New Lockton Report Analyzes Prescription Drug Abuse and Its Effect on Workers' Compensation

Lockton expert shares insights on the damage opioid abuse can do to the cost and effectiveness of pharmacy benefit programs

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Sep 20, 2012, 04:12 ET

KANSAS CITY, Mo., Sept. 20, 2012 /PRNewswire/ -- There has never been a more damaging impact on the cost of workers' compensation claims from a single issue than the abuse of opioid prescriptions for the management of chronic pain, according to a new report from Lockton.

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The report—titled Opioids Wreak Havoc on Workers' Compensation Costs—seeks to update employers on current trends related to the growing issue of prescription drug abuse and how it affects the cost. Some insights from the report include:

An estimated 55 to 86 percent of all claimants are receiving opioids for chronic pain relief.
Pharmacy is growing disproportionately to total medical costs. Pharmacy only accounted for about two percent of all medical costs n 1990. Today, on average, workers' compensation prescription drugs account for 19 percent of the total medical spend.
Opioids account for an average of 25 percent of the overall pharmacy spend, and 35 percent (or more) for claims more than three years old.

"The aggressive prescribing of opioids to treat chronic pain is a relatively new phenomenon in workers' compensation's 100-year history; an epidemic affecting all of society and workers' compensation in particular," wrote Keith Rosenblum, senior risk consultant for Lockton.

He added, "Employers simply don't know what they don't know about workers' compensation pharmacy and how it seriously impacts their bottom line. The reason is that between 40 to 50 percent of pharmacy is dispensed and billed by physicians, and that third party administrators (TPAs) simply do not know what the employer is actually spending." If the employer and TPA are not managing the spend, they certainly can't manage the appropriate clinical utilization of the drugs by treating doctors.

The report outlines a series of best practices to help risk and claims managers curb the problem.

You can get the full report free at www.lockton.com or the full link is http://www.lockton.com/Insights-And-Publications/White-Papers/Opioids-Wreak-Havoc-on-Workers-Compensation-Costs.

In addition, there is an extended version of this report called Risk and Claims Managers' Comprehensive Guide to the Management of Pharmacy Benefits that is available by contacting your Lockton representative.

About Lockton
More than 4,450 professionals at Lockton provide more than 15,000 clients around the world with insurance, benefits, and risk management services that improve our clients' businesses. From its founding in 1966 in Kansas City, Missouri, Lockton has attracted entrepreneurial professionals who have driven its growth to become the largest privately held insurance broker in the world and 9th largest overall. Independent researcher Greenwich Associates awarded Lockton its 2011 Service Excellence Award for risk management for large companies. For three consecutive years, Business Insurance has recognized Lockton as a "Best Place to Work in Insurance." To see the latest insights from Lockton's experts, check Lockton Market Update.

SOURCE Lockton