AlignMap

As Costs of Drugs Shift to Consumers, Spending Drops
Forbes, July 3, 2007

The Impact Of Medical Cost-shifting

This Forbes article references and elaborates on Prescription Drug Cost Sharing – Associations With Medication and Medical Utilization and Spending and Health, the JAMA article that was the focus of yesterday’s AlignMap post, Healthcare Cost-sharing And Medication Compliance.

According to the study, the current trend of employers and insurance companies shifting increasing the portion of the cost of prescription drugs onto consumers results in a decline in total spending on these medications, which itself has profound implications, especially for those with severe chronic medical conditions.

As Dana Goldman, lead author of the study and director of health economics at RAND Corp, summarizes

Goldman goes on to explain the thinking behind the study

As for long-term outcomes, however, the results were inconclusive. While there is evidence suggesting that the cost-shifting strategy increases total healthcare costs in cases of chronic disorders, the current data are not definitive.

The study is not without its critics.

Some experts felt the study didn’t go far enough. Greg Scandlen, president and founder of Consumers for Health Care Choices, is quoted:

Commentary

I published this post primarily to capture Dana Goldman’s elaboration’s on the study and the criticism from Greg Scandlen.

I have little to add about the study itself beyond my commentary in yesterday’s post. I do, however, wish to address Greg Scandlen’s comments.

As I noted yesterday, the study’s results may suffer from oversimplification, an observation which seems in concert with Scandlen’s complaints. No study, however, can be all-encompassing and truly comprehensive. One of the reasons I continue to promote the notion that “compliance” as used today is not a useful concept is that the multitude of factors that have an impact on adherence make such a comprehensive study pragmatically impossible. That does not, however, render the findings “meaningless” as Scandlen claims.

The differentiation between the effects on the patient of co-pay and coinsurance are, it seems to me, academically accurate. I’m less convinced that they are pragmatically valid in the day-to-day life of a patient. In my own experience on both the clinical and patient/patient’s family member sides of the equation, the distinction has had little practical significance. Personal experience, of course, often equates with personal beliefs and, in any case, is poor science, so I’ll be checking references for relevant research.

Scandlen’s scenario evoked in the statement, “Once the consumer knows what the cost is, she can have a conversation with her physician about costs versus benefits. This gets her more invested in her own course of treatment, which will promote greater compliance with the entire gamut of treatment,” is enchanting, but unrecognizable to me and the handful of other clinicians I informally called recently. Again, I’ll have to find pertinent research to be convinced it takes place with any frequency beyond that of blue moons and World Series victories by the Chicago Cubs.

Footnotes

1. While definitions of co-pay and co-insurance vary in specifics, the following amalgams I’ve composed from a variety of sources are are reasonably typical for the American individual insurance market. (Coinsurance, in the international market, refers to the joint assumption of risk between various insurers.)
   • A copayment, or copay, is a flat dollar amount paid for a medical service by an insured.
   • Coinsurance indicates how an insurer and an insured will share the costs of a bill that exceeds the insurance policy’s deductible up to the policy’s stop loss. Once the insured’s out-of-pocket expenses equal the stop loss the insurer will assume responsibility for 100% of any additional costs up to the policy’s maximum benefit.

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