Physician dispensing in work comp – worse than you think

The good folks at NCCI just released research which focuses attention on what looks to be the fastest growing part of the work comp medical dollar – drugs dispensed by physicians.
The lead sentence in their annual update[opens pdf] on prescription drug costs puts it bluntly: “The volume of prescription drugs dispensed by physicians to workers compensation (WC) claimants has risen sharply in recent years–putting upward pressure on WC costs.” [emphasis added]
While that’s bad enough, the current situation is likely worse. Why? NCCI based their report on 2008 data. If the 2007 – 2008 trend (excluding California) continued for 2009/10, physician dispensed drugs accounted for 64% of total spend last year.
Between 07 and 08, physician dispensed drugs went from about 8% of drug spend to about 16%. Now, I don’t believe the trend continued for two more years; I also don’t believe it went down. Therefore, I’m betting physician dispensed drugs accounted for somewhere between a fifth and a quarter of drug spend in 2010.
While you’re digesting that, here are a few more factoids to ruin your lunch.
The study, authored by Barry Lipton, Chris Laws, and Linda Li and based on 2008 data, goes on to report:
– physician dispensing has increased in most states, with particularly large increases seen in southeastern and central midwestern states
– Georgia saw physician dispensed drugs hit about 30% of all drug costs, Florida hit about 45%, with Hawaii, Michigan, and Maryland all in the mid-to-upper twenties
– dispensing is increasing for new and old claims; my bet is the growth in dispensing the initial script means there will be a downstream growth in dispensed drugs.
I don’t believe all docs are just dispensing drugs to make more money. I do know the profits for docs and the dispensing companies can be enormous.
More on when, where, why, and how physician dispensing may be appropriate later this week.