I has the honor of co-presenting with CWCI’s Alex Swedlow at the Casualty Actuary Society’s annual meeting this morning. Alex shared the results of CWCI’s latest research into California’s work comp system, and in particular the impact of Schedule II narcotics.
Some of the news was pretty frightening – and some was encouraging.
For example, the percentage of drug dollars from repackaged drugs dropped by 95% after the loophole was closed in early 2007. Repacks cost two to four time more than the same script purchased at a retail pharmacy, so this was good news indeed for comp payers.
Sticking with the positives, CWCI’s analysis indicated the reforms drove don system costs by $13 – 25 billion between 2005 and 2008. Unfortunately costs have once again resumed their upward trend, driven in part by pharma, which now accounts for 13% of work comp medical costs in California.
Notably, dollars spent on potent Schedule II narcotics grew by 414% from 2005 to Q2 2009 while the number of scripts jumped by over 500%.
CWCI analyzed the impact of these drugs on claim costs, and found a strong correlation between increasing levels of Schedule II payments and adverse effects on injured worker recovery. Swedlow reported claimants that received the highest narcotic dosage levels had 200% higher medical costs than claimants receiving lower dosages.
My bet is the majority of the problem is due to the inappropriate prescribing habits of relatively few physicians. And I’d give odds.
What does this mean for you?
Reviewed your CA drug cost and utilization reports recently?
Nov
9
