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Mehrotra A, Parker ED, Koep E, Liu P, Chernew ME. Role of prices in driving the variation in spending across medical groups. Health Serv Res 2023; 58:1164-1171. [PMID: 37528576 PMCID: PMC10622261 DOI: 10.1111/1475-6773.14207] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 08/03/2023] Open
Abstract
OBJECTIVE To understand the relative role of prices versus utilization in the variation in total spending per patient across medical groups. DATA SOURCES We conducted a cross-sectional analysis of medical claims for commercially insured adults from a large national insurer in 2018. STUDY DESIGN After assigning patients to a medical group based on primary care visits in 2018, we calculated total medical spending for each patient in that year. Total spending included care provided by clinicians within the medical group and care provided by other providers, including hospitals. It did not include drug spending. We estimated the case mix adjusted spending per patient for each medical group. Within each market, we categorized medical groups into quartiles based on the group's spending per patient. To decompose spending variation into price versus utilization, we compared spending differences between highest and lowest quartile medical groups under two scenarios: (1) using actual prices (2) using a standardized price (same price used for a given service across the nation). PRINCIPAL FINDINGS In total, 3,921,736 patients were assigned to 7284 medical groups. Per-patient spending in the highest quartile of spending medical groups was $1813 higher than per-patient spending in the lowest spending quartile of medical groups (50% higher relative spending). This overall difference was primarily driven by differences in inpatient care, imaging, and specialty care. In the scenario where we used standardized prices, the difference in spending between medical groups in the top and bottom quartiles decreased to $1425, implying that 79% of the $1813 difference in spending between the top and bottom quartile groups is explained by utilization and the remaining 21% by prices. The likely explanation for the modest impact of prices is that patients cared for by a given medical group receive care across a wide range of providers. CONCLUSIONS Prices explained a modest fraction of the differences in spending between medical groups.
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Affiliation(s)
- Ateev Mehrotra
- Department of Health Care PolicyHarvard Medical SchoolBostonMassachusettsUSA
- Beth Israel Deaconess Medical CenterBostonMassachusettsUSA
| | | | | | - Pang‐Hsiang Liu
- Department of Health Care PolicyHarvard Medical SchoolBostonMassachusettsUSA
| | - Michael E. Chernew
- Department of Health Care PolicyHarvard Medical SchoolBostonMassachusettsUSA
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Herr A, Stühmeier T, Wenzel T. More cost-sharing, less cost? Evidence on reference price drugs. HEALTH ECONOMICS 2023; 32:413-435. [PMID: 36415146 DOI: 10.1002/hec.4627] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Track Full Text] [Subscribe] [Scholar Register] [Received: 05/20/2021] [Revised: 07/18/2022] [Accepted: 09/21/2022] [Indexed: 06/16/2023]
Abstract
This paper evaluates the causal effects of changes in reference prices (RP) on prices, copayments, and overall expenditures for off-patent pharmaceuticals. With reference pricing, firms set prices freely and the health plan covers the expenses only up to a certain threshold. We use quarterly data of the German market for anti-epileptics at the package level and at the active substance level and exploit that the RP has been adjusted in some of the active substances but not in others in a difference-in-differences framework. At the product level, we find that a lower RP reduces prices for both brand-name drugs and generics, but leads to higher copayments, especially for brand-name drugs. At the aggregate level, we find that a lower RP leads to savings for the public health insurer since revenues decrease substantially for brand-name firms and, to a lesser extent, also for generic firms. Overall expenditures (payments by the health insurer and the patients) for brand-name drugs decrease in proportion to the decrease in the RP, while the adjustment does not significantly influence overall expenditures for generics.
