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This is a transcription of our interview with Nelson Hendler, CEO at Maryland Clinical Diagnositcs and Diagnostic Risk Management.

You can watch or listen to the interview on our Risk Management podcast here or via any podcast app.

You can watch or listen to the interview on our Risk Management podcast here or via any podcast app.

Boris: Welcome to the Risk Management Show. I am Boris Agranovich, founder and CEO at Global Risk Community.

In this episode I'm talking with Nelson Hendler CEO at Maryland Clinical diagnostics and the Risk Management. Nelson has published four books, 33 medical text book chapters, and 65 articles in medical journals. He was elected president of the American Academy of pain management.

He also served on nonprofit boards, including Baltimore zoo, Baltimore Technion as a chairman and the Princeton alumni association of Maryland as a president.

He has testified before the United States Senate on the medical issues for Senator Edward Kennedy, Senator Howard Metzenbaum and Senator Barbara Mikulski.

Dr. Hendler developed two tests, to control workers compensation, and auto accident costs for self insured companies, reinsurance companies, nurse case managers, plaintiff and defense attorneys.

Nelson welcome to our show today.

Nelson. Thank you, mr. Agranovich. Appreciate it.

Boris. I really appreciate your time today and look forward to our conversation. So could you tell us what your up to this day and what specific topic you would like to discuss?

I know we discussed about a broad topic of fraud detection and the cost saving in workers compensation, but just give us your opinion on this.

Nelson: Well, thank you.

Yes. I think most insurance companies are interested in fraud detection methods, which are effective. Elaine Howel, who's the auditor for the state of California reported that $30 million a year spend to detect fraud in workers compensation cases was not very effective.

And the reason it wasn't cost effective is that the methodologies used are often thrown out of court. They were thrown out of court because the judges view these attempts as inaccurate.

The classic is functional capacity evaluation in an article by Feeler and Chad Meyer. They reported 130,000 cases where they tested for functional capacity evaluation and found out that the functional capacity evaluation was not the least bit predictive in terms of return to work.

And that's a test that costs $1200 to $1,500 and has virtually no value. Independent medical evaluations are often disregarded by the judge who's interested in the reports of the treating doctor and he knows well that independent medical examiners are agents of the insurance carrier and have little or no credibility.

And then the last are the detectives which rake 2,500 to $3,000 and very often their reports were thrown out of court because of the methodology used to gather information.

So my colleagues and I at Johns Hopkins hospital, by the way, I was an assistant professor of neurosurgery at Johns Hopkins university school of medicine for 35 years.

And my colleagues and I at Hopkins were interested in how can we really determine whether a patient is fraudulent, if they're drug seeking or they really have a valid complaint of pain. And the best way we were able to do that was I developed a test called the pain validity test and the pain validity test can predict with 95% accuracy who will have abnormalities on objective medical testing and predicts with the 85 to a hundred percent accuracy who will not.

So it can be used to detect fraud. It can be used to determine drug seeking behavior. It can be used to validate the complaint of pain. The nice thing about this test and it's available over the internet and I'll give you the websites later. But basically this test is always been admitted as evidence in court in nine different States in the United States. So the judiciary, the judges feel that this particular test is credible and provides the information that they need in order to make an accurate judgment.

So the pain validity test is really a self administered test and predicts and is derived by the whole technique of pattern recognition and predictive analytics.

I don’t want to bore you with the mathematics of it, but it really can determine whether a claimant is fraudulent or not much more accurately than IMEs and functional capacity evaluations and detectives, and certainly on a head to head comparison with the MMPI, the Minnesota Multiphasic personality inventory that gets thrown out of court all the time has no predictive value. We checked all 13 scales, none of the scales could predict who had abnormalities.

So this is one way of helping insurance carriers, third party administrators, self-insured companies - detect the fraudulent claimant.

Well, that's great. Now, what do you do when you find out the claimant is not fraudulent and is not going back to work, still complaints or pain and has normal MRI and a normal CAT scan and normal x-rays?

Well, there are a couple of very important things that you should know. The MRI is unable to detect damaged discs 78% of the time compared to provocative discograms. And it has a 27% false positive rate.

