Summerfield, Opioids and Rising Workers Compensation Premiums – What’s the Connection?

COVID-19 has taken headlines, but the opioid crisis is still with us, and business owners are warned of increased workers compensation premiums.

The Advertiser recently reported that the Treasurer has warned the average insurance premium rate for business could increase from the current 1.7% to 2% in 2022-23 and likely cost the South Australian economy 20,000 jobs over the next five years. This gloomy prediction is made against the background of a Supreme Court decision in the matter of Summerfield. Mr Summerfield suffered a broken leg at work, required a hip replacement, and later developed serious lower back issues. The South Australian Employment Tribunal found that Mr Summerfield was entitled to compensation for the lower back injury despite it not being the same injury because it had the same cause as the hip replacement and the broken leg. The impact of this interpretation is that other consequential injuries (e.g. gastric problems arising from long term opioid prescription medication) are combined when assessing whole person impairment. As a result, more injured workers will achieve or exceed the 30% whole person impairment required to be classified as seriously injured and therefore entitled to weekly compensation payments to retirement age and medical and like services for life. An extra $100 million in premium per year is said to be needed to make up for the $1.1billion of liabilities estimated to flow from the impact of the Summerfield decision.

In the last couple of years, I have written articles about the opioid crisis in America and the lesser recognised crisis in Australia. In the more recent of those articles in February 2020,[1] I set out an argument that Return to Work SA, as the statutory authority charged with the responsibility of administering the Workers Compensation Scheme (Scheme), has both a moral and financial incentive to address the crisis that has emerged in Australia. As the impact of the Summerfield decision shows, the misuse and over-prescription of pharmaceutical opioids play a part in the financial challenges facing the Scheme.

I acknowledge the RTWSA initiative to educate health professionals and their patients about the use and misuse of opioid medication. “Reach for the facts’’ is a valuable resource, but it is simply not enough and more can and should be done to educate the public and the medical profession.

While COVID-19 has taken most of the headlines over the last 18 months, the number of drug overdose deaths continues to rise. A recent report from the Victorian Coroner showed that the rate of deaths has exceeded the increase in population in the past 10 years.

The Coroner’s report found heroin was still the most deadly illicit drug, and methamphetamine overdose deaths were rising fast, but prescription drugs, including opioids and antidepressants, were by far the biggest killers. Prescribed opioids were responsible for an average 41.6% of overdose deaths each year.

According to the Therapeutic Goods Administration (TGA), prescription opioids are now “responsible for far more deaths and poisoning hospitalisations in Australia than illegal opioids such as heroin”, with an estimated 150 hospitalisations daily.

Beyond the Scheme cost there is the human cost of addiction

Some recent and diverse references to opioid addiction in the news have caused me to reflect again upon the opioid scourge.

Many music lovers will know or have heard of American singer/songwriter/guitarist Melissa Etheridge, a success in the 80s and beyond. In August last year, she talked of her troubles dealing with the loss of her son, who died of causes related to opioid addiction. Beckett was just 21.

In a different context and more recently, Courtney Ross, the partner of George Floyd, testified in the trial of Derek Chauvin, who has now been convicted of murder after kneeling on Floyd’s neck.

Courtney said Floyd had become addicted after taking prescription drugs and returned to illicit opioids two weeks before his death. Courtney herself gave evidence of having struggled with opioid addiction.

Courtney said:

It is a classic story of how many people get addicted to opioids … we both suffered from chronic pain. Mine was in my neck and his was in his back. We both had prescriptions but after prescriptions that were filled … we got addicted and tried really hard to break that addiction many times.

Closer to Australia, ABC News recently told the story of Rod Owen, a champion St Kilda footballer of the 80s. The story is particularly harrowing for many reasons because it is reported that “for 36 years he had been a gambler, a fighter and an addict: alcohol, amphetamines, marijuana, cocaine, morphine, Endone”.

The article deals at length with what Rod calls “a downhill spiral to hell” but goes on to report that:

By 2018, Rod’s most hellish addiction was painkillers. Botched varicose vein surgery in 2015 and the 2017 hip replacement and back surgery that ended his concreting career introduced him to Endone and oxycontin, the drugs that would almost finish him off.

