Drugs, Testing, and Incentives

In workers' compensation, if there's a cost to contain, then there are enterprising people willing to sell something to contain that cost which in itself ends up being a cost to contain.

Such it seems with drugs and drug testing.

WorkCompCentral reports this morning the California Workers’ Compensation Institute is preparing to release a report documenting that drug testing is one of the top cost drivers in the state’s workers’ compensation system.

Drug testing became popular not too long ago in response to issues with opioid and other pharmacological abuses.

So popular that it’s become one of the most frequently billed codes in the past one to two years.

Treatment guidelines include drug testing as part and parcel of opioid prescription to monitor use.

For instance, the chronic pain section of California's Medical Treatment Utilization Schedule recommends urine drug testing before and after drugs have been prescribed and the proposed opioid guidelines that the California Division of Workers’ Compensation is contemplating recommend doctors begin regular urine screenings when using opioids beyond the four-week “sub-acute” phase.

As part of this, CWCI has found that in 2012 carriers and self-insured employers paid nearly $98 million for drug testing in 2011, comprising about 2.5% of all medical spending that year. In 2004, employers spent just $508,000 on drug testing.

The sad part of the story is that much of this testing is likely unnecessary if physicians followed guidelines.

CWCI has found that many prescriptions for Schedule II painkillers are for relatively minor injuries, such as sprains and strains, conditions for which the use of opioids is not recommended.

“What our data routinely shows is a large proportion of Schedule II opioids are being used for injuries that really fall outside of the evidence-based guidelines,” Alex Swedlow, president of CWCI, told WorkCompCentral. “Now you’re compounding the issue by testing for the presence or absence of these drugs.”

The WorkCompCentral story also points out that the major drug testing laboratories are in a spitting match in Federal court over allegations that they are incentivizing physicians to use drug testing to maximize profits.

The common denominator in both the escalation of opioid frequency and drug testing is the single point of reference - the physician treating the injured worker.

There are many competing interests for the physician's attention in workers' compensation.

Payment for physician services is tightly regulated and puts stress on medical practices because it is more expensive to deliver work comp care (due mostly to the regulatory burden) but payment rates can be among the most conservative.

Vendors, be they pharmaceutical firms or drug testing laboratories, use this dichotomy to market physicians by offering legal, albeit ethically questionable, ways of recouping or supplementing revenues.

In the middle is the doctor who has to make hard decisions based on experience and business realities as to whether any particular individual is prescribed pain medication (and whether that is delivered via the doctor's office or via a pharmacy) and then followed with testing.

It's not just in workers' compensation that these competing interests exist.

At the heart of the Federal case cited above are allegations that Medicare data shows clinical laboratories accounted for 42 of the top 50 providers in terms of how much money they were paid by the federal government in 2012.

The companies involved in the Federal case both allege that the other used financial incentives to encourage physicians to maximize billings for drug tests.

It's easy to blame physicians because they are the control center. Physicians have the patient, have the control over prescriptions, have the control over drug testing.

It's also easy to blame the drug and the drug testing companies for putting incentives out there to encourage the use of their various products.

This is capitalism working - financial incentives work well most of the time to drive the market to efficient choices.

But in the delivery of medical treatment, where lives and lifestyles are at stake, such incentivizing can be counter-productive. And that's what the data seems to show.