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Why don’t workers’ comp payers have pharmacists on staff?

I’m only aware of three major work comp insurers (Travelers, BWC-Ohio, Washington L&I) that have pharmacists on staff; the North Dakota State Fund does as well.

With pharmacy costs accounting for somewhere around 15% of total medical spend, that seems like a “miss”.  Yes, pharmacy costs have been flat in recent years, but the impact of drugs on work comp claim duration and the medical and indemnity expense associated with long-term drug use is quite significant.

Many payers have medical directors, nurses, and other clinicians on staff to help address medical issues; in some instances ALL medical issues are the purview of clinicians. Yet these payers don’t have pharmacists on staff, relying instead on medical folks.  Sure, they have knowledge of pharmacy, but nowhere near the depth and breadth of expertise resident in even the greenest pharmacist.

As physician dispensing of medications increases, payers begin (yes, most are just beginning) to address their long-term opioid users, off-label prescribing continues to grow, new medications come on the market, and compounding spreads, payers will find themselves at a disadvantage if they don’t have inhouse expertise.

Sure, PBMs have pharmacists on staff, and most are very, very experienced, understand pain management, and know work comp.  They have the added benefit of being “free”; they don’t increase overhead expenses.  But they work for the PBM, aren’t available on an ongoing basis to address the issues listed above, and if the insurer switches PBMs, that experience and corporate history disappears.

Twenty years ago rare was the insurer with any real medical expertise on staff. Claim adjusters were quite capable of handling medical issues, thank you.

It won’t  – at least it shouldn’t – take that long for insurers to see the wisdom of hiring pharmacists.



7 thoughts on “Why don’t workers’ comp payers have pharmacists on staff?”

  1. Joe, this is an excellent observation, and definitely highlights the expanding role that pharmacists fulfill in healthcare today. And as Specialty drugs become more prevalent in comp, the need for pharmacist intervention and compliance monitoring becomes more important than ever. In addition to the insurers you mention, let’s not forget the pharmacists at Broadspire, State of Wyoming (in a consultant capacity), and others. I intend to share your post with all of the colleges of pharmacy with which myMatrixx has an affiliation agreement.

  2. I’m thinking part of the problem is that pharmacists are not yet recognized (enough) as healthcare providers. If we can get supporting legislation passed, perhaps the worker’s comp process can begin its enhancement process? All states need to get on board.
    Seems rather basic to me :-/

  3. Can’t speak for the US but I can tell you that we here in Ontario we have 2 pharmacists on staff. I believe that most compensation boards in Canada follow a similar model. Functionally they have the same status as the nurses and physicians but focus on reviewing formularies, new medication requests and education of staff (claims managers, nurses and physicians) on indications, coverage and appropriateness of medication.

  4. You are right, Joe. Payers need their own pharmacist to help manage the PBM relationship. Because they understand both the needs of the payer and the capabilities of the PBM from a pharmacist’s perspective, they can challenge the PBM to step up their efforts to manage pharmacy spend, deliver cutting edge analytics/reporting and execute impactful clinical programs tailored to the specific needs and goals of the payer. No one knows your pain points and objectives better than your own people. I know from personal experience that this model works.

  5. Joe, in 2007 I hired a pharmacist and built an in-house home delivery pharmacy for our claims at a primary WC carrier (we later built our own directly contracted–i.e., no intermediary–PBM for our claims). The effort was costly but extremely successful. When combined with directly contracted medical networks that prohibited the dispensing of medications (actually it just stated we would not pay for them) we had little-to-no problems with compounds and physician dispensed drugs. In addition to controling costs and controling our data (talk about transparency), we also had in-house pharmacy expertise that allowed us, along with a physical therapist and me as medical director, to have a great grasp on all the medical issues affecting our claimants. Having our own pharmacist allowed us to be involved in injured worker and prescriber outreach and education, pharmacy reviews, input for MSA preparation and a host of other clinical programs. It can–and should–be done.

  6. One more observation Joe – group payers have utilized pharmacists for some time in this capacity. Kudos to the pharmacists at BCBS Optacomp that serve double duty for both the group and workers’ comp sides of the company!

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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