Copayment Increase Research Articles

The Value of Specialty Oncology Drugs

To estimate patients' elasticity of demand, willingness to pay, and consumer surplus for five high-cost specialty medications treating metastatic disease or hematologic malignancies. Claims data from 71 private health plans from 1997 to 2005. This is a revealed preference analysis of the demand for specialty drugs among cancer patients. We exploit differences in plan generosity to examine how utilization of specialty oncology drugs varies with patient out-of-pocket costs. We extracted key variables from administrative health insurance claims records. A 25 percent reduction in out-of-pocket costs leads to a 5 percent increase in the probability that a patient initiates specialty cancer drug therapy. Among patients who initiate, a 25 percent reduction in out-of-pocket costs reduces the number of treatments (claims) by 1-3 percent, depending on the drug. On average, the value of these drugs to patients who use them is about four times the total cost paid by the patient and his or her insurer, although this ratio may be lower for oral specialty therapies. The decision to initiate therapy with specialty oncology drugs is responsive to price, but not highly so. Among patients who initiate therapy, the amount of treatment is equally responsive. The drugs we examine are highly valued by patients in excess of their total costs, although oral agents warrant further scrutiny as copayments increase.

Increased patient co‐payments and changes in PBS‐subsidised prescription medicines dispensed in Western Australia

To determine whether a 24% increase in patient co-payments in January 2005 and two related co-payment changes for medicines subsidised under the Australian Pharmaceutical Benefits Scheme (PBS) were associated with changes in dispensings in Western Australia (WA). We analysed aggregate monthly prescription counts and defined daily dose per 1,000 population per day (DDD/1,000/day) for atypical antipsychotics, combination asthma medicines, HmgCoA reductase inhibitors (statins) and proton-pump inhibitors (PPIs). Trends pre and post the co-payment increase in January 2005 were compared. In three of the four categories examined, prescription counts were significantly lower following the increase in co-payment thresholds. Compared with dispensings prior to the co-payment increase, prescriptions fell by 8% for combination asthma medicines (p<0.001), 9% for PPIs (p<0.001) and 5% for statins (p<0.001). Following the rise in co-payments, DDD/1,000/day decreased for all four categories. Decreases in dispensings to concessional beneficiaries were between 4% and 5% larger than for general beneficiary patients. The reduction in the both prescription counts and DDD/1,000/day observed for combination asthma medicines, PPIs and statins, which all remained above co-payment thresholds, suggests the increase in PBS co-payments has affected utilisation of these subsidised medicines. The results indicate that increases in patient contributions particularly impact on concessional patients' ability to afford prescription medicines.

Impact of the Medicare Modernization Act on Dually Eligible Persons With Psychiatric Diagnoses: A New York State Case Study

The 2003 Medicare Modernization Act shifted medication coverage from Medicaid to Medicare for persons dually eligible for both programs. This study examined the extent to which access to psychiatric and concomitant medications was reduced for dually eligible individuals in New York State. It also examined the extent to which consumer copayments and state costs were changed when the act was implemented in 2006. Data were from psychiatric medication Medicaid claims in 2002 for the 36,842 dually eligible adults with severe mental illness and from the 2006 formulary data of New York State's 15 prescription drug plans available after the Medicare Modernization Act was implemented. The study simulated how dually eligible persons in New York State would fare under the plans' random and best-fit enrollment scenarios, taking into account the additional coverage provided by New York State's 2006 safety net policy. Implementation of the Medication Modernization Act reduced drug availability and increased usage restrictions. A study-defined generosity measure estimated a 51%+/-19% reduction in access. Dually eligible individuals with depression experienced the largest treatment gap. Cost changes to the state were essentially budget neutral, primarily because of the required claw-back payment. Consumer copayments increased percentage-wise, but actual dollar amounts remained small; increases were higher under best-fit enrollment compared with random enrollment. Without a generous safety net policy, dually eligible beneficiaries, especially those with depression, are likely to experience large gaps in their medication coverage and somewhat higher out-of-pocket costs. Treatment gaps were somewhat reduced by placement in best-fit plans, and such placement resulted in no added financial burden to the state. However, this resulted in higher consumer copayments--payments that are small in the actual dollar amount but that might have an impact on spending and on medication access for a largely poor consumer group.

