Today’s catch up leads off with some pretty grim news. Pennsylvania’s drug problem is getting worse.
WCRI’s just-released report on physician dispensing drugs to work comp claimants in Pennsylvania provides a clear warning to the Keystone State’s employers and taxpayers – costs are going up and they are getting screwed.
Without effective controls on the practice of dispensing, PA saw physician dispensed medications increase from 17% of total drug costs to almost half within four years, due mostly to a huge markup in prices. In one of the more egregious examples, doctors were paid $7.89 per pill for generic Prilosec, compared to $0.67 per pill at Walgreens.
That’s 1178% of the retail price.
For a medication that probably isn’t needed in the first place.
There’s legislation pending in PA that would go a long way to fixing the problem, legislation backed by labor, the Chamber of Commerce, insurers, and the Pennsylvania Medical Society. The only opponent is – ostensibly – the PA Orthopedic Society. My bet is the real opposition is backed by the dispensing companies who are making ungodly profits and contributing some of their ill-gotten gains to the effort.
And those dispensing companies are backed by investors – one of if not the major player here is dispensing “technology” company Automated Healthcare Solutions – which is owned by giant private equity company ABRY Partners.
As a good friend in the private equity world once told me, there are two types of investors in work comp – those who look to do well by reducing costs, and those who look to do well by increasing costs.
ABRY is the latter. Perhaps PA employers should send ABRY’s Hilary Grove – an AHCS board member – an email to get her thoughts…firstname.lastname@example.org
Other news of import…
Another hat tip to WCRI for their excellent webinar on recent developments dealing with opioids in work comp. The underlying reports on long-term opioid usage and multi-state comparisons of narcotics in work comp are well worth the read. Notably dispensing docs profit from prescribing and dispensing opioids…perhaps Ms Grove can address this as well… (hat tip to BI’s Stephanie Goldberg)
From Sandy Blunt comes this basic lesson – more than anything, business success is about getting the basics right. Really understand the fundamentals, handle the work efficiently and correctly, and respond to customer service needs.
From a colleague comes this on compounding–
Not sure if you heard about physician compounding bypassing the pharmacist. I attended PAINWeek and visited a booth by AbbyJenn. They are a marketing organization that will set up compounding within a physician’s practice (just buy 3 pieces of equipment or we can arrange a lease) and use staff or hire a pharmacy tech (they will train in 30 minutes) so compounds can be produced and delivered in 10 minutes and the doc can make the profit.
They provided a sheet with one prescriber’s business in August, and compounds are going out the door paid by ins at $1400. They also offer a formulary of typical topical mixtures to “maximize revenues,” will bill insurance & WC with “immediate claim adjudications” (and may get preapproval, but I am not clear on this point), and call the patient directly when it’s time for a refill!
OK, that’s all I can deal with today. Keep fighting the good fight.