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Affiliation(s)
- Annika Herr
- Institute of Health Economics, Leibniz University Hannover, Hannover, Germany
- DICE, University of Düsseldorf, Düsseldorf, Germany
| | | | - Tobias Wenzel
- DICE, University of Düsseldorf, Düsseldorf, Germany
- ZEW Mannheim, Mannheim, Germany
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Koduah A, Baatiema L, de Chavez AC, Danso-Appiah A, Kretchy IA, Agyepong IA, King N, Ensor T, Mirzoev T. Implementation of medicines pricing policies in sub-Saharan Africa: systematic review. Syst Rev 2022; 11:257. [PMID: 36457058 PMCID: PMC9714131 DOI: 10.1186/s13643-022-02114-z] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Figures] [Journal Information] [Submit a Manuscript] [Subscribe] [Scholar Register] [Received: 11/23/2021] [Accepted: 11/02/2022] [Indexed: 12/03/2022] Open
Abstract
BACKGROUND High medicine prices contribute to increasing cost of healthcare worldwide. Many patients with limited resources in sub-Saharan Africa (SSA) are confronted with out-of-pocket charges, constraining their access to medicines. Different medicine pricing policies are implemented to improve affordability and availability; however, evidence on the experiences of implementations of these policies in SSA settings appears limited. Therefore, to bridge this knowledge gap, we reviewed published evidence and answered the question: what are the key determinants of implementation of medicines pricing policies in SSA countries? METHODS We identified policies and examined implementation processes, key actors involved, contextual influences on and impact of these policies. We searched five databases and grey literature; screening was done in two stages following clear inclusion criteria. A structured template guided the data extraction, and data analysis followed thematic narrative synthesis. The review followed best practices and reported using PRISMA guidelines. RESULTS Of the 5595 studies identified, 31 met the inclusion criteria. The results showed thirteen pricing policies were implemented across SSA between 2003 and 2020. These were in four domains: targeted public subsides, regulatory frameworks and direct price control, generic medicine policies and purchasing policies. Main actors involved were government, wholesalers, manufacturers, retailers, professional bodies, community members and private and public health facilities. Key contextual barriers to implementation were limited awareness about policies, lack of regulatory capacity and lack of price transparency in external reference pricing process. Key facilitators were favourable policy environment on essential medicines, strong political will and international support. Evidence on effectiveness of these policies on reducing prices of, and improving access to, medicines was mixed. Reductions in prices were reported occasionally, and implementation of medicine pricing policy sometimes led to improved availability and affordability to essential medicines. CONCLUSIONS Implementation of medicine pricing policies in SSA shows some mixed evidence of improved availability and affordability to essential medicines. It is important to understand country-specific experiences, diversity of policy actors and contextual barriers and facilitators to policy implementation. Our study suggests three policy implications, for SSA and potentially other low-resource settings: avoiding a 'one-size-fits-all' approach, engaging both private and public sector policy actors in policy implementation and continuously monitoring implementation and effects of policies. SYSTEMATIC REVIEW REGISTRATION PROSPERO CRD42020178166.
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Affiliation(s)
- Augustina Koduah
- Department of Pharmacy Practice and Clinical Pharmacy, School of Pharmacy, College of Health Sciences, University of Ghana, Legon, Accra, Ghana.
| | - Leonard Baatiema
- Department of Health Policy, Planning & Management, School of Public Health, College of Health Sciences, University of Ghana, Legon, Accra, Ghana
| | - Anna Cronin de Chavez
- Department of Global Health and Development, London School of Hygiene and Tropical Medicine, London, UK
| | - Anthony Danso-Appiah
- Department of Epidemiology and Disease Control, School of Public Health, College of Health Sciences, University of Ghana, Legon, Accra, Ghana
| | - Irene A Kretchy
- Department of Pharmacy Practice and Clinical Pharmacy, School of Pharmacy, College of Health Sciences, University of Ghana, Legon, Accra, Ghana
| | | | - Natalie King
- Leeds Institute of Health Sciences, University of Leeds, Leeds, UK
| | - Timothy Ensor
- Nuffield Centre for International Health, University of Leeds, Leeds, UK
| | - Tolib Mirzoev
- Department of Global Health and Development, London School of Hygiene and Tropical Medicine, London, UK
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Robinson JC. Germany's Use Of Reference Pricing For Biologics: Lessons For The US. Health Aff (Millwood) 2022; 41:1821-1826. [PMID: 36469828 DOI: 10.1377/hlthaff.2022.00123] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 12/12/2022]
Abstract
A redesign of consumer cost sharing in the United States is important to accelerate the adoption of biosimilars and price reductions for biologics. This article analyzes therapeutic reference pricing for anti-inflammatory biosimilars in Germany and its implications for the United States. The German experience demonstrates that a redesign of consumer cost sharing can achieve savings for payers without creating onerous financial barriers for patients. In contrast, the dominant coinsurance structure of cost sharing in the US creates strong incentives for patients to abandon treatment, especially for serious illnesses treated by complex biologics, and only weak incentives to compare prices among therapeutically equivalent products. The Medicare Payment Advisory Commission (MedPAC) has advocated that the Centers for Medicare and Medicaid Services adopt a variant of reference prices for biologics, their related biosimilars, and therapeutically similar branded alternatives by assigning them the same billing code or by paying a similar rate for all the products. The German experience demonstrates that the proposed MedPAC approach is technically feasible and would generate savings for payers without imposing access obstacles on patients.
