|Implemented in this survey?|
Between 1995-2006, spending on prescription drugs increased faster than spending on hospital and physician services. To reduce spending and utilization, health plans and employers have placed more responsibility on the consumer for making cost-conscious decisions. Tiered drug plans require consumers to pay different copayments for generic drugs, preferred and non-preferred brand-name drugs. In 2007, 91 percent of workers with employer sponsored insurance were enrolled in tiered drug plans.
Double-digit increases in drug costs have prompted health plans and employers to implement tiered drug plans that provide consumers with a financial incentive to select less expensive drugs and reduce unnecessary utilization. Consumers pay different co-payments or coinsurance to the health plan based primarily on the cost of the drug and the availability of subsitutes. Typically, two and three-tiered drug plans set a lower copayment for generic drugs than preferred or non-preferred brand medications. Four-tiered copayment plans place lifestyle and extremely expensive drugs in a higher tier.
Tiered drug plans reduce drug spending
Considerable research has shown that tiered drug plans have controlled pharmaceutical spending to a limited extent. Total drug spending is reduced primarily by shifting consumers towards less expensive (either generic or preferred brand name) drugs and reducing the number of prescriptions filled. Health plans receive the largest reduction in spending because consumers assume a larger share through out-of-pocket payments (Landon, 2007; Goldman, 2007; Gibson T, 2005). The total amount of pharmaceutical spending depends on the size of the copayment and the price differential between drug tiers. A less significant source of cost savings results from increased bargaining power with drug manufacturers and price competition among drugs. With the ability to direct a large volume of consumers towards preferred drugs, plans are able to negotiate larger price discounts from manufacturers. Since a larger number of drugs are included in incentive-based formularies compared to closed formularies, there is more competition among drugs for a place in the preferred tier.
But concern that plans reduce utilization of essential drugs
Despite their success in containing pharmaceutcal spending, a key concern is that these plans may reduce utilization of both essential and non-essential drugs. The evidence for this unintended effect, however, is mixed. Price senstivity of consumers may depend upon therapeutic class - there is a greater reduction in utilization for drugs used to relieve irregular symptoms (e.g., pain relievers) than those needed for regular maintenance of a chronic condition (e.g., diabetes drugs) (Goldman, 2007). However, other studies have found that both medication adherence and the initiation of drug therapy is reduced when consumers with chronic conditions move to a tiered copayments plan (Huskamp, 2003; Nair, 2003; Kamal-Bahl, 2004). Switching to generic or preferred drugs is also a concern since patients with chronic conditions have typically tried a number of drugs before finding the most effective. These effects could be heightened among low income populations who are likely to be more price sensitive than average, and therefore more likely to discontinue or reduce their use of essential drugs. However, studies of the effects of tiered copayments typically use claims data which do not include socio-economic characteristics such as income, wealth, and race. This concern therefore remains understudied (Goldman, 2007).
There is also concern that individuals cannot make informed choices about generic versus brand name drugs and between different types of brand name drugs. Finally, there is concern that underutilization of certain drugs could result in higher outpatient and inpatient spending.
To lower prescription drug spending by purchasing less expensive drugs and reducing unnecessary utilization.
Financial incentives through differential patient cost-sharing for drugs.
Consumers, especially those with chronic conditions, insurers, employers; providers; federal government
|Medienpräsenz||sehr gering||sehr hoch|
The trend to increase patient cost-sharing for both drugs and other health services is likely to continue. Providing financial incentives to consumers to make cost-conscious decisions is becoming a common feature in both medical and drug benefits plans.
Aside from 1993-1994, spending on prescription drugs grew at double-digit rates between 1990 and 2006. Although prescription drugs represent a small share of total national health care expenditures, between 1995 and 2006 it was the fastest growing component of health spending. Pharmaceutical spending increased most rapidly in 2005 and 2006 with the introduction of the Medicare Prescription drug benefit.
Double-digit increases in prescription drug spending heightened the need for cost costainment among health plans and purchasers, who had assumed a susbtantial share of the costs through the expansion of generous prescription drug coverage.
|Implemented in this survey?|
The most significant contributing factors to increased drug spending during the last 20 years were overall increases in utilization, and the introduction of newer and costlier drugs (KFF, 2007). During the 1980s and early 1990s, health plans and employers substantially expanded prescription drug benefits; coverage was generous with minimal patient cost-sharing (Mays, 2001). Between 1990 and 2000, out-of-pocket spending for prescription drugs by consumers decreased from 56 percent to 28 percent (KFF, 2007 a). Once consumers were shielded from the true costs of drugs, utilization increased significantly. Additionally, a substantial number of new and more costly drugs came to market and became especially popular through direct-to-consumer advertising (Strunk, 2002) .