In other words, 27% of the time, the MRI will tell you that there's something wrong in a patient who is asymptomatic. So if you do this statistically, you could flip a coin and get more accurate results than MRI.

My colleagues at Hopkins, look at 3d CAT scans and the 3d CAT scan picks up pathology missed by the regular CAT scan 56% of the time.

So now you have an MRI which misses this damage 78% of the time and CAT scan. misses this pathology 56% of the time.

And you also have a patient who complains of pain when they lean forward or lean backwards. We're not talking medicine, we're talking common sense.

Why that you take a picture when the guy is pathologically producing his pain so we can see what happens and that's why patients are misdiagnosed.

Boris. So what is your secret sauce as to why don't you measure the severity of pain?

Nelson. Oh, totally useless. Totally useless bit of information. This pain is a totally subjective experience. It doesn't matter how severe the pain is. What really matters is the type of pain, whether it's a burning pain or shooting pain, a electric shock kind of pain that at all, I can think. That tells you the type of pathology involved in the production of the pain.

What most people don't understand is that there are two separate pain pathways in the body. There's a pathway which transmits acute pain, which is anything from zero to four – eight weeks, maybe.

And then there's another pathway as the pain remains there and progresses, it switches to a different pathway with a different set of nurse and after transmitters, and that's called the RKO Palio spinal thalamic track.

The mistake that most doctors make is that they treat all pain as if it's acute pain, but there's in fact, a very distinct difference between the juvenile chronic pain and that's, that goes to medication treatment as well.

They use narcotics to treat all types of pain and this actually is ineffective in a number of chronic pain states. So we have another set of data that allows you to determine the type of pathology that's producing the pain and then match the appropriate drug with that kind of pain.

So, as an example, if you had nerve pain, the nerve pain would be a burning electric shock kind of thing does not respond to narcotics. You have to use an anticonvulsant.

You can have inflammatory pain, doesn't respond very well to narcotics, but if you use an inflammatory kind of drug, that'll help the pain. So by matching the type of tissue pathology with a specific pharmacological agent, you can really address the pain properly.

Now, in order to, to address the pain properly, you have to have a correct diagnosis. Again, my colleagues and I at Hopkins have published articles showing that 40 to 80% of chronic pain patients are misdiagnosed and 35 to 70% of headache patients are misdiagnosed.

So we developed Diagnostic paradigms, which again are available on the internet, which allow a physician or insurance carrier to get an accurate diagnosis. And these tests give diagnoses with a 94 to 96% correlation with diagnoses of Johns Hopkins hospital doctors feel, and this, by the way, this is all published.

All this is published in the medical literature. So if you administer these tests over the internet, or even over the cell phone, you will get a diagnosis which matches the Johns Hopkins hospital diagnosis.

And that's important because, you know, I always say, if you had a flat tire and you couldn't repair the flat tire until you knew what caused the flat tire, good, you, so you can't, you can't treat a patient who has an inaccurate diagnosis.

Boris: How do you know that pain is real?

Nelson: In our outcome studies, we do the pain validity test. We determined that there's a 95% chance the patient's going to have abnormalities on the correct medical test.

So in addition to doing the MRIs and CAT scans and x-rays, we also do root blocks, peripheral nerve blocks, the gallium scan, and more tests that the average doctor just doesn't do.

Once we establish a diagnosis, then you can put in the proper treatment and I'll give you one example. Don Long who's chairman of neurosurgery at Hopkins and I, and several of our colleagues reported 70 patients who were sent to us with the diagnosis of cervical sprain who had normal CAT scans, MRIs, and x-rays. We gave the Diagnostic paradime to them and found that 95% of them needed to set blocks root blocks, provocative discograms based on the diagnosis generated by the Diagnostic Paragon.

When those tests were performed, dr. Long performed surgery on 63% of the patients who previously had been told, there was nothing that could be done to help them. And after surgery, 93% of the patients reported good to excellent relief.

