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March 6, 2015

Physician Dispensing: Costs, Consequences

Summary:

Drug prices, under physician dispensing, have come down significantly after reforms but remain much higher than at retail pharmacies.

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At WCRI 2015, the panel of Vennela Thumula (Workers Compensation Research Institute), Dongchun Wang (WCRI) Alex Swedlow (California Workers’ Compensation Institute) and Artemis Emsilie (myMatrixx) tackled physician dispensing.

Eighteen states have made changes to their rules regarding physician dispensing, with a focus on pricing. Four states (Pennsylvania, North Carolina, Tennessee and Florida) also put limits on the timeframe in which physicians could dispense.

According to WCRI studies, the prices paid for medications dispensed by physicians decreased significantly after regulations were reformed. However, the prices paid after reforms were still significantly higher than for the same drug from a retail pharmacy.

The exception was Ilinois, which saw the costs of physician-dispensed medications increase after reforms. This appears to be because of a change in prescribing patterns as physicians shifted to reformulated medications, which reimbursed at a much higher rate. So, it was this change in prescribing patterns that caused the cost increase, not the reform bill.

Another study focused on whether physician dispensing increased opioid use. The results were somewhat inconsistent. There was an increase in pharmacy-dispensed stronger opioids, but overall the number of prescriptions for stronger opioids dropped. However, the frequency of physician-dispensed nonsteroidal anti-inflammatory drugs (NSAIDs) and weaker opioids increased slightly post-reform. Overall, there appears to be a drop in the total opioid prescriptions after physician-dispensing reforms, but not as significant as you would expect.

A study by CWCI focused on whether injured workers had adequate access to retail pharmacies. Access was clearly not an issue, as almost all injured workers had multiple pharmacies within a short distance of their homes. The CWCI study also showed a greater delay in return to work and an increase in overall claims costs when there were physician-dispensed medications. This increase in costs was not simply the increased cost of medications but also increased disability and more frequent office visits.

The final speaker focused on differences between workers’ compensation and the commercial marketplace with regard to physician dispensing. The biggest difference is that on the group health side the process is integrated. The focus is on speeding the care to the patient, not increasing the overall costs. The group health physician checks the insurance formulary and drug utilization protocols prior to dispensing. In workers’ comp, these different processes are siloed. The main reason for physician dispensing in workers’ compensation is the increased profits to the physicians, not integrated speed of patient care.

Audience members reminded everyone that the focus around management of opioids needs to be mostly on the appropriateness of the medication, not who is doing the dispensing.

There was a recent New York Times article on this subject that I encourage readers of this blog to review.

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About the Author

Mark Walls is the vice president, communications and strategic analysis, at Safety National. Mark is also the founder of the Work Comp Analysis Group on LinkedIn, which is the largest discussion community dedicated to workers’ compensation issues.

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