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Hawai’ian Drug Summit – weird goings on…

I attended and was privileged to speak at the Hawai’i Rx Drug Summit, held yesterday in Honolulu. Focused on opioids and drug controls but with a heavy emphasis on physician dispensing of drugs, the Summit also featured a random guy videotaping me, a guy who claimed he’s working on a documentary about the dearth of doctors on the Islands.

That line made no sense, as I wasn’t speaking about anything remotely related to that issue, yet he had three (!!) separate cameras recording both of my talks – and one followed me around recording me as I chatted with other attendees…

The guy, one Michael Cooper, claimed he was doing this on his own, was not affiliated with any other entity, and was funding this documentary all on his own.  I informed Cooper, in front of the 300+ people, which included law enforcement, that he could only use the video or any recording of me for the documentary and no other purposes whatsoever. Cooper agreed – again in front of the entire audience.

We shall see what develops; given my “popularity” with the physician dispensing crowd, I thought it might just be that somehow they’d want to record me saying something they could twist or slant or use to further their cause….

Here are a few of the highlights.

Tim Dayton of auto insurer GEICO spoke, noting 60% of auto loss costs are for auto repair, but losses are trending lower due to better, more efficient repairs and competition.  However, the trend in other coverages – especially PIP (medical coverage) is getting much worse.  In fact, GEICO needed a rate increase of 75% – 89% increase for PIP for some of their insurance lines, and ended up with a 25% rate increase for PIP.

A big driver is – surprise – physician dispensing.

Dayton is, to his dismay, quite knowledgeable about drug costs, drug pricing, and physician dispensing.  He opined that some very smart peole had figured out how to exploit a rule that had been written with the best of intentions – he was referring to a HI rule re reimbursement for drugs for medical treatment.   Dayton cited SpeedGel (you remember that, right?) and the “evolution” in pricing for that “medication”, it was $24.95 originally, then $59.95, then $258.96, now $416.01 at 140% of AWP, the reimbursement required by state regulations.  And all with barely a change in the wonder drug!

Dayton was followed by Paul Au, the risk manager for the City and County of Honolulu, where drug costs went up from $400k to 1.8 million over ten years; and a  half-million over two (1.25 to 1.78 from 2011 – 2012).  This was driven almost exclusively by physician dispensed drugs, which happened after a large dispensing entity entered the islands. (this could be mere coincidence…)

For the City/County, physician-dispensed drugs now account for 19% of scripts, 50% of costs; the cost is up 650% over 8 years.

This at a time when claim counts have declined by 300 claims, or 20% or so while drug costs are up 570% on a cost per claim basis.

I spoke twice – first on opioids (yes, again…) and then on physician dispensing, citing CWCI’s ground-breaking research, and debunking the five myths of physician dispensing (improves access (not), improves outcomes (actually worsens them), requires higher reimbursement due to higher cost for repackaged drugs (absolutely false), MD-dispensing is necessary to get life-saving drugs started immediately (completely untrue), reduces disability duration (actually increases it).

The Summit was put together by Kristy Kobayashi of CorVel, and sponsored by CompToday, Genex, ESI, PacBlue, and Allied Managed Care.  Kudos to those folks for sponsoring…

more to come.

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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