So the best answer is, is that cheap medicine is good medicine and good medicine saves money. Matter of fact, I just published an article with Tom Emerick, who was vice president at both Burger King and British Petroleum and his last position was vice president at Walmart. He has advocated the idea of centers of excellence to eliminate unnecessary surgery, but to perform surgery when it's necessary. And we have dramatic cost savings using this technique.

Boris: So what tests stand up in court? Are your tests really this strong?

Nelson: The pain validity test does stand up in court. I can give you a list of the 30 cases where it's been used in nine different States, always admitted this evidence, always, which is good. And for some people we have an opinion letter saying that the test may even meet the Dalbert criteria for miscibility as evidence in federal court, not just state and local court.

Boris: So why can't you just use MRI and CT results to diagnose claimants?

Nelson: As I told you earlier, the MRI misses this pathology 78% of the time, and the CAT scan misses this pathology 56% of the time compared to provocative discograms and 3d CAT scan.

Let me give you an example. If I had an oven up on the wall and I took a picture of the oven and I handed you the picture, and I said to you, Mr. Agranovich, look at the picture and tell me whether the oven is hot. What could you tell me? Right. But if I put a thermometer in the oven and I handed it to you, and I said, Mr. Agranovich look at the termometer and it says 375. What could you tell me? Oven’s hot, right?

And that's the difference between anatomical testing CAT scans, MRIs x-rays and physiological testing, which measures the reaction of the body to particular events for CEP blocks. ruePlus provocative district grants, peripheral nerve blocks, bone scans. And that's how you make an accurate diagnosis.

The other problem, which is incredible and which is published in the literature,I'm not making this up. That the average physician spends 11 minutes with a patient during which time he talks eight of the 11 minutes and interrupts the patient after the first 37 seconds, you can't get a history.

So that's what the Diagnostic paradigm does. It has 72 questions with 2008 possible answers and ask all the questions a conscientious physician should ask if you spend an hour with a patient, but they never do. And that's how to make a diagnosis.

Boris: What are the best resources to look at this information and what can you recommend to people to look broadly at this topic?

Nelson: Well, we have documented costs, we have over a thousand cases, documented cost savings to 20,000 to $175,000 a case.

Are you familiar with reserves and the insurance industry? Reserve is basically a prepaid expense. Case comes in and the insurance company or the self-insured company must set aside money to document and prove that they're able to treat this case based on the diagnosis. Well, if you have an incorrect diagnosis, then you're going to reserve the case incorrectly. One of the classic examples is reflex sympathetic dystrophy.

I was also president of the Reflex Sympathetic Dystrophy association of America, as well as the American Academy of pain management. So my colleagues and I found that 71 to 80% of the cases that told they had reflex sympathetic dystrophy didn't have it.

They had nerve entrapment syndromes. Now from an economic perspective, to look at this, the reserve on reflex sympathetic dystrophy is $1 million.

But according to GAAP, Generally Accepted Accounting Principles if you solve the case for less than the reserve, you can take that difference and move it to the income side of your ledger. And it drops to the bottom line. The reserve on nerve entrapment cases is $50,000. So if companies just use that test just for their RSD cases, they would take a million dollar reserve and make it a $50,000 reserve and put $950,000 on the income side of their ledger statement.

So I have a list of reserves for incorrect diagnoses and what happens when you make the proper diagnosis and how it reduces the reserve, which frees up more cash for self-insured companies and insurance carriers. Although most insurance carriers don't want to lower the reserve because they earn interest on the tax deferred basis, but the self-insured companies really want to save money.

Boris. So what is the best way to save money on healthcare costs, specifically now when we have a lot of people who are struggling with this crisis, we have now insurance companies that are really struggling. What is your opinion?

Nelson. My opinion will always be the same - accurate diagnosis and correct treatment, proper testing. If you look at COVID-19, I'm not an expert on COVID-19, but I have been an editor on a number of medical journals.

In fact, I read the Lancet article and said, and it's awful. The statistics are awful. And a week later it got withdrawn from the publication. You must have accurate diagnosis with proper patient selection and proper outcome results. And the proof of the pudding is outcome results. What do you do? What happens when you do these procedures that you think are accurate? And that's what insurance companies should ask when they're dealing with any sort of a company that says, Oh, we have wonderful things.