In October 2018, Rod hit rock bottom but fortunately had enough courage to reach out to a mate who had escaped addiction and hard crime and said, “get me into rehab”. Rod is now on the road to recovery.

Rod’s story is not only a general wakeup call about the dangers of opioid addiction but a reminder that while there is a focus on the number of opioid-related deaths, there are many more people who survive but that live shattered lives and don’t have the strength or support network to reach out and say, “get me into rehab”.

Further, many overdose deaths occur accidentally in “opioid naïve” individuals who may have found themselves in a situation of peer pressure to use something that has found its way into a teenager’s party. A dose that would not necessarily be dangerous for a regular user may well be fatal for someone who has not previously been exposed to the drug

The Australian experience

Chronic pain affects about 3.4 million Australians, and in Australia, opioids are among the most frequently used medicines. The most commonly prescribed opioids in Australia include codeine, tramadol, oxycodone, morphine, methadone and fentanyl. At last, after a recognition of the sharp increase in deaths and hospitalisations from prescription opioids in Australia over recent years, the federal government in June 2020 made several changes to regulations that govern the prescription supply of opioids.

The Therapeutic Goods Administration (TGA) says opioids should only be used for short term management of severe pain (e.g. after surgery), and the new regulations mandate that opioids should no longer be prescribed for chronic non‑cancer pain except in “exceptional circumstances”. Other changes include a reduction in pack sizes and fewer repeat prescriptions.

States across Australia are introducing or have introduced national real-time prescription monitoring.

Unintended consequences

For those millions of Australians who lived with chronic pain and had become addicted to opioids, there have been serious consequences because of a lack of pain services. Many people don’t know what options are available or if they are affordable.

Despite the TGA’s new guidelines, I am not sure that the message is getting through to some of our hospitals. Eighteen months ago, I had surgery to deal with a hernia. I had an excellent surgeon and required no pain relief whatsoever. Not even a Panadol. Yet when I was discharged, the hospital insisted that I take home a pack of oxycodone! Mine is clearly not an isolated example because a recent study by a University of Sydney team found that two-thirds of patients who turn up to hospitals complaining of back pain are given an opioid and often because it has been demanded.

Dr Gustavo Machado, who was the leader of the team, said that:

There is a wrong assumption that opioids are a pain killer. There is no such thing as a pain killer. Research shows opioids provide pain relief that is no more effective than other pain medicines”.

Unfortunately, some people who take opioids experience “reward rush effects” that reinforce psychological effects and contribute to their ongoing use. About one in four end up addicted, according to the Monash Addiction Research Centre. One such person, after using the drugs to treat chronic neck pain, said:

When I took these pills, I felt quite like, “she’ll be right, I can handle this”. It gives you a sense of euphoria and control. Its opium – that’s the part I think people forget. They make you not care about the pain”.

Even though the dangers of opioids are now well known and despite the guidelines which the TGA had developed, we still prescribe opioids for chronic pain.

How did it come to this?

Health care providers and drug makers in America combined to turn pain into something to be treated and eliminated. The natural fear of pain was turned into big business, and the fee for service system multiplied treatments which led to financial rewards for pharmaceutical companies (notably Purdue), doctors and hospitals. In 1995, the President of the American Pain Society started a campaign to begin treating pain as a vital sign and an illness in its own right instead of a symptom of an injury or an underlying condition. Opioid manufacturers started aggressively marketing their products, and many doctors listened to the marketing campaign and began to think that modern medicine could conquer pain. As this new outlook on pain evolved, it created a flurry of new business opportunities with physicians and health systems benefiting from an explosion of diagnostic testing for which they could bill insurers, which led to a rapid rise in invasive treatments and surgical procedures.

Many doctors were very concerned about the aggressive marketing and found themselves the subject of fierce attacks by industry-sponsored doctors. Similar experiences are being reported in relation to the use of medicinal marijuana. The non-believers are being lambasted by the cannabis evangelicals

What is the cost?

Australia is said to be about five years behind the United States. I am not aware of any authoritative study that puts a dollar value on the economic cost of opioid addiction but what is known is that life expectancy, which had been rising for the past century in the United States, began falling in recent years because of increases in suicides and opioid overdose deaths. A particular demographic (non-Hispanic whites) was largely responsible, and it is no coincidence that it was the group that had been prescribed the most opioids. According to the National Institutes of Health the 21 to 29% of patients who are prescribed opioids for chronic pain “misuse” the drugs, and there is no evidence that they experience any less pain. Meanwhile, the United States spends more on the treatment of chronic pain than on cancer, heart disease or diabetes.