Managed care companies had traditionally offset extensive benefit packages with strict administrative and utilization guidelines, but by 1995 growing consumer and provider dissatisfaction led managed care companies to relax these cost containment mechanisms. Facing increasing drug and health costs, health plans and employers increasingly began to shift costs on to consumers as an alternative cost containment tool. Tiered drugs plans provide consumers with a greater choice of drugs, but they pay more for certain types of drugs - especially expensive brand name drugs- in out-of-pocket costs. These plans have since become widespread. In 1998, 36 percent of health plans offered three-tiered drug plans. This increased to 80 percent in 2000 (Mays, 2001). Fifty percent of workers with Employer Sponsored Insurance (ESI) were enrolled in tiered prescription drug plans in 2000. In 2007, 91 percent of workers with ESI were enrolled in a tiered prescription drug plan and75 percent were enrolled in a plan with three or four tiers (KFF, 2007 b).
The approach of the idea is described as:
Else - Most health plans offer tiered drug plans. A few large employers are experimenting with value-based insurance designs for chronic conditions.
Health plans and employers have led the implementation of tiered drug plans to control prescription drug spending, and reduce their share of the cost. Consumers are very familiar with these plans; nearly all workers are in tiered drug plans. However, as consumers take on an increasing share of the cost, many especially those with chronic conditions are unable to afford their out-of-pocket payments for prescription drugs. Betweenn 2000 and 2007, the average copayment for preferred drugs increased from $15 to $25 and $29 to $43 for non-preferred brand name drugs (KFF, 2007).
Critics of tiered drug plans argue that these plans create financial barriers for consumers, reducing the use of essential drugs. Recent proposals such as Value-Based Insurance Design propose linking patient cost-sharing to the clinical value of drugs and services. Under this strategy, copayments for high value drugs such as those for diabetes or high blood pressure would be reduced, whereas copayments for drugs with limited benefit would be raised (Chernew, 2007). Physicians will have to weigh patient cost-sharing in tiered drug plans in addition to clinical effectiveness when prescribing drugs.
|Federal government||sehr unterstützend||stark dagegen|
|Physicians||sehr unterstützend||stark dagegen|
|Health plan||sehr unterstützend||stark dagegen|
|Consumers||sehr unterstützend||stark dagegen|
|Privatwirtschaft, privater Sektor|
|Employers||sehr unterstützend||stark dagegen|
The 2003 Medicare Modernization Act established a drug benefit for Medicare beneficiaries, administered either through stand-alone private drug plans, or a Medicare Advantage plan which covers all benefits including drugs. Following the private sector, the Centers for Medicare and Medicaid Services granted private insurance companies significant flexibility to implement its own formulary and cost-sharing mechanisms.
|Federal government||sehr groß||kein|
|Health plan||sehr groß||kein|
|Privatwirtschaft, privater Sektor|
The Centers for Medicare and Medicaid Services requires plans to use pharmacy and therapeutics committees to establish formularies; include at least two drugs within each therapeutic class of covered Medicare drugs in their formulary; and ensure that the formulary design does not discourage enrollment. Within these broad guidelines, there is wide variation in plan design (CHCF, 2005).
The Centers for Medicare and Medicaid Services monitors and evaluates each drug plan's cost sharing provisions for the top 40 prescribed drug classes; evaluates formularies to determine whether access to drugs for chronic conditions is inappropriately restricted; and monitors drug appeals by beneficiaries (CHCF, 2005). Despite these efforts, independent evaluations have found that drugs for treating chronic conditions such as cancer and rheumatoid arthritis are generally placed in the highest cost-sharing tier, making out-of-pocket costs for many beneficiaries with these conditions unaffordable (CHCF, 2005).
Since 2000, the growth in prescription drug spending has slowed - possible reasons include the widespread implementation of tiered drug plans, and the decrease in the number of new drugs approved. Several blockbuster drugs have also gone off patent (Strunk, 2005). Almost all employees with private insurance are in tiered drugs plans; consumers are likely to continue to assume an even greater share of the cost. The effect of increased cost-sharing on access to drugs is especially concerning for Medicare beneficiaries, who are now enrolled in private drug plans which are allowed to implement cost-containment mechanisms such as tiered drug copayments.
|Qualität||kaum Einfluss||starker Einfluss|
|Gerechtigkeit||System weniger gerecht||System gerechter|
|Kosteneffizienz||sehr gering||sehr hoch|
Prescription drugs are fundamental to the treatment and maintenance of chronic conditions. Tiered drug copayments may create a financial barrier to access to these drugs particularly for low-income populations, people with chronic conditions and Medicare beneficiaries. This may adversely affect health outcomes in the long term.
Petigara, Tanaz and Gerard Anderson