Wednesday, May 12, 2004
Tailoring co-pays may be the wave of the future
["Employers Tinkering with Drug Co-Pays to Reduce Costs," Daily Policy Digest, NCPA, 12 May 2004.]
Sometimes, counter-intuitive approaches make the most sense. Certainly in health care, one-size-fits-all measures are rarely ideal, and companies are beginning to realize this. By differentiating between health groups, some are actually able to lower costs while reducing co-pays:
Rising health-care costs are forcing some employers to increase employee co-pays, with the hopes that employees will use their dollars more wisely. However, Pitney Bowes Inc. actually reduced co-pays for asthma and diabetes drugs to 10 percent. As a result:
- The median cost of a diabetes patient fell by 12 percent -- for an asthma patient, 15 percent.
- Emergency room visits by employees dropped 35 percent among diabetes patients, and 20 percent among asthma patients between 2001 and 2003.
- The company estimates its new co-pay system will save the company $1 million in 2004.
Most employers are more likely to increase co-pays, fearing that providing more coverage will increase their costs. Indeed, a Rand Corporation study shows that doubling patient co-pays from $5 to $10 reduces the average annual drug cost per worker by 22 percent.
However, the challenge is determining at what point employees will stop purchasing drugs when faced with higher co-pays. A study done by Harvard Medical School and Medco Health Solutions published in the New England Journal of Medicine indicated that making drastic changes to co-pays, such as switching from a one-tier to a three-tier system showed that:
- Sixteen percent of patients taking third-tier ACE inhibitors stopped treatment, while 21 percent of patients taking the most expensive cholesterol drugs stopped their treatments as well.
- More modest increases ( say, moving from a two-tier to a three-tier co-pay system) resulted in very few patients stopping treatments altogether.
Health experts believe that tailoring co-pay plans to different disease areas is the wave of the future, either through various co-pay tiers or even replacing co-pays with generic drugs.
["Employers Tinkering with Drug Co-Pays to Reduce Costs," Daily Policy Digest, NCPA, 12 May 2004.]
Sometimes, counter-intuitive approaches make the most sense. Certainly in health care, one-size-fits-all measures are rarely ideal, and companies are beginning to realize this. By differentiating between health groups, some are actually able to lower costs while reducing co-pays:
Rising health-care costs are forcing some employers to increase employee co-pays, with the hopes that employees will use their dollars more wisely. However, Pitney Bowes Inc. actually reduced co-pays for asthma and diabetes drugs to 10 percent. As a result:
- The median cost of a diabetes patient fell by 12 percent -- for an asthma patient, 15 percent.
- Emergency room visits by employees dropped 35 percent among diabetes patients, and 20 percent among asthma patients between 2001 and 2003.
- The company estimates its new co-pay system will save the company $1 million in 2004.
Most employers are more likely to increase co-pays, fearing that providing more coverage will increase their costs. Indeed, a Rand Corporation study shows that doubling patient co-pays from $5 to $10 reduces the average annual drug cost per worker by 22 percent.
However, the challenge is determining at what point employees will stop purchasing drugs when faced with higher co-pays. A study done by Harvard Medical School and Medco Health Solutions published in the New England Journal of Medicine indicated that making drastic changes to co-pays, such as switching from a one-tier to a three-tier system showed that:
- Sixteen percent of patients taking third-tier ACE inhibitors stopped treatment, while 21 percent of patients taking the most expensive cholesterol drugs stopped their treatments as well.
- More modest increases ( say, moving from a two-tier to a three-tier co-pay system) resulted in very few patients stopping treatments altogether.
Health experts believe that tailoring co-pay plans to different disease areas is the wave of the future, either through various co-pay tiers or even replacing co-pays with generic drugs.
Comments:
Post a Comment