Impact of a Prescription Copayment Increase on Lipid-Lowering Medication Adherence in Veterans

In February 2002, the Department of Veterans Affairs (VA) increased copayments from $2 to $7 per 30-day drug supply of each medication for many veterans. We examined the impact of the copayment increase on lipid-lowering medication adherence. This quasiexperimental study used electronic records of 5604 veterans receiving care at the Philadelphia VA Medical Center from November 1999 to April 2004. The all copayment group included veterans subject to copayments for all drugs with no annual cap. Veterans subject to copayments for drugs only if indicated for a non-service-connected condition with an annual cap of $840 for out-of-pocket costs made up the some copayment group. Veterans who remained copayment exempt formed a natural control group (no copayment group). Patients were identified as adherent if the proportion of days covered with lipid-lowering medications was > or =80%. Patients were identified as having a continuous gap if they had at least 1 continuous episode with no lipid-lowering medications for > or =90 days. A difference-in-difference approach compared changes in lipid-lowering medication adherence during the 24 months before and after copayment increase among veterans subject to the copayment change with those who were not. Adherence declined in all 3 groups after the copayment increase. However, the percentage of patients who were adherent (proportion of days covered > or =80%) declined significantly more in the all copayment (-19.2%) and some copayment (-19.3%) groups relative to the exempt group (-11.9%). The incidence of a continuous gap increased significantly at twice the rate in both copayment groups (all copayment group, 24.6%; some copayment group, 24.1%) as the exempt group (11.7%). Compared with the exempt group, the odds of having a continuous gap in the after relative to the before period were significantly higher in both the all copayment group (odds ratio, 3.04; 95% confidence interval, 2.29 to 4.03) and the some copayment group (odds ratio, 1.85; 95% confidence interval, 1.43 to 2.40). Similar results were seen in subgroups of patients at high risk for coronary heart disease, high medication users, and elderly veterans. The copayment increase adversely affected lipid-lowering medication adherence among veterans, including those at high coronary heart disease risk.

Proton-pump inhibitor utilization associated with the change to nonpreferred formulary status for esomeprazole in the TRICARE formulary.

inhibitor (PPI) esomeprazole in the third copayment tier on the TRICARE formulary on July 17, 2005. The change to nonpreferred formulary status for esomeprazole included a $13 copayment increase (from $9.00 to $22.00) for either a 30-day supply purchased from a community pharmacy or a 90-day supply purchased from the mail-order pharmacy and a $0 copayment if obtained from a military pharmacy but with a prior authorization (PA) requirement. The change to nonpreferred formulary status was designed to encourage the use of PPIs other than esomeprazole and to increase the use of the mail-order pharmacy for esomeprazole purchases. To quantify changes in (a) the TRICARE beneficiary utilization of esomeprazole relative to other PPIs and (b) the pharmacy settings used for filling esomeprazole prescriptions following implementation of a copayment increase and nonpreferred formulary status for esomeprazole. A census of outpatient pharmacy fill records for prescription acid-reducing medications (PPIs, histamine-2 blockers, misoprostol, and sucralfate) obtained by beneficiaries aged 18 years or older from January 1, 2005, through December 31, 2006, was examined. Interrupted time series regression analyses without a control group were used to compare the utilization of esomeprazole relative to other PPIs, as well as the pharmacy setting used to obtain esomeprazole, in the months before and after the formulary change. The rates of continued esomeprazole use, switching to other prescription PPIs (lansoprazole, omeprazole, pantoprazole, and rabeprazole), switching to non-PPI prescription acid-reducing drugs, and discontinued prescription acid-reducing medication use among existing esomeprazole users (i.e., beneficiaries who obtained esomeprazole as the last PPI fill before the formulary change) were calculated overall and for each pharmacy setting used prior to the formulary change. Over the 24-month study period from January 1, 2005, through December 31, 2006, the total numbers of PPI fills and PPI users increased by 8.5% and 9.0%, respectively, and the number of esomeprazole users decreased by 4.6%. Of esomeprazole users, the percentages of individuals obtaining esomeprazole from military pharmacies and community pharmacies, respectively, decreased from 1.7% to 1.1% and from 89.7% to 81.7%, while the percentage of individuals obtaining esomeprazole from the mail-order pharmacy increased from 8.8% to 17.6%. Time series analysis yielded a positive, statistically significant growth in esomeprazole fills (beta1=0.114; P=0.012) during the 6-month pre-intervention period (January through June 2005) and a significant reduction in August 2005 (beta2=-5.0%; P<0.001), the month immediately following the formulary change. During the 17-month post-intervention period (August 2005 through December 2006), no statistically significant change in trend for esomeprazole fills (beta3=-0.0265; P=0.534) was observed, although a small increase in the raw number of esomeprazole fills was noted. Among the 117,801 existing esomeprazole users, 86,386 (73.3%) continued using esomeprazole, 17,676 (15.0%) switched to other prescription PPIs, 679 (0.6%) used only non- PPI prescription therapy, and 13,060 (11.1%) discontinued all prescription acid-reducing pharmacotherapy after the formulary change. Significantly higher PPI switching and acid-reducing therapy discontinuation rates were observed among men aged 18-44 years and in TRICARE enrollees relative to women, those over 45 years of age, and those who used other health insurance (P<0.001). Individuals who used military pharmacies, where a PA requirement was implemented, were more likely to change pharmacy settings to obtain esomeprazole (43.8%) than were users of community pharmacies (11.9%) or the mail-order pharmacy (22.8%). Mail-order pharmacy users were less likely to discontinue acid-reducing pharmacotherapy (4.9%) than were community (11.9%) or military (12.9%) pharmacy users (P<0.05). After adjustment for serial correlation, the formulary change was associated with a migration of approximately 5% of all PPI fills and 25% of esomeprazole fills to the preferred PPIs in the first post-intervention month. Over the 17-month post-intervention period, the trend toward increased esomeprazole use was slowed and use of the mail-order pharmacy for esomeprazole fills nearly doubled. Our observed PPI switch rate of 15.0% resembled the rate observed for another insured population that experienced a similar formulary restructuring, but was substantially lower than the rates reported for more sizeable formulary changes. Thus, the present study's copayment differentials for third-tier medications ($19 compared with tier 1 and $13 compared with tier 2 copayments) may be less than the threshold amount required to optimize switching to preferred PPIs.

