This year the WCRI meeting has a strong focus on chronic pain, narcotic utilization and the impact thereof. Three of the sessions were devoted to the topic, a reflection of the primary importance of pain and opioid use for the work comp industry.
Washington State’s monopolistic work comp insurer spent a paltry 4% if total medical costs in drugs. In contrast, payers in the rest of the country saw drugs consume just under 20% of total medical costs. This was one of the findings reported at yesterday’s afternoon session.
As a monopolistic payer, the state fund (Labor and Industry or L&I) has a lot of power, share, and regulatory authority about which payers in other states can only dream. L&I has a tight formulary, strict generic mandate, tight limits on physician dispensing, bill submission and processing, fee schedule and other controls that undoubtedly help keep drug costs quite low.
Generic fill is at 88%, well above almost all other payers.
While many of these programs/regs/policies might well be helpful in other states, remember they are in place in a state dominated by one very large payer. Pharmacies don’t wonder where to send their bills nor if a drug will be covered. They also know howuch they will be paid and when. Eligibility is quickly verified. Physicians are well aware of the formulary and generic mandate.
Most of these are only possible in a monopolistic state.
That was precisely the point made by the last speaker, PMSI CEO Eileen Auen.
Eileen reported that theres no difference in generic efficiency berween states with and without generic mandates.
Regarding fee schedules, Auen noted that there’s no correlation between low fee schedules and drug costs, citing data indicating California which has the lowest fee schedule, has costs right at the median. New York which also has an extremely low fee schedule, exhibits costs in the highest quintile.
Nov
17
