California has one of the highest levels of physician dispensing of repackaged medications in the U.S., a practice that a new study shows may raise treatment costs and lengthen return-to-work time.
A decade-long study by the California Worker's Compensation Institute (CWCI) shows that between 2002 and 2011, physician-dispensed drugs made up 55 percent of all outpatient prescriptions and nearly 60 percent of total prescription drug payments; and an independent multi-state survey showed that, as of 2011, California still had the highest level of physician dispensing across the 16 reviewed regions.
In physician dispensing, a qualified doctor gives a patient the initial doses of a prescription drug during an office visit. Physicians say this improves access to prescription services and encourages compliance with prescription schedules, leading to better medical and disability outcomes.
However, the CWCI study shows that cases involving physician-dispensed repackaged drugs had 17 percent higher medical-benefit costs, 13 percent higher indemnity costs and 9 percent more lost-time days than similar claims that did not utilize the practice.
Meanwhile, the use of physician-dispensed drugs to treat injured workers grew between 2002 and 2006, when a loophole in state regulations allowed doctors who dispensed drugs in-office to obtain higher payments for the same medications that the price paid for them in a pharmacy.
According to the CWCI, injured workers in California have a choice of up to five pharmacies within 2.2 miles of the dispensing physician's office, offering evidence that injured workers are not precluded from easily obtaining their medications if not taken during a doctor's visit.
In February 2007, the state Division of Worker's Compensation tried to counter the effects of the loophole by revising the pharmacy-fee schedule in a way that would eliminate the pricing differential between pharmacy-obtained drugs and those administered by the physician.
Almost immediately, says the CWCI, both the amount of prescriptions and the price paid for them decreased, declining by more than 90 percent by 2011.
Overall, paid medical benefits on 2002 to 2011 claims with physician-dispensed repackaged drugs averaged $6,017 ($5,524 pre-reform, $7,297 post-reform), or 17 percent more than the $5,145 average for claims without these types of prescriptions ($4,747 pre-reform, $5,316 post-reform).
Indemnity payments for claims with physician-dispensed repackaged drugs averaged $4,229 prior to the reform and $5,039 after March 2007, for a 10-year average of $4,455 — 13.1 percent more than the $3,937 10-year average for claims without these prescriptions.
The claims with physician-dispensed repackaged drugs also involved longer periods of disability, averaging 37.6 paid days pre-reform, and 50.3 paid TD days post-reform, for a 10-year average of 44.1 paid days off. That is 8.9 percent more than the average of 40.5 days (36.3 days pre-reform, 46.2 post-reform) for claims without physician-dispensed repackaged drugs.
Additionally, among 2002 through 2011 claims with the presence physician-dispensed repackaged drugs, each prescription added $482 to the average amount paid in medical benefits per claim.
More research needs to be done in order to monitor the effects of physician dispensing upon patient care and compliance with treatment, CWCI says.
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