The role of the business corporation

In my previous articles, I have referred to Purdue Pharma, the Connecticut based company owned by one of America’s wealthiest families, the Sacklers, which has been at the forefront of the marketing of opioids as a safe and necessary way to treat chronic pain as distinct from being reserved for treating pain in cancer patients and those in palliative care. Mundipharma is the Australian arm of Purdue. Its promotional campaign in Australia was driven by the Purdue approach, which involved launch meetings over three course dinners, sponsors and conferences, and a “pain management master class” accredited by the Royal Australian College of General Practitioners.

When you consider the generally prevailing view that the goal of the business corporation is to increase its profits, that is all well and good but without a social responsibility and with grossly unbalanced economic, social and political power that can give rise to scandals and in the case of Purdue Pharma, now in bankruptcy, criminal activities.

Earlier this year, the US Justice Department instituted proceedings against Walmart and some large pharmacy chains, accusing them of helping to fuel the nation’s opioid crisis by inadequately screening for questionable prescriptions. The Justice Department alleges that Walmart created a system that turned its network of 5,000 instore pharmacies into a leading supplier of highly addictive pain killers from about June 2013. Allegedly Walmart started with cut-rate prices on opioids that initially drove shoppers to its stores and then used quick fill prescriptions to encourage customers to stay and keep shopping. As a result, it is alleged that large amounts of addictive pain killers end up on the black market.

The New York Times earlier this year reported that McKinsey & Company, the world’s most elite consulting firm, helped turbocharge the opioid epidemic by using its managerial expertise and logistical know-how to help Purdue Pharma overcome declining sales. McKinsey consultants allegedly employed sophisticated analytics techniques to identify potential areas for increasing sales and rates of prescription such that the company’s marketing and distribution efforts could be more effectively targeted. Earlier this year, the company paid $573 million to settle investigations into its role in helping turbocharge opioid sales.

Meanwhile, the Sackler family entered criminal guilty pleas as part of a settlement with the US Department of Justice, which involved a criminal fine of $3.544 billion, and an additional $2 billion in criminal forfeiture and a civil settlement of $2.8 billion making a grand total of $8.344 billion. Purdue was estimated to have made more than $35 billion from OxyContin sales and, because it is now in bankruptcy, is unlikely to pay the penalties. The Sackler family, who have made an estimated $13 billion from Purdue, is limited to a payment of $235 million in civil penalties as part of the settlement.

Medicinal cannabis – can we learn some lessons from the opioid crisis?

There is bipartisan support for the medicinal cannabis market being embraced in Australia. The National Farmers Federation asserts that growing agricultural exports from $43 billion a year now to $100 billion annually will be significantly enhanced by the ability to export narcotic goods. An article in the Financial Review on 15 April 2021 talks of the benefits which flow from medical cannabis group Australian Natural Therapeutics Group having struck an agreement with “top Canadian player Asterion for a merger that will give ANTG access to a new 500 tonne a year growing and processing facility”.

It said:

After a slow start, Australia’s demand for medicinal cannabis is now soaring. In April last year the number of people being approved by the Therapeutics Goods Administration for access to medicinal cannabis that month was 3,378, while last month the number of approvals had leapt to almost 10,000”.

Why am I concerned?

In my specialist field as a practitioner dealing with employment-related matters, but in particular workers compensation, I have seen firsthand the increase in the prescription of opioid medication over many years and its use on a long-term basis with often devasting effects.

It is reasonably well documented that medicinal cannabis can be of value in the treating of palliative care (particularly brain cancer), epilepsy, chemotherapy induced nausea and vomiting and multiple sclerosis. But, there is massive money involved in the promotion of medicinal cannabis, and I fear that people looking for an easy way of dealing with pain will be influenced by some zealots and other entrepreneurial types opportunistically seeking to promote the product beyond areas in which it can be of value. It was, for instance, recently reported that Gina Rinehart’s Hancock Prospecting company will “pump $15m into a Perth-based medicinal marijuana company ‘Little Green Pharma’” which will “help its acquisition of an established medicinal cannabis facility in Denmark which will provide immediate access to medicinal grade product at volumes which will allow us the opportunity to accelerate our growth strategy (Managing Director Fleta Solomon).”

