Opponents of doctor drug dispensing say math doesn’t add up

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Last Thursday Senate Health Regulation Committee Chairman Rene Garcia, R-Hialeah, postponed a vote on a bill (HB 511and SB 688) restricting the price physicians can charge workers comp patients for repackaged drugs.

As reported by Nancy Smith of Sunshine State News, “He did it because he sensed he might not have the votes to move the bill along, maybe a majority of senators on the committee are beginning to realize they’re being hustled. Good for them. They’re being good and hustled.”

“Repeat bad information often enough and it sticks”, reports Smith. “Luckily, though, some senators are getting wise to a bogus pitch coming from a coalition of business groups and the insurance industry.”

The insurance industry claims that physicians overprice for dispensing drugs in their own office. They claim that if the price of those drugs were capped at three times the drug manufacturers’ wholesale price, plus a $4.18 dispensing fee, as pharmacy-dispensed drugs are now, it would save the state some $62 million in workers’ compensation rates.

“Folks, it would not save the state $62 million,” says Smith. “In the first place, the rationale for that figure, the formula, doesn’t exist. It’s a mirage, a hallucination, a rabbit the National Council on Compensation Insurance pulled out of a hat.”

Some confusing figures: In March 2010 the NCCI said savings to the state would be $34 million; in April 2010, $100 million; and since March 11, 2011, $62 million. Well, not all of these can be correct.

Opponents say that every time a member of a pertinent House or Senate committee asks for the facts on this measure, HB 511 or SB 668, they get bombarded by the insurance and business lobbies, who refer to a 1,000-page NCCI report that includes “not a single one of the insurance industry’s guesstimates.”

“There’s only one fair way to add up the numbers on this bill, Smith reported, “and that is to assess the universe of claims:

  • You take the total number of claims, direct from statistics on page 83 of Chief Financial Officer Jeff Atwater’s 2010 pharmaceuticals report. That total is $186 million.
  • Now you take the total number of claims in which drugs were dispensed from pharmacies. That is $120 million.
  • Finally, you take the total number of claims coming from doctors who dispense drugs in their office. That is $63.3 million.
  • Some 1.1 million workers comp prescriptions were filled at pharmacies last year, averaging out to a cost of $121 per prescription.
  • Some 460,000 prescriptions were written and dispensed in doctors’ offices in 2010, averaging out to $137 per prescription.

Smith continues, “What is the difference? It works out at $16 per prescription. Doctors who prescribe are charging $16 per prescription more across the universe of all prescriptions for workers comp in Florida.”

The bill’s opponents report that the $16 difference comes to $8 million, not $62 million as the bill’s lobbyists would have you believe. They also argue that the $8 million will drop further when the 2011 figures come out. This will be caused by the elimination of Class 2 and Class 3 drugs such as Oxycontin.

“Is the savings worth driving prescribing doctors to give up writing their own scripts?” Smith asks. “Doctors have testified over and over again that that’s what would happen if they had to match pharmacy prices with the price of repackaged drugs.”

Derek Edson, a retired Fort Lauderdale osteopath who has cared for hundreds, perhaps thousands of workers comp patients has said, “Doctors aren’t Walgreen’s; they can’t buy in hundreds of thousands of pills at one time to keep their prices down. This is the way we get the best patient outcomes. We get them their drugs instantly—get them back to work as soon as they can. The drugs and how quickly the patient begins a course of them, that’s the key to a full recovery and getting back to work quickly.”

Florida is a carrier-directed state. This means that the state can order a workers compensation patient to see a specific doctor. The state could order a patient to only see a doctor who sends his patients to a pharmacy to get a prescription filled. But it doesn’t.

The bill’s opponents such as Edson agree that patient outcomes are infinitely better when doctors prescribe. They say that employers know it and so does the state.

Smith reported, “What that means is that, theoretically, the state can always—that is, 100 percent of the time—choose to send its workers’ comp. patients to doctors who don’t dispense drugs, who send their patients to pharmacies to fill their prescriptions instead.”

“This is why we don’t need a cap,” argues lobbyist Tom Panza, a Florida attorney for Automated Healthcare Solutions, which offers software to self-dispensing physicians. “We have a failsafe. The state is already in charge of the whole show. If dispensing physicians are so greedy, why doesn’t the state just skip right over them?”

According to the Office of the Chief Financial Officer, in 2010 the total bill in Florida for all physician-dispensed workers’ comp meds was $63.3 million. Panza says, “If we assume we can save $62 million of that, it will leave us $1.3 million to run one-third of a workers’ comp program in the fourth largest state in the nation. That comes to about $2.60 for every prescription. It is totally, utterly absurd.”

Opponents to the bill state that the matter is clear—all you have to do is the math to see that this just doesn’t add up.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.