|
|
|
|
|
|
|
|
|
|
  |
According to the study, when asked to pay more for prescription drugs, consumers cut their spending across the board, regardless of how much they needed a given drug. For example, adults in cost-sharing plans were three times less likely to buy antibiotics prescribed by their doctors. Thus, higher deductibles might save employers in the short term but might ultimately discourage employees from taking the medication necessary to help them lead healthier lives—undermining the very reason for providing the plan in the first place.
A
Fuller Picture
While it is true, for example, that prescription drug costs have been rising at a faster rate than health premiums in general, it is also true that drug costs are a relatively small proportion—11 percent—of total national health care spending. The figure appears in a recent survey by the Kaiser Family Foundation, a nonprofit health research organization based in Menlo Park, Calif. Also, prescription plan increases have been trending downward. Drug coverage costs rose 11 percent in 2003, down from increases of about 20 percent per year in the late 1990s, according to the Kaiser report. In short, employers have been taking steps to modify prescription plans for some time, and these seem to be having an effect. The steps involve shifting more costs to employees in various ways. Among them:
Moreover, it appears that the traditional three-tiered co-pay system has been having an effect on holding down the escalation of drug costs, according to Paul Ginsburg, president of the Center for Studying Health System Change, a consulting firm in Washington, D.C. In a recent article on health care costs in the journal Health Affairs, Ginsburg says that three-tier plans have been effective in steering consumers toward generic drugs, and the higher co-payments for nonpreferred (as opposed to preferred) brand-name drugs are forcing drug manufacturers to be more hesitant about raising prices. In 2004, for example, manufacturers raised their prices 3.3 percent, down from the 5.2 percent increases seen in both 2002 and 2003. Ginsburg says he fears that a movement away from co-pays could prove to be a strain on both employees (if they cut back on needed medications) and employers (if productivity slips because workers’ health declines). Under the current system, employees can still get even the newest drugs at a reasonable price: The average co-pay for nonpreferred drugs is just $35. “The tiered system, which is now the norm, is not interfering with the basic medical decisions of doctors or patients,” says Ginsburg. “But there’s no doubt that a large deductible would.”
Sidestepping the Drawbacks
In effect, those insurers are liberally interpreting Internal Revenue Service (IRS) guidance on HSAs in 2004 that lets health plans provide first-dollar coverage (no deductible is applied) for preventive medications. Examples listed by the IRS include statins for patients with high cholesterol and ACE inhibitors for stroke victims. A health plan can have a traditional tiered co-pay arrangement—separate from the HSA-mandated deductible—for employees to use for drugs designated by the plan as “preventive.” Aetna announced last July that it would give employers the option of providing first-dollar coverage for drugs used for five major conditions: asthma, diabetes, hypertension, high cholesterol and osteoporosis. Some of those drugs, such as antidiabetics and antiasthmatic agents, do not actually prevent illness but rather treat prevalent chronic conditions. Robin Downey, head of product development at Aetna, says the new policy is a response to the unwillingness of some large employers to offer HSAs without such a provision. “We met with Treasury and told them this is what we are going to do,” Downey says. “My sense is that the IRS is not going to interfere with anything insurers do as long as they can back up their decisions with research.” Although HSA plans account for only about 50,000 of Aetna’s 14.5 million covered lives, the company typically provides first-dollar preventive coverage for other services, such as annual checkups, so it decided to apply the same philosophy to the use of prescription drugs. Says Joseph Newhouse, a professor at Harvard Medical School who worked on the RAND study and is a member of Aetna’s board of directors: “Modifying cost-sharing for chronic drugs that patients should be on makes high-deductible plans conceptually smarter.” Although Aetna is the only major insurer providing first-dollar drug coverage in HSA plans, a few regional insurers are taking the same approach. For example, Destiny Health, a Chicago-based company that offers consumer-directed plans in six states to firms with 300 or fewer employees, provides first-dollar coverage for 10 common conditions ranging from asthma to seizures. “That’s how our medical advisory board recommended that we apply the IRS principles,” says Stuart Slutzky, the firm’s vice president for group products. Employees enrolled in a Destiny plan, like those with Aetna, pay the same co-pay regardless of whether they have already reached the deductible. The co-pays under the Destiny plan are $10 for a generic drug, $25 for a preferred brand and $45 for a nonpreferred drug.
Educating Rx Consumers
Blue Cross and Blue Shield of Florida, for example, offers drug coverage in its consumer-driven BlueOptions plan and does not yet require that drug costs be included under the plan’s deductible. But like many health insurers, the company posts information about drug effectiveness in general on its web site—available to all of its health plans’ participants—to identify less costly alternatives to pricey brand-name drugs. In addition, each quarter members of BlueOptions receive a Personal Health Report that reviews their drug purchases and offers concrete suggestions on drug usage, including, for example, specific questions to ask their doctor, such as, “How long do I need to be on X drug?” Says Carey Hepler, director of innovation and analysis at BC/BS of Florida: “We wanted to make our product as personalized as possible.” Likewise, pharmacy benefits managers (PBMs)—companies that administer drug plans—also now see themselves as purveyors of critical information. National Medical Health Card Systems Inc., an independent PBM based in Pittsburgh, offers both telephone support and Internet-based services to help consumers understand the economics of their prescription drug choices. Robert J. Kordella, the company’s chief clinical officer, says PBMs must play an advisory role, keeping consumers up to speed about the “availability of clinically indifferent choices” such as generic equivalents of brand-name drugs. With co-pays, “consumers were essentially making their decisions with other people’s money,” he says. “They now need to understand the economic consequences of their decisions.” Another outgrowth of the high-deductible influence on prescription drugs is decision-support providers, which focus exclusively on helping consumers weigh their prescription drug options. One such firm, Chicago-based Rxaminer, charges its clients—mainly large employers and health plans—a monthly fee to give employees access to its database of clinical and price information. A person taking Lipitor, for example, can look up both the relative cost and the benefits of all drugs in the statin class.
A
Legislative Prescription
Relland says that in a survey of 764 large and small employers, the council’s HSA working group found that the significant change in prescription drug coverage under HSAs—namely, the high deductible—was the main reason for their unwillingness to offer the plans. The council backs a proposed change in tax law that would allow HSAs to carve out a separate plan for covering all prescription drugs. “This won’t happen tomorrow,” Relland says, “but a broad conversation has begun.”
|
|
| ADDITIONAL RESOURCES FOR THE NEW HEALTH INSURANCE SOLUTION |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
 |
 |
 |
 |
 |
 |
 |
 |
 |
