My firm has conducted a survey of pharmacy benefit management in workers comp each year for the past four, and the latest has been completed. Executives in managed care and claims as well as program managers from 20+ payers responded to the Survey, some for the fourth time.
Here are a few of the highlights.
Drug spend for the respondents amounted to $1.02 billion, fully 20% of the (estimated) $5 billion in total WC drug cost.
1. Drug cost trend has moderated significantly from double digits down to 6.5% industry wide.
2. Larger, more sophisticated payers saw the lowest increase, with some experiencing flat to slightly lower total drug costs.
3. Less sophisticated payers’ trend rates were much higher, up to 20%. For those payers experiencing higher costs, the inflation was attributed to
– Higher utilization
– Physician behavior
– Over-use of pain medications e.g. Oxycontin, Actiq
– Off-label use
– Higher unit prices due to Part D
4. The focus on utilization (addressing the volume and types of drugs used by claimants) has increased dramatically over the last year.
5. Third party billers are just as big a problem as ever – that’s the survey respondents’ opinion.
For a copy of the public version of the survey, email me at infoATHealthStrategyAssocDOTcom.
Pharmacy is the last frontier of medical cost containment in the workers compensation arena.
In California the way to control pharmacy is throught the implementation of AB 749, or through the contracts with the MPN medical providers
Bill is exactly right. Pharmacy is the last frontier and most carriers and self-insureds naively believe the Medi-Cal fee schedule and a PBM are sufficient.
We need only remember efforts to control medical costs. First it was a fee schedule and then PPOs. Eventually carriers and self-insureds saw the need for utilization review.
We are now rounding the same curve in terms of pharmaceutical charges. We have a fee schedule, we have the PBMs….eventually everyone will seek control of over utilization. The abuse of pain medications and office injections in lieu of less expensive pharmacy dispensed pills seem like reasonable starting points.