Drug Repackaging Bill Not Ready for Prime Time for Good Reason
Around the State
Repeat bad information often enough and it sticks. Luckily, though, some senators are getting wise to a bogus pitch coming from a coalition of business groups and the insurance industry.
Last Thursday, Senate Health Regulation Committee Chairman Rene Garcia, R-Hialeah, postponed a vote on a bill restricting the price physicians can charge workers' comp patients for repackaged drugs.
He did it because he sensed he might not have the votes to move the bill along, that 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.
The numbers plain don't add up.
The insurance industry claims that physicians overprice for dispensing drugs in their own office. It claims 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' comp rates.
Folks, it would not save the state $62 million.
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.
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. Which is it? Does anybody know?
Every time a member of a pertinent House or Senate committee asks for the carfax on this measure, HB 511 or SB 668, they get gang-banged 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.
Looking at the background on this bill, perhaps some of the senators are having trouble with the "trust me" school of legislating on SB 668.
There's only one fair way to add up the numbers on this bill, 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.
- What is the difference? It works out to $16 per prescription. Doctors who prescribe are charging $16 per prescription more across the universe of all prescriptions for workers' comp in Florida.
- That $16 difference comes to $8 million -- not $62 million, as the bill's lobbyists would have you believe. And quite frankly, that $8 million will drop further when the 2011 figures come out, with the elimination of Class 2 and Class 3 drugs -- Oxycontin and the like.
"Doctors aren't Walgreens, they can't buy-in hundreds of thousands of pills at one time to keep their prices down," said Derek Edson, a retired Fort Lauderdale osteopath who has cared for hundreds, perhaps thousands, of workers' comp patients. "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."
Why does Florida need a cap for dispensing physicians? Beats me.
Florida is a carrier-directed state. The state can order a workers' comp patient to see a specific doctor. The state can order a patient to see only a doctor who sends his patients to a pharmacy to get a prescription filled. But it doesn't. It doesn't because Edson is correct. Patient outcomes are infinitely better when doctors prescribe. Employers know it and so does the state.
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."
Panza says it all. Senators, do the math. You'll have to -- the bills' sponsors most certainly have not.
Reach Nancy Smith at firstname.lastname@example.org or at (850) 727-0859.