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Affiliation(s)
- James C Robinson
- James C. Robinson , University of California Berkeley, Berkeley, California
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Huang TY, Togun A, Boese T, Dowd BE. Analysis of Affordable Health Care. Med Care 2022; 60:718-725. [PMID: 35866553 DOI: 10.1097/mlr.0000000000001755] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [MESH Headings] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/25/2022]
Abstract
BACKGROUND Lack of affordable health care affects the uninsured, commercially insured, and Medicare beneficiaries. Yet, the wide variation in providers' prices and practice styles suggests that more affordable care already may be available and data on low value and wasteful care suggest that lower cost care need not come at the expense of better quality. Although price variation has received the most attention in the literature and legislation, total cost of care is a function of both unit prices (fees) and the quantity of services. OBJECTIVE To partition provider-specific variation in total annual risk-adjusted per capita expenditures on health care services into variation in unit prices (fees) versus quantities of services, and to explore the relationship between low value, avoidable, discretionary, and recommended care to total health expenditures. The analysis is important because both prices and quantities of services can affect affordability and reductions in prices versus quantities have very different effects on providers' profits. SETTING 2018 data from the Minnesota State Employees Group Insurance Program (SEGIP) that offers a tiered cost-sharing health insurance benefit design to 130,000 State employees and their dependents (SEGIP "members"). EXPOSURE Each year during open enrollment, SEGIP members choose a primary care clinic (PCC). The PCC can make decisions regarding both unit prices and prescribed services. PCCs are placed in one of four cost-sharing tiers based on the total annual risk-adjusted per capita health expenditures for the SEGIP members who choose their clinic. Members choosing higher cost PCCs face higher deductibles, copayments, and maximum out-of-pocket spending limits. MEASURES Overall prices and use of inpatient, outpatient hospital, professional, and pharmaceutical services, total and avoidable use of emergency department visits and inpatient admissions, low value care, testing for patients with pneumonia, and recommended preventive care. RESULTS Differences in total risk-adjusted annual per capita health expenditures across the care systems were substantial. Higher cost providers had both higher unit prices and higher use of services. Variation in the quantity of health care services explained more of the variance in total spending than variation in prices. Prices for professional services and use of inpatient, outpatient hospital, and pharmaceutical services, and ambulatory care sensitive admissions, contributed significantly to high total expenditures. Lower cost PCCs in the lowest cost-sharing tier had higher rates of low value care and lower emergency department visits per capita. Neither the number of investigations for patients with pneumonia nor the receipt of recommended mammography screening varied systematically by tier. CONCLUSIONS Efforts to identify and expand sources of affordable care, including improved information and incentives for consumers, need to account for variation in both prices and quantities of services. Efforts to encourage more efficient use of health care services by providers need to consider the effect of those efforts on the provider's internal costs and thus their profits.
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Affiliation(s)
- Tsan-Yao Huang
- Health Policy and Management, University of Minnesota, Minneapolis, MN
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Linde S, Egede LE. Do Chargemaster Prices Matter?: An Examination of Acute Care Hospital Profitability. Med Care 2022; 60:623-630. [PMID: 35647741 PMCID: PMC9262858 DOI: 10.1097/mlr.0000000000001734] [Citation(s) in RCA: 0] [Impact Index Per Article: 0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/26/2022]
Abstract
BACKGROUND It remains widely debated whether chargemaster price markups are tied to hospital profitability. OBJECTIVE To evaluate the effect of chargemaster markups on hospital profitability in the presence of unobserved hospital-specific (time-invariant) confounders, and cross-sectional dependence due to latent (common) policy shocks. DESIGN We use interactive fixed effects methods to address concerns of unobserved hospital-specific (time-invariant) confounders, and cross-sectional dependence. SETTING US acute care hospitals, 1996 through 2017 (ie, 22 y). PARTICIPANTS Using primarily Medicare cost report data, we construct an unbalanced panel of 3499 acute care hospitals per year, or a total of 76,972 hospital-year observations. MEASUREMENTS Chargemaster markups (above cost), profits per hospital inpatient discharge. RESULTS Between 1996 and 2017, chargemaster markups increased (on average) by 155%, and the SD of the chargemaster markup distribution increased by 324%-indicating growing variability in the average markup strategies pursued by hospitals. Our preferred model specification implies that a unit increase of the hospital chargemaster markup is associated with a $261 ( P <0.01; 95% confidence interval: $232-$291) increase in profits per hospital inpatient discharge. These results are robust to a wide set of model specifications, the use of alternative profitability measurements, and the use of an alternative instrumental variable identification strategy. Additional subsample analysis that controls for a rich set of hospital quality measures and system affiliation information also yields similar results. CONCLUSION We show that higher chargemaster markups are associated with higher hospital profitability. Additional research is needed to understand how chargemaster pricing impact health outcomes and health care disparities.
