Drug Costs Sicken WC Insurers
Workers compensation industry professionals must put a lid on benefit costs by controlling the soaring pharmaceutical bills of injured workers, one top company expert contends.
The advice came from Nancy Brennan, director of product development at Hartford Specialty Risk Services. She spoke on a panel about cost control as part of the national trends track arranged by The National Underwriter Company during the Workers Compensation Educational Conference in Orlando, sponsored by the Florida Workers Compensation Institute.
Ms. Brennan noted that a breakdown of workers' comp claims dollars shows that 55 percent goes for medical expenses against 45 percent for lost wages. Of medical costs, 20 percent relate to pharmaceutical expenses, she said.
Ms. Brennan said prescription drug cost increases have been two-to-five times greater than hikes for hospital care between 1995 and 2000. She cited industry data showing that 50 percent of injured workers are offered prescription drugs, with an average of 2.4 medications prescribed per worker. The average number of refills per prescription, she said, is five, and the average cost per prescription is $63.
Some highly touted, high-powered drugs are so strong, she added, that additional drugs are needed to abate their side effects.
To counter the high cost of prescription drugs, Ms. Brennan suggested:
Hiring pharmacy benefit managers who can negotiate rates.
Using automated systems to red flag some bills.
Offering mail order and pharmacy cards for the purchase of drugs.
Developing quality benchmarking to identify fraud and abuse.
Among the drug types most described for workers comp injuries, she said, are those for pain, at 55 percent. A geographic study of prescriptions associated with worker claims found more treatment with anti-depressants on the West Coast and more narcotic drugs on the East Coast, she noted.
Reproduced from National Underwriter Edition, September 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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