Payers Spend Now on High-Cost Meds, Save Later

Making medications more affordable to patients is linked to better adherence, according to a new study.

The study, published in Health Affairs, showed that insurers should charge patients less-or even make free-the drugs that could help them most. And, although this approach means an increase in insurers’ drug spending, the added drug cost wouldn’t drive up total expenditures. In fact, the incremental drug spending would usually be completely offset by decreases in spending for hospitalizations and other healthcare services, the study found.

This value-based insurance design (VBID) approach led patients to fill their prescriptions more often. VBID is a strategy that reduces cost sharing for high-value services and increases consumers’ out-of-pocket spending for low-value care, according to the study.

Senior study author Mark Fendrick, MD, director of the Center for Value-Based Insurance Design at the University of Michigan, and one of the originators of the VBID concept in the early 2000s, and colleagues performed an updated systematic review that evaluated the effects of reducing consumer cost sharing on medication adherence and other relevant outcomes. They conducted searches in key online databases and looked in detail at 21 studies that measured the impact of VBID-style prescription drug plans compared with more traditional plans. The studies were all conducted in the past 10 years and held to a strict standard for evidence review.

The studies looked at the impact of VBID-style copays and co-insurance, in which patients pay less, or nothing, for drugs that are known to provide high value for people with certain chronic conditions, such as diabetes, high blood pressure, high cholesterol, and asthma

“If you want your patient with diabetes to get their blood sugar and hypertension under control, please don’t enroll them in a plan that makes it difficult to afford those drugs that manage their conditions,” says Fendrick, professor of internal medicine at the University of Michigan Medical School and of health management and policy at the School of Public Health. “Patients should not have to have a bake sale or a create a kickstarter campaign to be able to pay for their essential medications.”

Related: Study defines ‘low-value care,’ evaluates toll on healthcare industry

Fendrick and colleagues examined the impact of low out-of-pocket costs for patients on their medication adherence, measured by how much of the medication the patient had obtained compared with the duration of the prescription. They also looked at what the studies found about healthcare spending, use of healthcare services, and clinical outcomes and quality for patients in VBID plans compared with those with non-VBID plans.

The findings

Among the findings:

• All of the studies that examined diabetes drug use showed a significant increase in drug adherence with a VBID design-although in some cases it occurred in tandem with coaching or a disease management program.
• Nearly all of the studies of VBID designs for blood pressure medications (ACEs, ARBs and beta blockers) showed improvement in adherence
• All the studies of statins to lower cholesterol levels showed improvement in adherence with the VBID option.
• Two of the five asthma studies showed an increase in adherence.

Nine of the studies looked at healthcare spending for the patients in VBID plans compared with those in conventional plans.

Additional findings:

• Most of those studies showed that the insurer experienced increased prescription drug spending

• Three of the studies showed that patients’ out-of-pocket costs dropped significantly.
• When total costs were reported, two studies showed decreases in spending; seven showed no difference, suggesting that increased spending on drugs was offset by decreased spending elsewhere.

“The study’s proof-of-concept is important to healthcare executives because the benefits of improved adherence come a not added cost and in some situations led to a net savings,” Fendrick says. “A federal requirement that eliminates consumer out-of-pocket costs for high-value preventive services such as immunizations and cancer screenings is extremely popular. However the uptake of a similar approach for pharmaceuticals had been hindered by cost concerns. It is my hope that the study results remove this apprehension and lead to additional VBID implementation.”

A call to action

Fendrick has a call to action for payers: “As you move from fee-for-service reimbursement to alternative payment models that encourage your clinicians to provide more of certain services, please make sure that patients incentives are aligned with providers around the quality of care,” he says.

In addition, Fendrick says, “Since the increased use of high value drugs added no extra cost, it is my hope, that payers would choose a preventive treatment, instead of treatment of disease complications-a good example would be spending on statins in lieu of stents to treat coronary heart disease.”

The authors note, however, that they did not find enough evidence to say that VBID-style plans improve patient outcomes or the quality measures that are used to assess healthcare systems - but that this was a fault of how the studies were designed, not the VBID concept. Future studies of VBID plans should include more measures of how patients fared longer term.