Insight, analysis & opinion from Joe Paduda

< Back to Home

Dec
23

Drug use in workers comp – the narcotics problem

Just in time for Christmas, the good folks at NCCI have released their study of Narcotics in Workers Compensation, providing readers with just what they want – more evidence that the workers comp industry has a long way to go to get prescription drug use under control.
Sorry to spoil your pre-holiday glee, but the news is pretty troubling. Here, according to Barry Lipton et al, are the ‘highlights’:
– Narcotics account for nearly one quarter of all workers compensation Rx costs
– The share of drug costs attributed to narcotics increases as claims age
– Narcotics are used mostly for back injuries in workers compensation
– and perhaps most troubling, the use of narcotics early in the life of claims is increasing
NCCI’s report (which uses 2007 data) comes on the heels of my firm’s Sixth Annual Survey of Prescription Drug Management in Workers Comp, which found drug cost inflation jumped top 7.5% in 2008, marking the first increase in the inflation rate in the six years the Survey has been conducted.
The ‘good news’ is that the percentage of drug dollars spent on narcotics has stayed relatively flat for the last eight years, this despite the rapid, and close to complete, penetration of PBMs into the work comp space. While that good news may not appear to reflect well on PBMs (and payers’ efforts too), NCCI found that average narcotic costs per claim stabilized several years ago after several years of rapid growth. (I’m a big believer in cost per claim as a metric, as it does away with the influence of variations in claim frequency and is thus a better way to assess drug management performance)
The net? Cost increases have flattened out, but to this non-pharmacist’s eye there appears to be a lot more narcotic spend than necessary.
There are some rather interesting geographical nuances here as well; states with above average use of narcotics include CA, OK, TX, LA, AL, SC, MA, DE, and NH, proving that it isn’t just the deep South that has a narcotics problem.
What does this mean for you?
Time to get focused and get after your drug problem.
This isn’t just a drug cost issue; the extended use of narcotics is also associated with longer duration of disability and higher claims costs.
And a note of compliments to NCCI on the study – this is precisely the kind of information payers need to know.


Joe Paduda is the principal of Health Strategy Associates

SUBSCRIBE BY EMAIL


 

SEARCH THIS SITE

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.

 

DISCLAIMER

© Joe Paduda 2018. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.

ARCHIVES

Archives