Cost effects of restricting cost-effective therapy

Cost-sharing under consumer-driven health care will not reform U.S. health care

Various kinds of consumer-driven reforms have been attempted over the last 20 years in an effort to rein in soaring costs of health care in the United States. Most are based on a theory of moral hazard, which holds that patients will over-utilize health care services unless they pay enough for them. Although this theory is a basic premise of conventional health insurance, it has been discredited by actual experience over the years. While ineffective in containing costs, increased cost-sharing as a key element of consumer-driven health care (CDHC) leads to restricted access to care, underuse of necessary care, and lower quality and worse outcomes of care. This paper summarizes the three major problems of U.S. health care urgently requiring reform and shows how cost-sharing fails to meet that goal.

Pharmaceutical policies: effects of restrictions on reimbursement

BACKGROUND

Public policy makers and benefit plan managers need to restrain rising pharmaceutical drug costs while preserving access and optimizing health benefits.

OBJECTIVES

To determine the effects of a pharmaceutical policy restricting the reimbursement of selected medications on drug use, health care utilization, health outcomes and costs (expenditures).

SEARCH STRATEGY

We searched the 14 major bibliographic databases and websites (to January 2009).

SELECTION CRITERIA

Included were studies of pharmaceutical policies that restrict coverage and reimbursement of selected drugs or drug classes, often using additional patient specific information related to health status or need. We included randomised controlled trials, non-randomised controlled trials, interrupted time series (ITS) analyses, repeated measures studies and controlled before-after studies set in large care systems or jurisdictions.

DATA COLLECTION AND ANALYSIS

Two authors independently extracted data and assessed study limitations. Quantitative re-analysis of time series data was undertaken for studies with sufficient data.

MAIN RESULTS

We included 29 ITS analyses (12 were controlled) investigating policies targeting 11 drug classes for restriction. Participants were most often senior citizens or low income adult populations, or both, in publically subsidized or administered pharmaceutical benefit plans. Impact of policies varied by drug class and whether restrictions were implemented or relaxed. When policies targeted gastric-acid suppressant and non-steroidal anti-inflammatory drug classes, decreased drug use and substantial savings on drugs occurred immediately and for up to two years afterwards, with no increase in the use of other health services (6 studies). Targeting second generation antipsychotic drugs increased treatment discontinuity and the use of other health services without reducing overall drug expenditures (2 studies). Relaxing restrictions for reimbursement of antihypertensives and statins increased appropriate use and decreased overall drug expenditures. Two studies which measured health outcomes directly were inconclusive.

AUTHORS' CONCLUSIONS

Implementing restrictions to coverage and reimbursement of selected medications can decrease third-party drug spending without increasing the use of other health services (6 studies). Relaxing reimbursement rules for drugs used for secondary prevention can also remove barriers to access. Policy design, however, needs to be based on research quantifying the harm and benefit profiles of target and alternative drugs to avoid unwanted health system and health effects. Health impact evaluation should be conducted where drugs are not interchangeable. Impacts on health equity, relating to the fair and just distribution of health benefits in society (sustainable access to publically financed drug benefits for seniors and low income populations, for example), also require explicit measurement.

Impact of restrictive prescription plans on heart failure medication use

BACKGROUND

Prescription plans frequently use restrictive strategies to control drug expenditures. Increased restrictions may reduce access to evidence-based therapy among patients with chronic disease. We sought to evaluate the impact of increased restrictions on medication use among heart failure (HF) patients.

METHODS AND RESULTS

We conducted a population-based cohort study of administrative data from 3 Canadian provinces. During 1998 to 2001, Quebec (QC) had a minimally restrictive plan, whereas Ontario (ON) and British Columbia (BC) had more restrictive prescription plans. We evaluated drug use at 30 days of discharge stratified by prescription plan. Provincial rates of filled prescriptions for HF drugs in QC, ON, and BC were 62%, 58%, and 47% for angiotensin-converting enzyme inhibitors; 34%, 22%, and 16% for beta-blockers; 9%, 5%, and 3% for angiotensin receptor blockers; and 79%, 76%, and 62% for loop diuretics, respectively. In multivariate analyses, patients residing in provinces with restrictive plans were less likely to be prescribed drugs that were restricted, such as beta-blockers (odds ratio, 0.53; 95% CI, 0.46 to 0.60; 0.36, 0.29 to 0.44, for ON and BC, respectively) and angiotensin receptor blockers (0.50, 0.45 to 0.56; 0.38, 0.32 to 0.46, for ON and BC, respectively), than drugs with no restrictions, such as loop diuretics (0.81, 0.74 to 0.88; 0.40, 0.36 to 0.45, for ON and BC, respectively) and angiotensin-converting enzyme inhibitors (0.80, 0.75 to 0.86; 0.47, 0.43 to 0.52, for ON and BC, respectively).

