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Physician dispensing – Exactly how much more does it cost?

WCRI’s just published another in their excellent series of reports benchmarking workers comp costs and outcomes in key states. This latest, entitled “PRESCRIPTION BENCHMARKS, 2ND EDITION: TRENDS AND INTERSTATE COMPARISONS”, provides additional insight into the difference in cost between drugs dispensed by physicians and retail pharmacies. It is based on 2006 – 2008 claims with more than seven days of lost time that had at least one script paid by work comp. Before we dig into the cost differential, there’s one item in particular deserves your attention
Here’s a direct quote:
At $1,182, Louisiana had the highest average prescription cost per claim, [emphasis added] more than three times as high as that in Michigan, Minnesota, and Wisconsin, and 50-70 percent higher than the states with higher prescription costs.”
Two reasons – utilization, and physician dispensing.

Well, claimants in LA received higher cost drugs, more of them, and a higher percentage of their scripts were brand drugs. Louisiana also had a ‘medium’ level of physician dispensing that had grown moderately over the study period. LA claimants were also much more likely to have carisoprodol prescribed than claimants in most other states.
In sum, claimants “filled more prescriptions for more pills per claim in Louisiana than in any other study state.”
Ok, back to the premium paid for physician dispensed scripts. Here are a couple examples.
In Florida, ibuprofen dispensed by physicians cost 48% more than when dispensed in a retail pharmacy. In Illinois, it’s 42%; Louisiana, 81%; Maryland, 63%; New Jersey 69%; Pennsylvania 57%.
Ibuprofen is a bargain compared to Soma(r) (carisoprodol); Florida’s docs were paid 464% more; Louisiana 268%; Illinois 384%; Maryland 318%, Tennessee 300%.
In total, physician dispensed drugs likely add about a half-billion dollars to employers’ workers comp costs – cost that brings no added value.
What does this mean to you?
Do you write comp in Louisiana?

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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