Physician Dispensing: Even More Expensive Than You Think

Fantastic research piece on the costs of physician dispensed medications from CWCI's Alex Swedlow, Laura Gardner, and John Ireland.

The statistics are compelling on many levels. 

No, there doesn't appear to be any overall claim cost savings associated with physician dispensed medication (as those that dispense medications have claimed).  In fact, claims involving physician dispensed medications exhibit 16.9% greater medical costs and 13.2% greater indemnity costs. 

While that data is troubling, I was more truly surprised by the contrast between the pre-2007-reform and post-2007-reform data sets.  While the percentage of claims which included physician dispensed medications dropped from 28% of claims to 6% of claims, the differential in medical and indemnity spend was actually exacerbated.  The pre-reform difference in medical spend was 16.4%... the post-reform differential jumped to 37.3%.  The pre-reform difference in indemnity spend was 6.9%... the post reform differential jumped to 28.2%. 

At about the same time that Mr. Swedlow was discussing this report in Boston at the Physician Dispensing Summit, I was in South Carolina presenting to a roomful of adjusters, case managers, attorneys and doctors at the South Carolina Workers' Compensation Education Conference.  As part of my presentation, I made mention of the CWCI report and its findings.  I'll share with you exactly what I shared in Charleston:

Just because you limit the physician's ability to charge outrageous prices (which South Carolina has done) doesn't mean you have eliminated the problem.  Don't take your eye off the ball.  There may be fewer cases in the future for which physicians dispense meds, but these claims can be real cost drivers if not monitored very closely. 

Michael
On Twitter @PRIUM1