The first thing they should ask, what are your outcome results. Now for COVID-19 you are facing so many errors. There are errors in testing their errors. There are so many false, positive and false negatives. And to really confound things, the statistics on reporting COVID-19 are also distorted and biased. Do you know the Medicare pays 300% more If you have a COVID-19 case than if you have a pneumonia case.

So if someone dies of pneumonia, guess what diagnosis they're going to put on the death certificate? COVID-19 now they get 300% more reimbursement 

Boris. So that’s why we have these inflating the numbers of COVID-19 patients?

Nelson. Absolutely. It absolutely distorts the research being published. And of course the average reporter knows nothing about bias statistics. So he just reports whatever's given to him. I was just fishing in Alaska went salmon fishing in Alaska had a great time, but before I went, I had to get a COVID-19 test.

Well, the appropriate way to get a COVID-19 tests is to insert a swab, a nasal pharyngeal swab all the way back into the nasal pharynx that goes to here.

And you sort of coughing, you almost have the gag reflex and swab it around for about 30 seconds and then withdraw it and then put in the media for culture.

So I went to the health department in the County where I live Dorchester County Maryland they had free COVID-19 tests, and I get there and the lady says, okay, let me do the test.

And she takes the swab and goes sticks to it, ended up this far, my nose picks it up, puts in the media, and this is the COVID-19 tests that they're reporting. So the chances of false negatives and false positive in all these reports that are coming out of the number of cases is enormous. There's so many variables. The methodology used to take the test, the testing itself. There’s saliva testing, there's nasal swamp, there's blood testing.

So you have the whole group of uninfected infected, but not symptomatic infected, but sick and the response to it. So I can only insist that if anyone's interested in the value in COVID-19, they really asked about the specificity and sensitivity of the test that they're using the measure for the disease. You know what I mean? By specificity and sensitivity,

Boris: I'm not, especially.

Nelson: Well, let me, I know it's a complicated process. Suppose I wanted to catch a tuna fish. Okay. So I use a small net and I drag the small net behind my boat, and I got lots of tuna fish, but I also have macrell and fluke and halibut because the mesh is small. We get all the fish. So it is a highly sensitive, but not specific test. We wouldn't miss any tuna fish. We'll get all the tuna fish.

So it's very sensitive, but it's not specific because there's all other garbage in there. That’s opposed to specificity. If I use a large net, a large mesh net, and I dragged you behind, and everything in the net will be tuna, but it only be a big tuna. All the small tuner would have gotten through the holes in the net. So I have one that is very specific, which is the large mesh, so nothing but tuna in there.

And I have one that is very sensitive, but not specific, because I got a lot of garbage in there as well as too. And that's the difference between specificity and sensitivity. So when you go to get testing, the first thing you should ask is what's the specificity, what's the degree of accuracy. And you know what most people don't know to ask that question.

Boris: Yes, absolutely. We have a lot of conspiracy theories and a lot of blog posts that I delete on our Community because people are trying to to say something wrong about in political sense. So I just don't want us to be a publication that propagates conspiracy theories, but I am not a specialist so I just delete this article because I don’t want to be involved in these kind of discussions because you know, even Facebook deleted a lot of such discussions.

Nelson: One of the books I use when I was teaching was a very old classic. It was written by Daryl Huff, and it's called “How to lie with statistics” published in the 1950s. Let's just take your statistics. They don't go out of date. And in this book it takes a set of data and by statistical manipulation he proves two diametrically opposed points of view using the very same data depending just at how he massagse statistics.

So the potential for error using biostatistics to evaluate anything is enormous.

Boris. So if anyone who is listening to this Interview would like to connect with you, ask youadditional questions, what is the best way to do so?

Nelson: The best thing to do is just use my email. It's docnelse@aol.com

Boris: Fantastic. So I'd like to thank you for this interview and I hope it will be very useful for our listeners and I believe they will get a lot of positive knowledge out of it. Thank you for your tests, which are very useful for insurance industry.

Nelson: Thank you, sir.