Andrew Forrest recently entered the medicinal cannabis arena with a $5 million placement by his family investment arm, Tattarang, into Perth based health technology company Emyria. Tattarang chief investment officer, John Hartman said:

“We believe evidence-based, and properly registered, medicinal cannabis and novel psychedelic treatments have massive growth potential across global healthcare jurisdictions”.

The Australian Department of Health Therapeutic Goods Administration undertook a review of all of the available evidence for the use of medicinal cannabis in five different settings and prepared a guidance document for the treatment of chronic non‑cancer pain in Australia. The study concluded that current evidence had not defined a clear place for medicinal cannabis in the treatment of patients with chronic non‑cancer pain and also noted that the risk of harm with long term use of medicinal cannabis was poorly documented, and the adverse effects of long term medicinal cannabis were poorly understood.

One of the things that has become very apparent from the US and Australian experience with opioid medication and the Workers Compensation Scheme is that many GPs simply do not have the time to undertake the examination of their patient’s background and symptoms and have prescribed medication that pharmaceutical companies have promoted. I fear the same will occur with medicinal cannabis. As has been the case with opioids, busy doctors confronted with patients who have read about the “benefits” of medicinal cannabis will be “encouraged” to comply and prescribe the medication without a proper examination of its efficacy in the particular circumstances.

The fact is that it is cheaper for patients to continue failed pain treatments, surgeries, injections and medications than it is to opt for treatment by pain clinics and pain physicians who emphasise conservative care such as physical therapy, pain neuroscience education and multidisciplinary pain rehabilitation programs.

A new book, “Hippocrasy: How doctors are betraying their Oath” by Rachelle Buchbinder, a physician specialising in rheumatology and a Professor of Clinical Epidemiology at Monash University and Ian Harris, a Professor of Orthopaedic Surgery at UNSW Sydney, makes a claim that, “Modern medical care is designed to maximise the number of encounters with the system, constantly prescribing, operating, testing and scanning, and prioritising business over science. It is a system rife with perverse incentives and unintended consequences producing health care without necessarily improving the health of the recipients of that care … astoundingly, it has been estimated that about one-third of medical care is of no value, while another 10% is actually harmful”. Of relevance to one of the themes of this article, they assert that:

“Doctors and patients can be fooled into believing that treatment has worked because many health problems, such as tennis elbow, headaches and influenza, are self-limiting, which means they improve over time without any treatment. This is known as the “natural history” of the condition: what happens if we do nothing. This is why every treatment for the common cold and even acute episode of non-serious low back pain appears to work – the appearance (observation) is an illusion that can be exposed and explained by science (experimental studies). People with both conditions improve over time and the treatment is irrelevant.

Overall, less than 1% of people who visit their GP with acute low back pain will have a serious cause for their pain, and even in the Emergency Department, that rate is less than 5%. The reality is that many people with low back pain get imaging when they don’t really need it. Considering that most of us will have back pain at some time or another, and about half of us will be sufficiently worried to see a doctor, that is a lot of unnecessary imaging. … unwarranted imaging of the spine not only exposes them (the patient) to unnecessary radiation if they have an x-ray or CT scan, it is also likely to lead to unnecessary treatments including opioid prescriptions and surgery”.

In the workers compensation setting, providing pills to treat pain is a lot cheaper than the conservative approach. The corporatisation of general practice and the resultant need to “push” patients through means that there is little time to work through the problems associated with chronic pain. It is often not appreciated that the person who develops chronic pain syndrome is often someone with a pre-existing psychiatric disorder like anxiety or a mood disorder. The result often is that the wrong drugs are given to the wrong person for the wrong reasons, and the pain becomes chronic. That course of action has been seen in relation to opioids, and I am concerned that medicinal cannabis will follow the same path. The cost to society as a whole can be massive, and the cost to the Scheme and ultimately to South Australian business owners would also be significant.

[1] https://www.dwfoxtucker.com.au/2020/02/the-opioid-crisis-in-australia

For more information, please contact:
John Walsh

John Walsh
Director
p.  +61 8 8124 1951
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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