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Affiliation(s)
- Sebastian Linde
- Medical College of Wisconsin, Department of Medicine,
Division of General Internal Medicine, 8701 Watertown Plank Rd., Milwaukee, WI
53226-3596., USA
- Center for the Advancing Population Sciences, Medical
College of Wisconsin, Milwaukee, Wisconsin, USA
| | - Leonard E. Egede
- Medical College of Wisconsin, Department of Medicine,
Division of General Internal Medicine, 8701 Watertown Plank Rd., Milwaukee, WI
53226-3596., USA
- Center for the Advancing Population Sciences, Medical
College of Wisconsin, Milwaukee, Wisconsin, USA
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7
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Jiang B, Zhou RJ, Feng XL. The impact of the reference pricing policy in China on drug procurement and cost. Health Policy Plan 2021; 37:73-99. [PMID: 34379765 DOI: 10.1093/heapol/czab012] [Citation(s) in RCA: 3] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 09/21/2020] [Revised: 01/16/2021] [Accepted: 01/29/2021] [Indexed: 11/13/2022] Open
Abstract
High drug costs are putting pressures on health care budgets and posing an obstacle for China to achieve universal coverage. Policies such as the direct price ceiling, and the Essential Medicines Program-with the Zero Markup Drug Policy (ZMDP) one key component-were implemented, coming out with limited evidence for a success. As a benchmark of China's recent health reform, Sanming city initiated the ZMDP in January 2013; and further piloted the first reference pricing (RP) policy in China in September 2014, with the intention to dis-incentivize the use of costly original drugs. In this study, we used hospital-based drug procurement data of 14 drug substances that were subjected to the RP, from four hospitals in Sanming and a neighbouring city Longyan, between 2012 and 2016. Adopting the difference-in-difference (DID) approach, we evaluated the impacts of the RP together with the ZMDP. On the one hand, we found that the ZMDP had no impact on drugs' procurement prices, volumes and costs. While on the other hand, we found that the introduction of RP was not associated with changes in unit prices for the 14 drugs in Sanming. However, the RP pilot was associated with a 25.9% [95% confidence interval (CI), 12.9-37.0%] decrease in monthly drug procurement volumes and a 47.7% (95% CI, 33.7-58.7%) decrease in the total drug costs. In particular, it reduced the procurement volumes of original drugs by 56.8% (95% CI, 47.0-64.7%). Subgroup analyses by hospital level and therapeutic class found similar results. We draw lessons for the Chinese government to experiment RP on a larger scale, considering the development and effective regulation of the generic market. This is a first report on the effects of RP in China, Asia and middle-income countries.
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Affiliation(s)
- Bin Jiang
- Department of Administrative and Clinical Pharmacy, School of Pharmaceutical Sciences, Peking University Health Science Center, Beijing 100191, China
| | - Ruo Jing Zhou
- School of Government, Peking University, Beijing 100191, China
| | - Xing Lin Feng
- Department of Health Policy and Management, School of Public Health, Peking University, Beijing 100191, China
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Zhang H, Cowling DW, Graham JM, Taylor E. Impact of a commercial accountable care organization on prescription drugs. Health Serv Res 2021; 56:592-603. [PMID: 33508877 DOI: 10.1111/1475-6773.13626] [Citation(s) in RCA: 1] [Impact Index Per Article: 0.3] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 12/19/2022] Open
Abstract
OBJECTIVE To determine the long-run impact of a commercial accountable care organization (ACO) on prescription drug spending, utilization, and related quality of care. DATA SOURCES/STUDY SETTING California Public Employees' Retirement System (CalPERS) health maintenance organization (HMO) member enrollment data and pharmacy benefit claims, including both retail and mail-order generic and brand-name prescription drugs. STUDY DESIGN We applied a longitudinal retrospective cohort study design and propensity-weighted difference-in-differences regression models. We examined the relative changes in outcome measures between two ACO cohorts and one non-ACO cohort before and after the ACO implementation in 2010. The ACO directed provider prescribing patterns toward generic substitution for brand-name prescription drugs to maximize shared savings in pharmacy spending. DATA COLLECTION/EXTRACTION METHODS The study sample included members continuously enrolled in a CalPERS commercial HMO from 2008 through 2014 in the Sacramento area. PRINCIPAL FINDINGS The cohort differences in baseline characteristics of 40 483 study participants were insignificant after propensity-weighting adjustment. The ACO enrollees had no significant differential changes in either all or most of the five years of the ACO operation for the following measures: (1) average total spending and (2) average total scripts filled and days supplied on either generic or brand-name prescription drugs, or the two combined; (3) average generic shares of total prescription drug spending, scripts filled or days supplied; (4) annual rates of 10 outpatient process quality of care metrics for medication prescribing or adherence. CONCLUSIONS Participation in the commercial ACO was associated with negligible differential changes in prescription drug spending, utilization, and related quality of care measures. Capped financial risk-sharing and increased generics substitution for brand names are not enough to produce tangible performance improvement in ACOs. Measures to increase provider financial risk-sharing shares and lower brand-name drug prices are needed.
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Affiliation(s)
- Hui Zhang
- Health Policy Research Division, California Public Employees' Retirement System, Sacramento, California, USA
| | - David W Cowling
- Health Policy Research Division, California Public Employees' Retirement System, Sacramento, California, USA
| | - Joanne M Graham
- Health Policy Research Division, California Public Employees' Retirement System, Sacramento, California, USA
| | - Erik Taylor
- Health Policy Research Division, California Public Employees' Retirement System, Sacramento, California, USA
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Abstract
OBJECTIVE To understand the effect of physician payment incentives on the allocation of health care resources. DATA SOURCES/STUDY SETTING Review and analysis of the literature on physician payment incentives. STUDY DESIGN Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency. PRINCIPAL FINDINGS Fee-for-service payments can be incorporated into systems that encourage efficient pricing - prices that are close to the provider's marginal cost - by giving consumers information on provider-specific prices and a strong incentive to choose lower cost providers. However, efficient pricing of services ultimately will need to be supplemented by incentives for efficient production of health and functional status. CONCLUSIONS The problem with current FFS payment is not paying a fee for each service, per se, but the way in which the fees are determined.
