Controlling Prescription Drug Expenditures:
A Report of Success
David P. Miller, MD; Curt D. Furberg, MD, PhD; Ronald H. Small, MBA; Franklyn M. Millman, MD; Walter T. Ambrosius, PhD; Julia S. Harshbarger, PharmD; and Christopher A. Ohl, MD
Am J Manag Care. 2007;13:473-480
Using Multiple Clinical Administrative Strategies To Control Pharmaceutical Costs
To hold the line on prescription medication costs without decreasing the necessary use of drugs ordered for treatment of chronic conditions, the health plan covering the 11,000 employees of Wake Forest University Health Sciences and North Carolina Baptist Hospital instituted four administrative level interventions, none of which resulted in higher out-of-pocket charges to individual patients, even if they were, as a result, shifted to a more expensive medication.
The four policies, their fiscal impact, and their effect on clinical utilization are summarized in this excerpt from the article:
Commentary
This article serendipitously came to my attention shortly after I published the previous entry in this blog, Another Case Of Cash For Compliance, which focused on monetary incentives and disincentives, including cost-sharing,1 implemented to improve healthcare habits and cut costs.
The decision of this organization to eschew shifting some or all of the costs of more expensive drugs to patients to discourage their use made this article a striking counterpoint to the accounts of plans opting for cost-sharing.
While the results for the Wake Forest University Health Sciences and North Carolina Baptist Hospital health plan have been encouraging thus far, especially given that prescription medication costs have increased between 8% and 15% annually in this country since the year 2000, caveats are in order.
Most importantly, the study, as the authors note, only looked at one clinical parameter, the utilization of chronic medications; the effect of these interventions on other clinical outcomes (e.g., hospitalization rate) must also be determined.
Moreover, the clinical offerings and the pricing structure of the pharmaceutical industry have been and are likely to continue to be in flux (a factor also acknowledged in the article). Today’s successful price-cutting tactic can be rendered ineffective or even counterproductive by a policy shift at one of more of the medication manufacturers.
For example, pill splitting, used in this study to “yield substantial cost savings,” could be eliminated overnight by a simple change in the nonobligatory one pill, one price policy (i.e., a 25 mg dose and a 50 mg dose of a medication is typically sold for the some price, allowing a patient to split one 50 mg pill into two 25 mg doses at a saving of 50%) of many pharmaceutical producers which, as I’ve pointed out in a previous post, Intentional Noncompliance With Treatment, already consider the tactic subversive and seem well along toward the rationalization that it could be dangerous to patients.
And, of course, clinical discoveries can have analogous results, although cataclysmic changes may be less likely to occur without warning.
Nonetheless, the findings of this study support the notion that health plans willing to continually track, evaluate, and reassess pertinent changes in the clinical and business spheres of healthcare and adjust their own benefit structure accordingly can make impressive progress toward the goal of affordable healthcare.
Footnotes
