An interesting study at Geisinger Health was just released this week regarding value based insurance design (VBID) for chronic condition management:
3. Chronic illness patients don’t always realize the full benefits of treatment because 50 percent of those patients don’t take the medications as prescribed. One reason why they don’t adhere to the program is the copay cost.
4. Even low out-of-pocket costs can lead to drug therapy non-adherence.
My first reaction to that is “no shit”. We have all heard of numerous stories of people reducing doses of control medication because they are choosing between medication and the heating bill or medication and tuition, medication sometimes loses, especially if the person is feeling “okay” at the time of the decision. As I wrote very early on, a good friend in college had a couple of in-patient behavioral health voluntary hospitalizations because she was trying to stretch out her medication. Medication compliance is a very good predictor of outcomes so non-compliance often will lead to worse health.
Geisinger has a few more details that stood out to me:
A Geisinger study published in the February 2016 issue of The American Journal of Managed Care shows that instituting a zero prescription co-pay for its chronically ill employee population resulted in a positive cost saving and return on investment….
results of the Geisinger study indicate that a zero co-pay drug program for its chronically ill employee population was associated with positive cost savings and a return on investment of 1.8 over five years….
And that is the great challenge of VBID. It can be very profitable for the insurer if and only if they are able to capture the gains. Geisinger’s study was on its own employees, so they were capturing the gains by lower compensation costs and lower internal transfer pricing of premiums. This was a good deal for them. Evil MegaCorp contracting with Mayhew Insurance for fully insured products would not see significant cost savings in the first year as the odds of an adverse medical event leading to hospitalization or ER utilization are fairly low and there is an increased pharmacy spend. Furthermore, if the product is fully insured, the risk pool will eat most of the savings up. If Evil MegaCorp is a self-insured entity with an ASO contract with an insurer to just process the paperwork, this type of benefit design could make sense.
The most likely spot where an insurer can make money on good VBID with higher pharmacy spending displacing lots of inpatient utilization is through better HEDIS and CMS quality stars. Higher quality insurers get Medicare payment bonuses from CMS, so this would be a direct financial gain for an insurer with this type of VBID.
The other route for widespread adoption of this type of design would be to certain pharmacy codes for certain diagnosis codes to be added to the US Preventive Care Task Force A or B list. Those are the services that are deemed to be effective preventative services which cost sharing can not be applied against. That would probably mean the Exchange plans would not see this type of design until 2018.
The overarching point is that there are lots of ways to avoid being stupid, and making it easier for people with expensive chronic conditions that can be controlled to adhere to doctor’s orders is not a brilliant piece of system transformation, it is just not being stupid.
Linda Featheringill
If it is determined that folks with specific chronic conditions are more likely to be noncompliant, good medical practice would be closer followup with blood tests to determine the levels of the medication.
dr. bloor
@Linda Featheringill: Not all medication levels can be tested that way, and low levels aren’t necessarily a result of noncompliance.
Cheaper and easier would be a phone call or another communication means to remind people to take their meds. Some patients actively rebel against their medication regimens; more often, they’re just forgetful or blasé about it, and will respond to a polite nudge.
I'mNotSureWhoIWantToBeYet
Couldn’t one predict that there is no health up-side for co-payments on prescription medications? Sure, a small co-payment for a doctor’s visit can make some sense (e.g. to keep hypochondriacs from going to the doc immediately when they get the sniffles), but when one gets a prescription it’s (at least supposed to be) for a medically necessary treatment. Putting up any additional barrier at all between the patient and treatment at that point is guaranteed to reduce the number of people who take the treatment.
There should be no co-payment on any prescription medicines, if we’re interested in cost-effective treatment.
That’s what my gut tells me anyway.
Cheers,
Scott.
? Martin
@I’mNotSureWhoIWantToBeYet:
That’s probably overstating it. Antibiotics are prescription medications and they are still heavily overprescribed because patients demand them.
The point of copays is when consumers have a choice opportunity, that the copay nudges them in a particular direction. Prescription medication still has some choice component, for certain medications, but yeah, in the case of chronically ill patients, there’s no choice there – or there shouldn’t be.
The trick is how to classify medications into these categories, and you could probably do it by surveying physicians anonymously. They could easily reach consensus on whether a medication is necessary or if the patient could reasonably do without it.
Linda Featheringill
@dr. bloor:
You’re right. Gentle encouragement can accomplish a lot. Mixed with praise.
It would also show that someone cares. People with chronic conditions are not always sure that anyone cares about their problems.
Mnemosyne
@dr. bloor:
Ironically, this post reminded me that I’d forgotten to take my Concerta this morning (luckily, I keep booster Ritalin at my desk, so I won’t drive my coworkers nuts).
I think Richard has linked to articles before showing that patients with chronic conditions who are assigned to a nurse who regularly checks in with them by phone or in person are more compliant. Of course, people cost more than pills, so we can’t have that.
japa21
@Linda Featheringill: Which is why many insurance companies have people whose whole job is to do just that: call people with chronic conditions to make sure they are following up on MD visits, meds, etc. They know the cost of doing that is less than the cost of more expensive treatment resulting from noncompliance.
Richard Mayhew
@japa21: But the best evidence is that phone calls are fairly limited… face to face is where the cost savings are for medical management
dr. bloor
@Mnemosyne:
Must…suppress…laughter…
Every now and again I’ll have someone come in for an evaluation and they’re late because they forgot they had the appointment. It’s all I can do to keep from saying, “OK, I think I have all I need here.”
Southern Goth
Those two sentences are doing a lot of work and it doesn’t necessarily follow why self-insured Evil Megacorp realizes that it’s cheaper to pay for prescriptions for chronic conditions than Mayhew Insurance.
The other point is that hospitalization and ER utilization are all too often how chronic conditions are discovered. This can allow for some fantastic claims of ROI by “Disease Management” programs.
Marc
For the guys, there is the ‘I feel fine’ fallacy that our S/O’s have to deal with. I monitor my BP, since there are no physical symptoms of any problem until readings shoot up into the danger zone. I take my meds, and I ‘feel fine’, but this is a chronic condition for which noncompliance would have severe consequences. Same with folks who have diabetes. Regular appointments, monitoring, and compliance with prescriptions (even when they ‘feel fine’) keeps expensive treatments at bay. Low or zero dollar medication copays for folks who have similar conditions only makes sense, since the cost of noncompliance can be catastrophic. Seems penny wise and pound foolish for insurers to not go this route, but probably they hope those patients will be somebody else’s problem when things go south.
Mnemosyne
@dr. bloor:
When I went in for my big evaluation, I was careful to make it clear that when I go back inside to make sure I turned the oven off, it’s because I have a well-founded fear of forgetting something like that, not an OCD ritual. Apparently it’s quite common for untreated adult ADHD patients to be mistaken for OCD patients because they’ve had to set up so many routines to keep their lives running.
Frnak Goodmanni
@? Martin: and India creates resistant bugs because any co-pay renders the pills too valuable to not resell before the regiment is completed.
w3ski
In my rural Ca. area I was assigned Physical Therapy at the local hospital in my county of residence. That is over an hour away on a bad road. I have no income and cannot pay my housemate the gas that would cost. The closer hospital in a neighboring county was not an option.
The treatment was free but the access was too expensive on my limited income.
w3ski