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Affiliation(s)
- Bryan E. Dowd
- Division of Health Policy and Management, School of Public HealthUniversity of MinnesotaMinneapolisMinnesota
| | - Miriam J. Laugesen
- Department of Health Policy and Management at Columbia University'sMailman School of Public Health, Columbia UniversityNew YorkNY
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Sinaiko AD, Mehrotra A. Association of a national insurer's reference-based pricing program and choice of imaging facility, spending, and utilization. Health Serv Res 2020; 55:348-356. [PMID: 32157681 PMCID: PMC7240778 DOI: 10.1111/1475-6773.13279] [Citation(s) in RCA: 4] [Impact Index Per Article: 1.0] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 12/31/2022] Open
Abstract
OBJECTIVE To examine the association of a national insurer's reference-based pricing (RBP), program for outpatient advanced imaging-a benefit design to encourage patients to choose lower-price facilities. DATA SOURCE/STUDY SETTING Administrative and medical claims data for three self-insured employers that introduced RBP and a comparison group without RBP. STUDY DESIGN Difference-in-difference comparison of pre-RBP (2014) and post-RBP (2015-6) care between intervention and comparison groups. DATA COLLECTION/EXTRACTION METHOD We identified 137 680 imaging procedures (4602 intervention group; 133 078 comparison group) in 2014-2016. PRINCIPAL FINDINGS In the first post-RBP year (2015), there was no change in choice of facility; by the second year, RBP-exposed enrollees were 21.9 pp (95% CI: 18.5, 25.3) more likely to choose a lower-priced facility and net prices were $101.05 (95% CI: -$130.65, -$71.46), a difference of 8.1 percent lower. RBP was associated with higher patient out-of-pocket spending in the first post-RBP year ($31.82; 95% CI: $10.91, $52.73). There was no change in utilization, and higher-priced providers did not lower prices in the postperiod. Net savings represented 0.3 percent of outpatient spending. CONCLUSIONS Reference-based pricing for advanced imaging was associated with a shift to lower-priced facilities, but net impact on outpatient spending was modest. Patients paid increased out-of-pocket costs, though the amount declined after the first year of the program.
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Affiliation(s)
- Anna D. Sinaiko
- Harvard T.H. Chan School of Public HealthBostonMassachusetts
| | - Ateev Mehrotra
- Harvard Medical SchoolBostonMassachusetts
- Beth Israel Deaconess Medical CenterBostonMassachusetts
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Scanlon DP. If reference-based benefit designs work, why are they not widely adopted? Insurers and administrators not doing enough to address price variation. Health Serv Res 2020; 55:344-347. [PMID: 32227337 DOI: 10.1111/1475-6773.13284] [Citation(s) in RCA: 2] [Impact Index Per Article: 0.5] [Reference Citation Analysis] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 01/05/2023] Open
Affiliation(s)
- Dennis P Scanlon
- The Pennsylvania State University, University Park, Pennsylvania
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12
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Abstract
IMPORTANCE Reference pricing has been shown to reduce drug spending in Europe and has been adopted by some employers and labor unions in the United States. Its association with patient cost sharing depends on whether and how quickly physicians adjust their prescribing patterns to favor the least costly alternatives within each therapeutic class. OBJECTIVE To examine whether the implementation of reference pricing is associated with physicians and patients shifting to lower-cost drugs, thereby reducing consumer cost sharing and the prices paid by employers. DESIGN, SETTING, AND PARTICIPANTS This economic evaluation included employees of Catholic organizations who purchased health insurance through the Reta Trust and a random sample of employees of public sector organizations who purchased insurance through the California Public Employees' Retirement System (CalPERS) as a comparison group between July 1, 2010, and December 31, 2017. Data analysis was performed from January 1, 2019, to September 1, 2019. EXPOSURES The Reta Trust implemented reference pricing in July 2013; CalPERS did not adopt reference pricing during the study period. MAIN OUTCOMES AND MEASURES Probability that the drug prescribed was the least costly alternative within its therapeutic class, price paid per prescription, and patient cost sharing per prescription. Multivariable, difference-in-differences regression analysis of drug insurance claims was performed for patients before and after implementation of reference pricing, adjusted for patient characteristics, each drug's therapeutic class, and the month and year of the prescription. RESULTS During the study period, a total of 1.2 million prescriptions were submitted by 34 319 individuals covered by Reta Trust and 2.1 million prescriptions were submitted by 738 159 individuals covered by CalPERS. In the first 2.5 years after implementation of reference pricing, the percentage of prescriptions made for the low-priced drug within each therapeutic class increased by 5.1 percentage points (95% CI, 1.8 to 8.4 percentage points), patient cost sharing increased by 10.3% (95% CI, -1.6% to -23.6%; this difference was not statistically significant), and prices paid decreased by 19.1% (95% CI, -30.2% to -6.2%) for Reta Trust patients compared with CalPERS patients. During the subsequent 2-year postimplementation period, the percentage of prescriptions made for the low-priced drug increased an additional 6.2 percentage points (95% CI, 2.3 to 10.1 percentage points), patient cost sharing decreased by 21.3% (95% CI, -31.2% to -9.9%), and prices paid increased by 7.2% (95% CI, -12.6% to 31.4%; this difference was not statistically significant). Relative to the change experienced by the CalPERS population, during the study period, the share of prescriptions for lower-priced drugs increased by 6.3 percentage points (8.9% relative increase), the mean prescription drug price decreased by $9.5 (12.1% relative decrease), and the mean patient cost sharing decreased by $1.8 (4.3% relative decrease). CONCLUSIONS AND RELEVANCE In this study, reference pricing was associated with a combination of lower prices paid by employers and lower cost sharing by employees but with a time lag in prescribing habits by physicians.
