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Work Comp pharmacy in 2009 – more dollars, more opioids, more physician dispensing

NCCI released its 2011 pharmacy study yesterday, and there’s not much in the way of good news. Here are a few of the major take-aways from the research, which used 2009 data.
per-claim drug costs grew by 12% in 2009.
Pharmacy accounts for 19% of work comp medical expense, the highest percentage since NCCI started studying the issue.
OxyContin is now the number one drug. Yippee.
Utilization is the main cost driver, and physician dispensing closely follows. Physician dispensed drugs accounted for 28% of spend in 2009, up a full five points from the previous year.
Let’s take a quick look into a few of the other findings.
The older the claim, the more the drug spend. For claims more than 11 years old, drugs account for more than 40% of costs; for drugs 1 to 2 years old, drugs are a mere 3% of spend.
Drug costs for claims 4 to 9 years old are ” distinctly higher than in previous service years. Subsequent exhibits suggest that increases in physician dispensing might be contributing to this growth.” [emphasis added]
Physician dispensing accounts for fully half of all drug costs in Florida; about 44% in Georgia, 35% in Maryland, and about 32% in PA. Bad as that is, the big problem is that physician dispensing rose dramatically in almost every state. (Note that Hawaii’s decrease from 2008 – 2009 was a temporary situation, as all reports indicate physician dispensing has increased rapidly over the last two years.)
There’s a lot more to the study, and we’ll be digging deep into the research over the next couple days. For now, here’s what this means to you.
It is NOT ABOUT PRICE. Utilization is the main driver of work comp pharmacy costs.
Physician dispensing is the single biggest problem in work comp pharmacy. It’s beyond crisis stage.
With OxyContin the number one drug, we can expect claim durations to increase – people on high-power opioids are NOT going back to work.
And a big “well done” to NCCI’s Barry Lipton, Chris Laws, Linda Li, and their unnamed research associates for what is their best work on drugs to date.

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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