From University of Michigan Health System
Rx for drug dilemmas: Tailor the copayment to the patient Those who could benefit most from medicines pay the least, or even get paid, under new plan
ANN ARBOR, MI - In recent years, most Americans with prescription drug coverage in their health insurance have gotten used to shelling out just a few dollars each time they go to the pharmacy - a small "copayment" set by insurers to cover part of the prescription. This attractive benefit has allowed many easy access to drugs that enhance their health, and has earned the envy of those - including millions of seniors on Medicare - who pay for their drugs out of pocket.
Meanwhile, though, some insurers are raising their copays to offset the recent dramatic rise in drug spending. But now, evidence is mounting that rising copays are becoming too much for some people to afford, even as medical research increasingly shows the clinical benefits of many drugs. And the government is now figuring out how to afford prescription coverage for Medicare participants.
All of this means the time is right, says a team of University of Michigan health researchers, for new "benefit-based" copays that will help get medications to those who need them most, and ultimately may help make prescription drug coverage available to more people. They publish just such an approach in the September issue of the American Journal of Managed Care.
"Right now, we have people who are severely ill paying the same copay for a drugs as someone with a much milder form of the disease. Meanwhile, we're learning more about just how helpful some drugs can be. We need to base copays for drugs on the actual clinical benefit a medication can give an individual, and make this system make sense," says lead author Mark Fendrick, M.D., a U-M Medical School associate professor who developed the idea with colleagues from the U-M School of Public Health.
The benefit-based copay, or BBC, concept developed by the U-M team is already attracting interest from multiple policy, insurance and government representatives.
Under BBC, some people would pay less than others, and those most likely to benefit might even get paid to take their medicine. At first, BBC would only be applied to drugs and diseases for which there is solid evidence that the benefit from a drug is different depending of the patient's severity of illness.
Some examples include cholesterol-lowering drugs (for patients with and without a previous heart attack), osteoporosis drugs (for those with and without a history of fracture), and drugs to prevent asthma attacks (for those who have been hospitalized or not). The same approach could be applied to other diseases and drugs, as evidence accumulates.
For any specific drug, the BBC calculates a different copay for each patient group - those who get the most benefit from the drug (usually the sickest patients) would pay less than those who won't gain as much. The actual dollar amount the patient pays is based on the percentage of patients that falls into each risk group for a particular disease, the relative effectiveness of different drugs for people in each risk group, and the purchase price of each drug.
The system would give patients an additional incentive to fill their prescriptions, and to take them consistently - what health care experts call adherence.
Patients' low adherence - often due to lack of ability to pay for their prescription drugs, or lack of understanding how much the drug can help them if taken correctly - is a major problem today, Fendrick says. Many studies show that less than half of patients take their medications as directed by their physician.
BBC's ability to produce low copays is important. But instead of just lowering the copays for everyone, Fendrick adds, the BBC model is based on lowering the financial bar most for those who can get the biggest "bang for the buck." This low copay holds true even for newer, more expensive drugs, when scientific evidence suggests that the new drug would be a better choice for a patient in the long run. Currently, copays for generic drugs are almost always lower than those for name-brand products prescribed for the same disease; a policy based entirely on cost - not benefit - reasons.
The BBC calculation also takes into account side effects, which may make certain drugs less attractive for those with less-severe disease. And, it has the ability to lower copays further if patients stay on their medication and refill their prescriptions regularly.
"We have tried to develop a system that will enable patients to fill their first prescription, and regularly encourage them to take their medicines exactly as their doctor thinks they should," says Michael Chernew, Ph.D., a co-author and U-M economist with a longstanding interest in prescription drug utilization in managed care.
The BBC concept builds on clinical research accumulated over several years, and incorporates current trends in medicine. "The newly increased emphasis on evidence-based medicine, and on the use of medical evidence to establish national guidelines for the treatment of patients with heart disease, diabetes, and other conditions, make this concept timely," says Dean Smith, Ph.D., a U-M professor of health management and policy who collaborated on the research.
He notes that copays for appropriate drugs could be based on new heart disease prevention guidelines that divide patients into groups based on their blood cholesterol levels, diabetes treatment plans based on blood sugar levels, or heart failure groups based on physical ability.
But even if the patients' cholesterol or blood sugar levels go down or their symptoms improve as a result of the medications, their copays could be made to stay low in order to encourage them to stay on the drugs and prevent heart attacks or worse.
The coming rise of computer-based prescription systems in American hospitals and doctors' offices should help with the implementation of BBC, too, Fendrick predicts. Physicians will be able to have the latest evidence for drugs' effectiveness at their fingertips, guiding them to give patients prescriptions for the drugs that will work for them, and not for those that won't. This could be a clear advantage over health plan formulary decisions that are often based on drug prices, not what would work best for each patient.
The BBC has advantages over existing programs for patients, clinicians, and insurers alike, the researchers say. All would get better health outcomes at lower costs. Insurers could keep copays down for those whose long-term health is most likely to be affected and therefore keep total health care costs in check.
"The beauty of this system is its flexibility and ability to change over time as new evidence comes out," says Fendrick.
Besides Fendrick, Chernew, and Smith, the article's authors also include Sonali Shaw, M.B.A., M.P.H., formerly a U-M/Pfizer fellow. Fendrick, Chernew and Smith are members of U-M's Consortium for Health Outcomes, Innovation and Cost Effectiveness Studies, or CHOICES. Funding for the study came from U-M.