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Affiliation(s)
| | - Christopher Whaley
- University of California School of Public Health, Berkeley
- RAND Corporation, Santa Monica, California
| | | | - Sanket S Dhruva
- Department of Medicine, University of California School of Medicine, San Francisco
- San Francisco Veterans Affairs Medical Center, San Francisco, California
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13
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Mummadi SR, Mishra R. Effectiveness of provider price display in computerized physician order entry (CPOE) on healthcare quality: a systematic review. J Am Med Inform Assoc 2019; 25:1228-1239. [PMID: 29982523 DOI: 10.1093/jamia/ocy076] [Citation(s) in RCA: 10] [Impact Index Per Article: 2.0] [Reference Citation Analysis] [Abstract] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 04/05/2018] [Accepted: 05/24/2018] [Indexed: 11/12/2022] Open
Abstract
Objective To study the association between Electronic Health Record (EHR)/Computerized Physician Order Entry (CPOE) provider price display, and domains of healthcare quality (efficiency, effective care, patient centered care, patient safety, equitable care, and timeliness of care). Methods Randomized and non-randomized studies assessing the relationship between healthcare quality domains and EHR/CPOE provider price display published between 1/1/1980 to 2/1/2018 were included. MEDLINE, Web of Science, and Embase were searched. Assessment of internal validity of the included studies was performed with a modified Downs-Black checklist. Results Screening of 1118 abstracts was performed resulting in selection of 41 manuscripts for full length review. A total of 13 studies were included in the final analysis. Thirteen studies reported on efficiency domain, one on effectiveness and one on patient safety. Studies assessing relationship between provider price display and patient centered, equitable and timely care domains were not retrieved. Quality of the studies varied widely (Range 6-12 out of a maximum possible score of 13). Provider price display in electronic health record environment did not consistently influence domains of healthcare quality such as efficiency, effectiveness and patient safety. Conclusions Published evidence suggests that price display tools aimed at ordering providers in EHR/CPOE do not influence the efficiency domain of healthcare quality. Scant published evidence suggests that they do not influence the effectiveness and patient safety domains of healthcare quality. Future studies are needed to assess the relationship between provider price display and unexplored domains of healthcare quality (patient centered, equitable, and timely care). Registration PROSPERO registration: CRD42018082227.
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Affiliation(s)
- Srinivas R Mummadi
- Department of Pulmonary and Critical Care Medicine, Metro Health-University of Michigan Health, Wyoming, MI, USA.,Department of Clinical Informatics, Metro Health-University of Michigan Health Innovation Center, Wyoming, MI, USA
| | - Raghavendra Mishra
- Department of Hospital Medicine & Clinical Informatics, SCL Good Samaritan Hospital, Lafayette, CO, USA.,Department of Hospital Medicine & Clinical Informatics, Kaiser Permanente, Englewood, CO, USA
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Luo J, Kulldorff M, Sarpatwari A, Pawar A, Kesselheim AS. Variation in Prescription Drug Prices by Retail Pharmacy Type: A National Cross-sectional Study. Ann Intern Med 2019; 171:605-611. [PMID: 31569218 DOI: 10.7326/m18-1138] [Citation(s) in RCA: 24] [Impact Index Per Article: 4.8] [Reference Citation Analysis] [Abstract] [Track Full Text] [Journal Information] [Submit a Manuscript] [Subscribe] [Scholar Register] [Indexed: 11/22/2022] Open
Abstract
BACKGROUND Cash prices for prescription drugs vary widely in the United States. OBJECTIVE To describe cash price variation by retail pharmacy type for 10 generic and 6 brand-name drugs throughout the United States and stratified by ZIP code. DESIGN Cross-sectional study. SETTING Drug pricing data from GoodRx, an online tool for comparing drug prices, representing more than 60 000 U.S. pharmacies (fall 2015). MEASUREMENTS Cash prices for a 1-month supply of generic and brand-name drugs were ascertained. Stratified by ZIP code, relative cash prices for groups of generic and brand-name drugs were estimated for big box, grocery-based, small chain, and independent pharmacies compared with a reference group of large chain pharmacies. RESULTS Across 16 325 ZIP codes, 68 353 unique pharmacy stores contributed cash prices. When stratified by 5-digit ZIP code, the relative cash prices for generic drugs at big box, grocery-based, small chain, and independent pharmacies compared with those at large chain pharmacies were 0.52 (95% CI, 0.51 to 0.53), 0.82 (CI, 0.81 to 0.83), 1.51 (CI, 1.45 to 1.56), and 1.61 (CI, 1.58 to 1.64), respectively. The relative cash prices for brand-name drugs were 0.97 (CI, 0.96 to 0.97), 1.00 (CI, 0.99 to 1.00), 1.06 (CI, 1.05 to 1.08), and 1.03 (CI, 1.02 to 1.04), respectively. LIMITATION Results may not reflect current drug prices and do not account for point-of-sale discounts or price matching that may be offered by smaller pharmacies. CONCLUSION Compared with large chains, independent pharmacies and small chains had the highest cash prices for generic drugs and big box pharmacies the lowest. Relative differences in cash prices for brand-name drugs were modest across types of retail pharmacies. PRIMARY FUNDING SOURCE Arnold Ventures.