CONCLUSIONS

Among HF patients, residing in a province with a more restrictive prescription plan may be associated with lower use of restricted HF medications over and above the expected regional differences in HF drug use across provinces.

Making a case for employing a societal perspective in the evaluation of Medicaid prescription drug interventions

The choice of a perspective is among the most critical influences of the potential outcome of an economic evaluation, since it determines whose interest is relevant in any given analysis. For publicly funded programmes such as Medicaid, and now Medicare, it is important that economic evaluations are undertaken from a societal perspective because such evaluations inform decisions about allocation of healthcare resources. It has been argued that approaches other than the societal perspective selectively include specific costs, while ignoring other costs that are very much more 'real', and hence lack theoretical foundation in welfare economics. In view of the importance of perspectives in economic evaluations, this paper reviews 25 existing reports of economic evaluations of interventions involving prescription drugs in the Medicaid programme to examine the perspectives employed in such evaluations, based on the specific cost and benefit measurements. No explicit statement of the perspective employed was included in any of the articles selected for this review. Based on an analysis of the cost measures, none of the studies were found to have adopted a societal perspective in their evaluation. Most studies were from the perspective of Medicaid as the payer and as such did not include costs and benefits from outside the Medicaid system. Ten of the identified evaluations of interventions focused just on costs related to prescription drugs. Six studies included an evaluation of the impact of the intervention on overall programme costs along with the costs of prescription drugs. The nine remaining evaluations employed a broader approach to include related effects of the drug-benefit intervention on costs and utilization of other healthcare services such as physician, outpatient and inpatient services. This review emphasizes the importance of a societal approach in evaluating the effects of interventions in Medicaid and other publicly funded drug benefit programmes. Existing evaluations fall short of employing such a broad perspective. This, along with the limitations in design and data, make findings from these studies less reliable than should be used to make major decisions regarding allocation of tax dollars. While methodological challenges to such an approach are valid and understandable, there is an increasing need to attempt evaluations of cost-containment strategies from a broad-based societal perspective to ensure continuity and sustainability of publicly funded drug benefit programmes such as Medicaid and Medicare.

Moral hazard and consumer-driven health care: a fundamentally flawed concept

For more than 30 years, most health care economists in the United States have accepted a conventional theory of health insurance based on the concept of moral hazard: an assumption is made that insured people overuse health care services because they have insurance. The recent trend toward "consumer-driven health care" (CDHC) is advocated by its supporters based on this same premise, assuming that imprudent choices by patients can be avoided if they are held more financially responsible for their health care choices through larger co-payments and deductibles and other restrictions. This article examines how moral hazard-based CDHC plays out in both private plans and public programs. The author identifies seven ways in which this concept fails the public interest, while also failing to control health care costs. Uninsured and underinsured people, now including many in the middle class, underuse essential health care services, resulting in increased morbidity and more preventable hospitalizations and deaths among these groups than their more affluent counterparts. A case is made to reject moral hazard as an organizing rationale for health care, and the author offers some alternative approaches.

Medicaid's prior authorization program and access to atypical antipsychotic medications

State Medicaid programs use prior authorization (PA) to control drug spending by requiring that specific conditions be met before allowing reimbursement. The extent to which PA policies respond to new developments concerning medication safety is not known. In April 2005 the Food and Drug Administration (FDA) issued an advisory describing increased mortality among elderly people with dementia taking atypical antipsychotics. More than a year later, no state had changed its PA policy in response. We discuss the roles of Medicaid and other insurers in responding to emerging drug safety issues and their challenges in weighing drug risks and benefits.

Prescription drug cost sharing: associations with medication and medical utilization and spending and health

CONTEXT

Prescription drugs are instrumental to managing and preventing chronic disease. Recent changes in US prescription drug cost sharing could affect access to them.

OBJECTIVE

To synthesize published evidence on the associations among cost-sharing features of prescription drug benefits and use of prescription drugs, use of nonpharmaceutical services, and health outcomes.

DATA SOURCES

We searched PubMed for studies published in English between 1985 and 2006.

STUDY SELECTION AND DATA EXTRACTION

Among 923 articles found in the search, we identified 132 articles examining the associations between prescription drug plan cost-containment measures, including co-payments, tiering, or coinsurance (n = 65), pharmacy benefit caps or monthly prescription limits (n = 11), formulary restrictions (n = 41), and reference pricing (n = 16), and salient outcomes, including pharmacy utilization and spending, medical care utilization and spending, and health outcomes.

