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Workers’ comp drugs – its NOT about the cost

The reaction to yesterday’s news that pharmacy costs have dropped by over a billion dollars was a bit disappointing – and missed the key takeaway.

That is – we’ve made a ton of progress, and we still have a long way to go.

Instead, some asked “where are the savings going?”, claiming employers and patients aren’t benefiting from the reduced cost.

A Kansas legislator was among those positing that question; perhaps he was unaware that Kansas employer’s premiums dropped 7.6% this year. Kansas’ results mirrored the nation’s and other states:

Of course, there are many other reasons rates and premiums are dropping across the board:

  • a nine-year long economic expansion;
  • a solid job market;
  • continued decline in claim frequency and anecdotal reports of a drop in total claim counts;
  • better control of medical costs; and
  • lots of capacity in the insurance market

are the most significant contributors.

Another critic complained that “the savings are going into insurers’ pockets.” There is some truth to that, as workers’ comp insurer profits remain at near-record levels despite the continued decrease in premiums.

(Re increased benefits for patients, that is a state regulatory issue as indemnity benefits are almost all driven by a formula involving cost-of-living benchmarks)

But the key point is this – work comp has done great work eliminating opioids – and that is wonderful news by any standard.

As CompPharma’s report details, a key driver of the drop in drug costs is lower opioid utilization. That is very good news indeed; fewer patients are getting opioids, and other reports indicate dosages and treatment duration are declining as well. Moreover, the drop in opioid usage in work comp is far greater than the overall decline in drug spend, indicating we are doing a far better job than the rest of the insurance world despite the difficulties inherent in managing drug utilization in comp (no economic levers to influence consumer behavior, few states with pharmacy network direction, widely varying regulatory environments).

For fifteen years I’ve been interviewing the people most responsible for addressing the opioid crisis in work comp. While costs are important, without exception these professionals see their job as improving patient care, reducing the risks and dangers inherent in opioid prescribing, and helping patients recover quickly.

Their relentless focus is leading to healthier patients and lower costs for employers.

We have a very long way to go. While lots of work from lots of people has helped dramatically reduce the initial (or even more problematic second) opioid script, the much tougher challenge is helping long-term opioid patients reduce and end their use of the drug.

Some payers are making solid progress; you can hear from four of them at IAIABC’s annual meeting this fall. I’ll be moderating an intensive review of how these payers are successfully helping patients reduce opioid consumption and get back to being themselves.

What does this mean for you?

Congratulations on making major differences in many patients’ lives. Now the hard work begins. 




4 thoughts on “Workers’ comp drugs – its NOT about the cost”

  1. Great post. The progress workers’ compensation has made in reducing opioid prescriptions, particularly for new injuries, is encouraging. As you point out, there is still work to be done in treating those with opioid dependence or addiction and identifying successful strategies to manage chronic pain. Can’t wait for the rockstar line-up at the Convention. Thanks for continuing to talk about this issue!

  2. Obviously reducing and hopefully eliminating opiate use for anything but acute and terminal pain is the right thing clinically. All else is secondary. The market will address insurance premium pricing in a clearly competitive field. The shame is the greed that drove and drives clinically inappropriate use of opiates. It kills people, destroys lives, families and communities. Here in Seattle a significant percent of our large homeless population are opiate addicted. How many of these first started with a prescription vs. street heroin I have no idea. But clearly the biggest opiate drug dealers in modern history are the Sacklers and their ilk at Purdue and other companies. And my colleague physicians who drank the Kool-Aid and wrote or are writing scripts for this stuff, collecting nice fees as a result, do not have clean hands themselves. What has happened is a travesty and it is heartening that we may be emerging from this nightmare. It will sadly take a long time and more will die from overdoses in the process. But fewer addicts going forward is a good thing.

  3. “Where have all the savings gone”? Look at all the lives that have been spared the scourge of opiates! Still in California we are seeing the expansion of Pain Management providers that are opening satellite offices in 4-5 cities and traveling to see up to 70-120 patients a day to write scripts for opiates. The impact on these patients is tremendous, and as Joe states we still have a lot of work to do in getting these patient clean and off the opiates. When done properly their quality of life is so much more improved.

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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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