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Affiliation(s)
- Jing Luo
- Brigham and Women's Hospital and Harvard Medical School, Boston, Massachusetts (J.L., M.K., A.S., A.P., A.S.K.)
| | - Martin Kulldorff
- Brigham and Women's Hospital and Harvard Medical School, Boston, Massachusetts (J.L., M.K., A.S., A.P., A.S.K.)
| | - Ameet Sarpatwari
- Brigham and Women's Hospital and Harvard Medical School, Boston, Massachusetts (J.L., M.K., A.S., A.P., A.S.K.)
| | - Ajinkya Pawar
- Brigham and Women's Hospital and Harvard Medical School, Boston, Massachusetts (J.L., M.K., A.S., A.P., A.S.K.)
| | - Aaron S Kesselheim
- Brigham and Women's Hospital and Harvard Medical School, Boston, Massachusetts (J.L., M.K., A.S., A.P., A.S.K.)
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15
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Brown TT, Atal JP. How robust are reference pricing studies on outpatient medical procedures? Three different preprocessing techniques applied to difference-in differences. HEALTH ECONOMICS 2019; 28:280-298. [PMID: 30450623 PMCID: PMC10801812 DOI: 10.1002/hec.3841] [Citation(s) in RCA: 3] [Impact Index Per Article: 0.6] [Reference Citation Analysis] [Abstract] [Key Words] [MESH Headings] [Grants] [Track Full Text] [Subscribe] [Scholar Register] [Received: 02/13/2017] [Revised: 08/29/2018] [Accepted: 10/18/2018] [Indexed: 06/09/2023]
Abstract
The evaluation of policies that are not randomly assigned on outcomes generated by nonlinear data generating processes often requires modeling assumptions for which there is little theoretical guidance. This paper revisits previously published difference-in-differences results of an important example, the introduction of reference pricing to common outpatient procedures, to assess the robustness of the estimated impacts by using different matching, and reweighting techniques to preprocess the data. These techniques improve covariate balance and reduce model dependence. Specifically, we examine the robustness of the effect of reference pricing on patient site-of-care choice, total expenditures, and complication rates. We apply three preprocessing methods: propensity score reweighting, exact matching, and genetic matching. Propensity score reweighting is a technique for achieving covariate balance but does not balance higher-order moments and may lead to bias and inefficiency in estimating treatment effects in the context of nonlinear data generating processes. In contrast, exact matching and genetic matching are designed to balance higher-order moments. We find that although the use of the preprocessing techniques is a valuable robustness check showing that some results are sensitive to the method used, the three approaches generally yield results that do not statistically differ from the published results.