RESULTS

Increased cost sharing is associated with lower rates of drug treatment, worse adherence among existing users, and more frequent discontinuation of therapy. For each 10% increase in cost sharing, prescription drug spending decreases by 2% to 6%, depending on class of drug and condition of the patient. The reduction in use associated with a benefit cap, which limits either the coverage amount or the number of covered prescriptions, is consistent with other cost-sharing features. For some chronic conditions, higher cost sharing is associated with increased use of medical services, at least for patients with congestive heart failure, lipid disorders, diabetes, and schizophrenia. While low-income groups may be more sensitive to increased cost sharing, there is little evidence to support this contention.

CONCLUSIONS

Pharmacy benefit design represents an important public health tool for improving patient treatment and adherence. While increased cost sharing is highly correlated with reductions in pharmacy use, the long-term consequences of benefit changes on health are still uncertain.

Impact of pharmaceutical prior authorisation policies : a systematic review of the literature

Policies consisting of or including prior authorisation (PA) of pharmaceutical prescriptions have been increasingly implemented by public and private insurers in the last decade, especially in the US, in order to control drug spending. We conducted a systematic review of published articles determining the effects of these policies on drug use, healthcare utilisation, healthcare expenditures and health outcomes.A literature search was carried out in the electronic databases PubMed (which includes MEDLINE), EconLit, Web of Science and online sources including Google Scholar, from 1 January 1985 to 12 September 2006. Reference lists of retrieved articles were also searched. Peer-reviewed studies that provided empirical results about the impact of pharmaceutical PA policies, including randomised and non-randomised controlled trials, repeated measures studies, interrupted time series analyses and before-and-after studies were included. Use of, and expenditure on, directly affected drugs per patient, and overall drug expenditure, significantly decreased after PA implementation, or increased after PA removal. Health outcome changes attributed to PA policies were not directly evaluated. In most cases, except for cimetidine, PA implementation was not associated with significant changes in the utilisation of other medical services. Although the literature indicates a reduction in drug expenditure and a non-negative impact on use of other health services, policy recommendations still require improved study designs, and evidence cannot be easily transferred from one setting to another. The evidence still remains mainly limited to US Medicaid settings and to a small number of drug classes. There is a lack of consideration of implications of PA policies as heterogeneous interventions, outcome measurements require improvement, and there is a notable lack of evidence of medium- and long-term policy effects.

Differential effect of early or late implementation of prior authorization policies on the use of Cox II inhibitors

BACKGROUND

State Medicaid programs introduce many types of prescribing restrictions to manage pharmaceutical use and expenditure. Little is known about the differential effect of implementing prior authorization (PA) policies at market entry versus waiting until several years later when prescribing behavior may already be established.

OBJECTIVES

We sought to examine the impact on overall use of Cox II inhibitors of PA policies implemented at market entry versus at least 2 years after market entry.

RESEARCH DESIGN

We quantified Cox II inhibitor and nonselective nonsteroidal anti-inflammatory drug (NSAID) utilization for state Medicaid programs from January 1996 to September 2003. We used generalized estimating equations, Tukey's studentized range test and segmented linear regression on state Medicaid programs to determine the significance of changes in medication use.

MEASURES

The primary end point was the number of defined daily doses (DDD) per 1000 population per day.

RESULTS

Six states implementing prescribing restrictions for Cox II inhibitors at market entry had the lowest rates of uptake, averaging 10.9 DDD/1000/d. Twelve states adopting restrictions more than 2 years after market entry experienced declines in use from 23.0 DDD/1000/d before to 13.9 DDD/1000/d after the restrictions (P < 0.01). The 17 states that had never restricted access had the highest utilization, averaging 29.0 DDD/1000/d.

CONCLUSION

Implementing prescribing restrictions at market entry of Cox II inhibitors was effective in restricting uptake. Despite the difficulty in changing well-established prescribing patterns, utilization in states implementing policies 2 years after market entry approached that of the early adopting states within 1 year. Clinical outcomes of such policies remain unknown.

Impact of Medicaid preferred drug lists on therapeutic adherence

OBJECTIVE

To estimate rates of non-adherence for statins following implementation of a preferred drug list (PDL).

STUDY DESIGN

A retrospective cohort study.

METHODS

A difference-in-difference-in-difference approach was used to estimate the impact of a PDL on the use of statins in an Alabama Medicaid population. The PDL restricted access to certain branded medications and imposed a monthly prescription limit. The use of restricted drugs was compared with the use of unrestricted drugs in the months before and after the PDL in North Carolina (where there were no such restrictions) and Alabama. Pharmacy data from 2001 to 2005 were used to examine the effect of the Alabama PDL implemented in 2004.

