Prescription drug costs in workers comp are driven by utilization and price – how many pills and how much they cost. Oh, and by the physicians who prescribe the pills, based on what the patient needs. We hope.
Into this has been injected a new profit motive for physicians – the ability for them to become their own drug stores. Several companies are offering this service, enabling docs to dispense drugs out of their own offices.
The positive spin is this enhances compliance and reduces errors due to interpreting illegible scripts. However, no studies have been found to substantiate those claims.
What has been substantiated is the ability of these on-site dispensaries to get around state fee schedules, thereby driving prices up several times over the fee schedule. Here’s an excerpt from an article in Workers’ Comp Executive;
“According to preliminary research done by CWCI and the Commission on Health and Safety and Workers’ Compensation, some doctors charge between 400 and 700 percent more than what’s charged at a pharmacy for the same medication.
CWCI research indicates that the repackaged drug Zantac goes for $255.56 for 150 mg. pills. At a pharmacy, the retail cost is $25.90. At Drugstore.com, the cost is $19.71. Repackaged pricing for naproxen (Aleve) and ibuprofen (Advil) were less than $255 but still more than the alternatives.”
The result – docs can make between $20,000 and $90,000 per year in additinal profit with no risk.
There are several firms involved in this, including Allscripts (IL) and Physicians Total Care (OK).
Several of HSA’s clients, including very large WC insurers, have seen more than half of their drug costs in California come from doctor office-based dispensaries.
What does this mean for you?
If you are a comp payer, higher costs, less control over utilization, and more frustration.
Feb
3
This may be an ignorant question, but are there any safety concerns that come from doctors dispensing their own meds? Pharmacists must learn something in school that warrants their existence. As people take more and more drugs, isn’t it dangerous for doctors to be dispensing their own prescriptions?
Spike – yes for many reasons. First, the doc has no idea what other drugs the patient may be getting – yes, s/he can ask, but patients often forget, misstate, or purposely deny receiving other drugs. Thus, there are no barriers to doctor-shopping for scripts; over-prescribing; outright fraud; potentially harmful drug interactions, etc.