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Affiliation(s)
- Timothy Tyler Brown
- School of Public Health, University of California, Berkeley, California, USA
| | - Juan Pablo Atal
- School of Public Health, University of California, Berkeley, California, USA
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16
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Chin AL, Bentley JP, Pollom EL. The impact of state parity laws on copayments for and adherence to oral endocrine therapy for breast cancer. Cancer 2018; 125:374-381. [PMID: 30566762 DOI: 10.1002/cncr.31910] [Citation(s) in RCA: 19] [Impact Index Per Article: 3.2] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Received: 06/01/2018] [Revised: 09/10/2018] [Accepted: 09/14/2018] [Indexed: 12/21/2022]
Abstract
BACKGROUND Adherence to endocrine therapy for breast cancer is often inadequate, in part because of out-of-pocket costs for medication. Numerous states have enacted parity laws to limit patient cost-sharing for oral anticancer drugs. The objective of this study was to estimate the impact of these laws on patient copayments for and adherence to oral endocrine therapy for breast cancer. METHODS Administrative health insurance claims data from 2007 to 2014 derived from a US health care database were used to identify female patients aged 18 to 64 years with invasive cancer or ductal carcinoma in situ of the breast who initiated endocrine therapy and were enrolled in fully insured health plans in states that either enacted parity legislation between 2008 and 2013 or had not yet enacted such legislation by 2015. Differences-in-differences analysis was used to compare copayments for and adherence to endocrine therapy during the 1-year period before and after each year of legislation enactment. RESULTS In total, 6900 individuals who received 7778 unique drug therapy courses were identified. Parity legislation was associated with significant decreases in the 25th percentile of copayments for anastrozole of $4.39 (95% confidence interval [CI], -$4.52 to -$4.26; P < .001) and for exemestane of $3.08 (95% CI, -$4.80 to -$1.35; P < .001). The median copayment for exemestane decreased by $10.25 (95% CI, -$12.61 to -$7.89; P < .001). A higher median monthly copayment was significantly associated with a greater risk of medication nonadherence (adjusted risk ratio, 1.006 per dollar increase; P < .001). CONCLUSIONS Parity laws had a modest effect on lowering the cost of anastrozole and exemestane, but more focused efforts to limit out-of-pocket costs for endocrine therapy may have a greater impact on medication adherence.
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Affiliation(s)
- Alexander L Chin
- Department of Radiation Oncology, Stanford Cancer Institute, Stanford, California
| | - Jason P Bentley
- Quantitative Sciences Unit, Stanford University School of Medicine, Stanford, California
| | - Erqi L Pollom
- Department of Radiation Oncology, Stanford Cancer Institute, Stanford, California
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17
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Mardetko N, Kos M, Vogler S. Review of studies reporting actual prices for medicines. Expert Rev Pharmacoecon Outcomes Res 2018; 19:159-179. [DOI: 10.1080/14737167.2019.1552137] [Citation(s) in RCA: 7] [Impact Index Per Article: 1.2] [Reference Citation Analysis] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 10/27/2022]
Affiliation(s)
- Nika Mardetko
- Faculty of pharmacy, University of Ljubljana, Ljubljana, Slovenia
| | - Mitja Kos
- Faculty of pharmacy, University of Ljubljana, Ljubljana, Slovenia
| | - Sabine Vogler
- WHO Collaborating Centre for Pharmaceutical Pricing and Reimbursement Policies, Pharmacoeconomics Department, Gesundheit Österreich GmbH (Austrian Public Health Institute), Vienna, Austria
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18
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Gudiksen KL, Brown TT, Whaley CM, King JS. California's Drug Transparency Law: Navigating The Boundaries Of State Authority On Drug Pricing. Health Aff (Millwood) 2018; 37:1503-1508. [PMID: 30179546 DOI: 10.1377/hlthaff.2018.0424] [Citation(s) in RCA: 1] [Impact Index Per Article: 0.2] [Reference Citation Analysis] [Abstract] [Key Words] [Track Full Text] [Journal Information] [Subscribe] [Scholar Register] [Indexed: 11/05/2022]
Abstract
The California drug transparency bill (SB-17), signed into law in October 2017, seeks to promote transparency in pharmaceutical pricing, enhance understanding about pharmaceutical pricing trends, and assist in managing pharmaceutical costs. This article examines the legal and regulatory aspects of SB-17, explores legal challenges to the law, compares it to other state efforts to address rising drug prices, and discusses how California can maximize the impact of SB-17 by coupling the law with other incentives. While SB-17 might not significantly reduce drug prices, the new law represents a meaningful step for one state seeking to negotiate the political and legal boundaries of state action to rein in drug prices.
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Affiliation(s)
- Katherine L Gudiksen
- Katherine L. Gudiksen is a senior research fellow at the Source on Healthcare Price and Competition, University of California Hastings College of the Law, in San Francisco
| | - Timothy T Brown
- Timothy T. Brown is an associate professor of health economics, School of Public Health, University of California Berkeley
| | - Christopher M Whaley
- Christopher M. Whaley is an associate policy researcher at the RAND Corporation in Santa Monica, California
| | - Jaime S King
- Jaime S. King ( ) is a professor of law at the University of California Hastings College of the Law and executive editor of the Source on Healthcare Price and Competition
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19
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Affiliation(s)
- Ateev Mehrotra
- From Harvard Medical School (A.M., M.E.C.), Beth Israel Deaconess Medical Center (A.M.), and the Harvard T.H. Chan School of Public Health (A.D.S.) - all in Boston
| | - Michael E Chernew
- From Harvard Medical School (A.M., M.E.C.), Beth Israel Deaconess Medical Center (A.M.), and the Harvard T.H. Chan School of Public Health (A.D.S.) - all in Boston
| | - Anna D Sinaiko
- From Harvard Medical School (A.M., M.E.C.), Beth Israel Deaconess Medical Center (A.M.), and the Harvard T.H. Chan School of Public Health (A.D.S.) - all in Boston
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