’s an existing cost driver, but it’s the next area where we can make some impact.

Is it realistic to deal for more cost-cutting reforms in exchange for increasing PD benefits?  
This is an area where I’m not much involved. I don’t get involved with permanent disability ratings and guidelines. I have chosen to focus mostly on treatment. AMA guides are currently the best we’ve got. They’re used even internationally as the standard. They are to some degree scientific, but they’re standards by convention more than anything. It’s an agreed-upon system. They’re used so widely that you can compare disabilities [between states across the country] or outside the workers’ comp system. There’s no reason to change them.

As it pertains to medical, where do you see applicant attorneys focusing litigation in the future?  
They’re always coming up with creative ways to litigate and I wouldn’t begin to second-guess them. When we work with litigated cases on return-to-work, most of the time the attorneys understand what we’re saying. If it means less for them (with permanent disability being less) but means the injured worker will be rehabilitated, they can’t oppose it. I don’t know what they’ll focus litigation on. We’re hoping to just eliminate litigation. We want a system where patients aren’t confused about their treatment and we won’t need attorneys.

Now that the federal health care bill has become law, what impact do you see, if any, on workers’ comp?  
The claims rate is higher for workers who don’t have health coverage. That’s logical because if you don’t have health coverage, you need to find ways to pay for treatment. Doctors cost-shift into workers’ comp if they have patients without health insurance. [Expanding health insurance coverage will reduce this.] It has a positive impact because of less cost shifting.

Is medical severity going to continue to climb or is it just a blip?  
In my view, the definition of medical severity is problematic. [You see] claims for minor injuries that become high cost because they get mismanaged. That’s where the problem is. I think that it depends on how you define “severity.” When medically defined, most of our cases are not severe. Our workforce is aging, so more people are complaining about aching joints and spines. Those maybe shouldn’t be called injuries. That’s not to say they’re not an impairment, but they can be minimized with lifestyle choices. Everybody deals with pain differently. There are a lot of things going on with pain management, and [workers] will have less disability from it [because aches and pains won’t be considered injuries].

Are narcotics being overprescribed, and what will the impact be on the injured worker?  
What we see is that on these patients who have gone through the sequence of having a minor condition and their psychosocial condition, doctor’s management, or employers’ attitude—one thing or another has kept them from getting better—the last resort doctors turn to is pain medication. Narcotics are good for the first week or two, but after that time they have no role to play. If the patient asks the doctor for a refill, though, the easiest approach for the doctor is to give a refill. That innocent first refill can lead to lifelong addiction. We see a significant number of claims that are from lifelong opiates. [Those medications] also get diverted due to their high street value. We’re seeing more overdoses now from prescribed medication than we are from heroin. We’re working with other states and other carriers on this. Everybody recognizes that this is a big problem. We need to change doctor behavior.

Are the current standards of evidence-based medicine adequate to treat all work-related injuries or do updates, or do additional changes need to be made?  
By definition, evidence-based guidelines need to be updated because new research is published. If it’s good research, then it needs to be part of the guidelines. Guidelines, to me, are often misunderstood by laypeople. Really, what guidelines are is a baseline to say what is expected to happen in most cases when a patient has this diagnosis and is at this point in the process. Guidelines are not rules that fit every patient. Humans are different, they have different anatomies and different past experiences, and we have a wide variety in our population. What’s good for a Chinese immigrant with low-back pain may not be good for a Latino with the same condition. What’s good for someone with no history of spine operations may not be good for someone with a history. That’s why we use doctors. Nurses and claims adjustors can’t deny treatment based on guidelines. Guidelines are meant to be a guide only. We need to make exceptions in the utilization review process. That requires cooperation between treating physicians and reviewing physicians who are reviewing the request for the carrier. We would like to have doctors in the system we know are competent and we know are doing the job right.