By Hon. Thomas M. Calderon

EDITOR'S NOTE: The Executive has decided, in the interest of public debate, to provide its readers with editorial opinions other than its own. Tom Calderon is a former Assemblyman and Chair of the Assembly Insurance Committee. His clients include those who repackage drugs.

Imagine for a moment that you are an employee of a large supermarket chain at its distribution center. Just before you walk down one of the stacks of products, a forklift driver backs into a pallet of dishwashing detergent. The driver is unaware of the mess he's created, drives away, and there you are flat on your back. You look up feeling a little embarrassed. You struggle to get up, feeling a little dizzy with a large bump on the back of your head.

The next day you can hardly move. You tell the doctor that you have pain in your lower back and numbness that extends down your hip, and the toes on your right foot tingle. The doctor tells you that he will ask for authorization for an MRI, but that will take a week to ten days. Meanwhile, he writes you a prescription because your company is self-insured and prohibits him from dispensing any drugs in his office. So off you go to your local pharmacy.

You painfully get out of the car and limp to the pharmacy order desk. The pharmacy tech asks if you have coverage. You say, "I hurt my back at work yesterday." The pharmacy tech says, "We do not take liens at this pharmacy. But you can pay for the drugs." You think to yourself, "What the heck is a lean?" And you realize you don't have the money to pay for the drugs.

So you just hobble away, grabbing a large bottle of generic aspirin because that is all you can afford to buy.

Getting your drugs after a work-related injury should be the least of your problems, and yet the scenario above is happening because doctors dispensing drugs in their offices have come under fire.

As with every aspect of the system under review, cost seems to be the only concern when it comes to evaluating so-called "reforms." In the case of doctors dispensing in their offices, "reformers" look only at immediate costs to the system without regard to the impact on injured workers.

The drug debate has centered on the so-called "loophole" created by SB 228 allowing doctors to bill at the pre-SB 228 fee schedule, which is 140 percent of the average wholesale price (AWP). But has this loophole raised rates to employers? Absolutely not.

In fact, it was recently reported that $8.1 billion has been saved in the system since the "reforms" and rates are now at 1996 levels.

Part of a fair solution resides in language in SB 228. It says that for drugs not on the Medi-Cal Fee Schedule that the Administrative Director has the authority to create a fee schedule taking into account "comparable resources" and using the "relevant" Medi-Cal Fee Schedule.

But why "comparable resources" and the "relevant" Medi-Cal Fee Schedule? Why did the legislature choose this language? As a former legislative member, I believe it was looking for a specific number to score as savings as part of the overall reforms. That number was $400 million, according to a report by the California Commission on Health and Safety and Workers' Compensation (CHSWC). And, if you look at the Medi-Cal statute, you will find a schedule that is 90 percent of the average wholesale price, which also equates to the $400 million scored by CHSWC.

So what are the costs? A doctor must have a pharmacist's assistant to dispense the drugs, and must maintain a DEA license with all the regulatory requirements that implies. Every pill must be accounted for and very tight inventory controls must be maintained. Moreover, unlike retail pharmacies, doctors cannot buy drugs in bulk and must rely on repackagers to break down the bulk pills into smaller dosages. This process is costly and involves a whole other set of DEA regulations.

Recent attempts to close this loophole have focused only on reducing the cost of drugs to the system without regard to access issues I mentioned above. Any fair solution must include what it actually costs a doctor to dispense that drug. Coverage issues, which sometimes take months to sort out, should not stand in the way of an injured worker's access to care. And, according to SB 899, that worker is entitled to $10,000 of medical care anyway. It seems to me that this drug issue has an easy solution.

We could do as I suggested above by using 90 percent of AWP. Another way would be to increase the handling fee to reflect the costs of dispensing. Whichever solution we pick, we should be rational, fair, balanced and cognizant that human lives will be impacted.