The Effect of Transitioning to Medicare Part D Drug Coverage in Seniors Dually Eligible for Medicare and Medicaid

To evaluate medication use, out-of-pocket spending, and medication switching during the transition period for patients dually eligible for Medicaid and Medicare (dual eligibles). Time-trend analysis, using segmented linear regression. Patient-level pharmacy dispensing data from January 2005 to December 2006 from a large pharmacy chain with stores in 34 states. Dual eligibles aged 65 and older. Changes in utilization, patient copayments, and medication switching were analyzed using interrupted time trend analyses. Utilization and spending were evaluated for five study drugs: clopidogrel, proton pump inhibitors (PPIs), warfarin, and statins (essential drugs covered by Part D plans) and benzodiazepines (not covered through Part D but potentially covered through Medicaid). Drug use for 13,032 dual eligibles was evaluated. There was no significant effect of the transition to Medicare Part D on use of all study drugs, including the uncovered benzodiazepines. Cumulative reductions were seen in copayments for all covered drugs after implementation of Part D, ranging from 25% annually for PPIs to 53% for warfarin, but there was a larger increase in copayments, 91% annually, for benzodiazepines after the transition. The rate of switching medications was 3.0 times as great for the PPIs after implementation of Part D than before implementation, but there was no significant change in the other study drug classes. These findings in a single, large pharmacy chain indicate that the transition plan for dual eligibles led to less medication discontinuation and switching than many had expected. The substantially greater cost sharing for benzodiazepines highlights the importance of implementing a thoughtful transition plan when executing such a national policy.

The impact of co‐payment increases on dispensings of government‐subsidised medicines in Australia

Patient co-payments for medicines subsidised under the Australian Pharmaceutical Benefits Scheme (PBS) increased by 24% in January 2005. We investigated whether this increase and two related co-payment changes were associated with changes in dispensings of selected subsidised medicines in Australia. We analysed national aggregate monthly prescription dispensings for 17 medicine categories, selected to represent a range of treatments (e.g. for diabetes, cardiovascular diseases, gout). Trends in medication dispensings from January 2000 to December 2004 were compared with those from January 2005 to September 2007 using segmented regression analysis. Following the January 2005 increase in PBS co-payments, significant decrease in dispensing volumes were observed in 12 of the 17 medicine categories (range: 3.2-10.9%), namely anti-epileptics, anti-Parkinson's treatments, combination asthma medicines, eye-drops, glaucoma treatments, HmgCoA reductase inhibitors, insulin, muscle relaxants, non-aspirin antiplatelets, osteoporosis treatments, proton-pump inhibitors (PPIs) and thyroxine. The largest decrease was observed for medicines used in treating asymptomatic conditions or those with over-the-counter (OTC) substitutes. Decrease in dispensings to social security beneficiaries was consistently greater than for general beneficiaries following the co-payment changes (range: 1.8-9.4% greater, p = 0.028). The study findings suggest that recent increase in Australian PBS co-payments have had a significant effect on dispensings of prescription medicines. The results suggest large increase in co-payments impact on patients' ability to afford essential medicines. Of major concern is that, despite special subsidies for social security beneficiaries in the Australian system, the recent co-payment increase has particularly impacted on utilisation for this group.