RESULTS

Following the PDL in Alabama, Medicaid beneficiaries treated with statins had an 82% higher relative odds of becoming non-adherent with statin therapy compared with North Carolina and with pre-PDL Alabama [odds ratio (OR) 1.82, 95% CI 1.57, 2.11]. Furthermore, patients taking a restricted statin were more likely to be non-adherent than unrestricted patients (OR 1.42, 95% CI 1.12, 1.80). In addition, among Medicaid beneficiaries taking a restricted statin, people aged 65 years or older were more likely to be non-adherent than their younger counterparts after the PDL (OR 1.33, 95% CI 1.02, 1.73). Fifty-one per cent of patients in the Alabama sample were non-adherent with statin therapy after the PDL, compared with 39% before. Non-adherence was 36% in North Carolina in both periods.

CONCLUSION

The management of heart disease and high cholesterol are important challenges, especially for low-income patients. Policy makers should be aware that access restrictions can have adverse consequences for patient adherence.

Pharmaceutical cost management and access to psychotropic drugs: the U.S. context

In recent years, prescription drug expenditures in the United States have increased rapidly. In 2003, spending on prescription medications totaled $179.2 billion dollars, or approximately 11% of national health expenditures [Smith, C., Cowan, C., Sensenig, A., Catlin, A., the Health Accounts Team. (2005). Health spending growth slows in 2003. Health Affairs, 24 (1) 185-194]. In response to rapid increases in prescription drug expenditures, both public and private payers of health care services have adopted strategies to try to contain drug costs, including drug formularies, prior authorization programs, cost sharing and utilization management. In this paper, I provide a background on prescription drug spending trends, financing, and access to medications; describe some of the tools used most commonly to manage prescription drug utilization; present results from the literature on the impact of these tools; and discuss some implications of this information for the new Medicare prescription drug benefit to be implemented in 2006 as well as for future prescription drug innovation.

The class effect: is it relevant to geriatrics?

The formulary of medications available today provides a remarkable range of choices to all prescribers and their patients. In some ways, choices have become easier to make, whereas in other ways, choosing has become a nightmare of dueling considerations. One approach to simplification has relied on class effect. The hypothesis is that drugs within a pharmacological class all work similarly, have similar advantages and disadvantages, and are-to a large extent-interchangeable. If one develops familiarity with one or two agents in a class, that is all one needs to know, because there is little difference between agents within a drug class. The question is whether this approach based on class effect is relevant to geriatrics.

Benefits and risks of increasing restrictions on access to costly drugs in Medicaid

States are reacting to increased Medicaid drug costs by implementing cost-control policies, such as preferred drug lists (PDLs) and prior authorization. PDLs have risks as well as benefits. Targeting essential drug classes with heterogeneous patient responses and side effects could reduce appropriate care, adversely affect health status, and cause shifts to more costly types of care. Assessing inappropriate use of high-cost drugs before implementing regulations and instituting simple mechanisms to exempt high-risk patients could maximize savings and minimize harm. The current exponential growth in such policies and the limited evidence base justifies investment in research to identify which policies can achieve savings without unintended consequences.

Approaches to pharmacy benefit management and the impact of consumer cost sharing

BACKGROUND

Numerous mechanisms have been introduced to deliver prescription drug benefits while controlling pharmaceutical costs. An understanding of the most prominent mechanisms of benefit management is an important step in determining the most effective approach to take in future years.

OBJECTIVES

The aims of this review were to illustrate the mechanisms by which managed care has attempted to efficiently and equitably deliver pharmacy benefits and to discuss the impact of such programs, including consumer cost sharing.

METHODS

A review of the literature was conducted using the PreMedline and MEDLINE databases from the years 1966 to 2002, reference lists from relevant articles, and online sources, including news releases, conference materials, and pharmacy benefit management reports.

RESULTS

Numerous pharmacy benefit management tools and their impact on utilization, expenditures, and health outcomes are reviewed, including disease state management; utilization management (ie, quantity limitations and prior authorization); drug utilization review; formulary management (ie, open and closed); delivery systems (ie, retail and mail order); and mechanisms for implementing consumer cost sharing (ie, generic incentives, multitiered copayments, and co-insurance). Although there is some evidence to suggest that certain benefit management tools have been successful in reducing health plan expenditures, a more thorough investigation of their potential unintended consequences is needed.

