An article in the New York Times sheds a little light in a dark corner of medicine, the world of workers’ compensation. In particular, it highlights a world of doctors that dispense drugs in their offices, which improves both patient satisfaction and profits.

Though fraudulent insurance claims are always easy headline-grabbers, the real world of workers’ comp is complex and not always so tailor-made for sound bites.

Add to this mix the medical industry’s role.

Doctors in practice loathe disability evaluations. They are time-consuming and require several pages of documentation. After more than a decade in practice, I still fear the repercussions of these assessments.

I’m inclined to want to advocate on behalf of my patients, especially when I know them and trust their stories.

But:

• What if the patient is malingering and I’m unable to ascertain that? That makes me feel as if I’m party to fraud.
• What if the patient is truly disabled and my assessment fails to further their claim? That makes me a failed advocate.

Primary care doctors typically have no specialized training in conducting disability evaluations, and even less understanding of the byzantine world of workers’ compensation.

As a result, most insurance companies now make claimants get evaluated at specialized occupational medicine centers, where the practitioners know exactly what to test for and how to document it to the satisfaction of the insurance companies. Yet there are always unintended consequences to this.

One example, as pointed out in the Times article, is that private equity funds have invested in companies that package or distribute drugs to doctors’ offices. It seems that practices specializing in the business of workers’ comp are particularly suited to be recipients of this investment.

What could private equity be doing in this realm, you ask?

Let’s just say they’re not in it to carry on the traditions of Hippocrates; rather, they see a handsome profit opportunity.

Turns out that most states (43 of them) allow doctors to dispense drugs, and in addition set their own prices on the medication. A handsome mark-up opportunity is thus enabled!

Don’t the patients see through this price-gouging, you ask?

Here’s the rub. Most of the time, health insurance (particularly the company’s workers’ comp insurance) foots the bill. So the patients don’t care! They’re just happy to get medicine as soon as possible after having been evaluated. Besides, so what if the overcharging sticks it to the workplace in which the patient was injured?

Some states have recognized this naked profiteering for what it is. Amazingly, California and my home state of Oklahoma are two of the states that have passed laws forbidding the huge markups.

Let’s face it. When the governments of these two vastly different states are both calling out corruption, you can bet there’s something rotten going on.

John Schumann is an internal medicine physician who blogs at GlassHospital.