CONCLUSIONS

Implementing adequate levels of consumer cost sharing is necessary if employers and health plans are to continue offering prescription drug benefits. It is important to remember, however, that quality health care cannot be forfeited for the sake of short-term cost savings.

Systemwide effects of Medicaid retrospective drug utilization review programs

Aggregate pooled cross-sectional and time-series annual state data for 1985 to 1992 were used to estimate the systemwide effects of retrospective drug utilization review programs (Retro-DUR) on Medicaid drug and nondrug outcomes. The results provide evidence that these programs produce significant cost savings in the drug budget without spillover effects (positive or negative) in other nondrug budgets within the Medicaid system. We also examine the influence of restricted formularies in this post-Retro-DUR era on drug and nondrug budgets in the Medicaid system; we find significant cost savings in the former but positive spillover effects in the latter.

The effect of new and continuing prescription drug use on cost: a longitudinal analysis of chronic and seasonal utilization

OBJECTIVE

To provide basic information about 2 factors contributing to rising prescription drug costs--utilization trends and product selection.

BACKGROUND

Prescription drug costs have risen sharply in recent years, and continued growth is expected. There is little consensus about appropriate cost-management strategies, in part because quantitative data on the causes and implications of increased drug costs are lacking.

METHODS

This study followed 463,820 continuously enrolled adult (> or = 18 years of age on January 1, 1996) utilizers of 15 chronic or seasonal therapeutic classes for 2.5 years (January 1996 through June 1998) using a pharmacy benefit manager's multiple-payer claims database. Outcome measures included (1) change in utilization rate, (2) relationship between new use and utilization growth, (3) stability of the treated population (ie, mostly long-term use vs high rates of turnover), and (4) product mix changes (ie, cost per dispensed day for 1996 vs 1997 and for new vs continuing users, controlling for inflation).

RESULTS

Of the 463,820 utilizers, 97% were commercially insured and 3% enrolled in Medicare risk plans; 40% were enrolled in managed care and the remainder covered by indemnity insurance. Rates of growth and turnover varied substantially by class. The highest 2-year utilization rate change was 66.7% for antihyperlipidemic agents; change was < 10% in only 3 classes. Across classes, an average of 38.7% of 1997 users were new (ie, no use in 1996) and an average of 34.0% of 1996 users were dropouts (ie, no use in 1997). Utilization growth depended heavily on treatment continuation; classes with high dropout rates (eg, antirheumatic, antiasthmatic) did not have high growth rates, even with high rates of new use. In most classes, costs were not higher for new than for continuing users. In some classes, however (eg, antipsychotic, antidiabetic), both new and continuing users increased their use of newer, more expensive products.

CONCLUSIONS

Because factors underlying rising prescription drug costs vary by therapeutic class, cost-containment strategies should address these differences. Further research is needed to assess the clinical and economic costs and benefits of rapid growth in the utilization of certain therapeutic classes.

A model of methods for influencing prescribing: Part I. A review of prescribing models, persuasion theories, and administrative and educational methods

The purpose of this literature review is to develop a model of methods to be used to influence prescribing. Four bodies of literature were identified as being important for developing the model: (1) Theoretical prescribing models furnish information concerning factors that affect prescribing and how prescribing decisions are made. (2) Theories of persuasion provide insight into important components of educational communications. (3) Research articles of programs to improve prescribing identify types of programs that have been found to be successful. (4) Theories of human inference describe how judgments are formulated and identify errors in judgment that can play a role in prescribing. This review is presented in two parts. This article reviews prescribing models, theories of persuasion, studies of administrative programs to control prescribing, and sub-optimally designed studies of educational efforts to influence drug prescribing.

The total cost of care and the use of pharmaceuticals in the management of rheumatoid arthritis: the Medi-Cal program

Medicaid claims data were analyzed to investigate the prevalence and cost of rheumatoid arthritis (RA) in the Medi-Cal program. It was estimated that approximately 24,000 Medi-Cal recipients receive treatment for RA each year. The sample of Medi-Cal RAs studied averaged more than $2500 annually in total direct health care expenditures. The total cost of RA to Medi-Cal is projected to be $19.26 million (+/- $0.90 million) annually. Inclusion of possible gastrointestinal side effects of drug therapy increases the total cost to $20.49 million (+/- $0.91 million). While only 6.5% of the sample of RAs were hospitalized and 4.9% received nursing home care annually, these services are estimated to account for nearly 70% of RA-related expenditures. Less than 7% of Medi-Cal RAs receive disease modifying antirheumatic drugs (DMARDs). More than 75% of Medi-Cal RAs received aspirin or NSAIDs. These relieve pain and inflammation, but have not been demonstrated to halt the process of joint destruction.