Effects of Increased Patient Cost Sharing on Socioeconomic Disparities in Health Care

Increasing patient cost sharing is a commonly employed mechanism to contain health care expenditures. To explore whether the impact of increases in prescription drug copayments differs between high- and low-income areas. Using a database of 6 million enrollees with employer-sponsored health insurance, econometric models were used to examine the relationship between changes in drug copayments and adherence with medications for the treatment of diabetes mellitus (DM) and congestive heart failure (CHF). Individuals 18 years of age and older meeting prespecified diagnostic criteria for DM or CHF were included. Median household income in the patient's ZIP code of residence from the 2000 Census was used as the measure of income. Adherence was measured by medication possession ratio: the proportion of days on which a patient had a medication available. Patients in low-income areas were more sensitive to copayment changes than patients in high- or middle-income areas. The relationship between income and price sensitivity was particularly strong for CHF patients. Above the lowest income category, price responsiveness to copayment rates was not consistently related to income. The relationship between medication adherence and income may account for a portion of the observed disparities in health across socioeconomic groups. Rising copayments may worsen disparities and adversely affect health, particularly among patients living in low-income areas.

Interventions designed to improve the quality and efficiency of medication use in managed care: A critical review of the literature – 2001–2007

BackgroundManaged care organizations use a variety of strategies to reduce the cost and improve the quality of medication use. The effectiveness of such policies is not well understood. The objective of this research was to update a previous systematic review of interventions, published between 1966 and 2001, to improve the quality and efficiency of medication use in the US managed care setting.MethodsWe searched MEDLINE and EMBASE for publications from July 2001 to January 2007 describing interventions targeting drug use conducted in the US managed care setting. We categorized studies by intervention type and adequacy of research design using commonly accepted criteria. We summarized the outcomes of well-controlled strategies and documented the significance and magnitude of effects for key study outcomes.ResultsWe identified 164 papers published during the six-year period. Predominant strategies were: educational interventions (n = 20, including dissemination of educational materials, and group or one-to-one educational outreach); monitoring and feedback (n = 22, including audit/feedback and computerized monitoring); formulary interventions (n = 66, including tiered formulary and patient copayment); collaborative care involving pharmacists (n = 15); and disease management with pharmacotherapy as a primary focus (n = 41, including care for depression, asthma, and peptic ulcer disease). Overall, 51 studies met minimum criteria for methodological adequacy. Effective interventions included one-to-one academic detailing, computerized alerts and reminders, pharmacist-led collaborative care, and multifaceted disease management. Further, changes in formulary tier-design and related increases in copayments were associated with reductions in medication use and increased out-of-pocket spending by patients. The dissemination of educational materials alone had little or no impact, while the impact of group education was inconclusive.ConclusionThere is good evidence for the effectiveness of several strategies in changing drug use in the managed care environment. However, little is known about the cost-effectiveness of these interventions. Computerized alerts showed promise in improving short-term outcomes but little is known about longer-term outcomes. Few well-designed, published studies have assessed the potential negative clinical effects of formulary-related interventions despite their widespread use. However, some evidence suggests increases in cost sharing reduce access to essential medicines for chronic illness.

The President's Budget: Dead-on-Arrival, But Still a Threat!

843 If the budget is dead-on-arrival but the 45% trigger is mandated, where will Congress and the President go with Medicare financing? There are no easy or quick fixes available, and all the fixes will affect our pocketbooks in some way or another. There are, and have always been, three means to manage the Medicare “problem”: reduce benefits, increase taxes, or increase cost sharing for current Medicare beneficiaries. None of these proposals is being touted by any current presidential candidate (for good reason). There are many potential ways to reduce current or future benefits. None of them are particularly appealing. With legislated change, Medicare could follow the lead of other developed nations and only pay for services that are cost-effective. This would be a dramatic change for the Medicare program and would be met with very stiff resistance. As an alternative, Medicare could pay fixed sums for various services and ask for greater cost sharing when new technologies cost more. This, too, is not at all appealing, either politically or socially. Increasing the use of managed care as a means to reduce benefits is also possible (and is actually happening), but there is little evidence that Medicare Advantage (as the current managed Medicare program is called) reduces costs or benefits. Increasing cost sharing might take several forms, including the already established means-testing of the Part B premium. In 2007, wealthier Medicare beneficiaries began paying higher premiums than all other beneficiaries. The President has already proposed extending the definition of “wealthier” down to lower income levels. Other options available to the Congress include increases in copayments, deductibles, or coinsurance. In each case, it is considered unlikely that any elected official would support these other options because they would disproportionately affect the least financially well-off and The President’s Budget: Dead-on-Arrival, But Still a Threat!

Modeling the Potential Impact of a Prescription Drug Copayment Increase on the Adult Asthmatic Medicaid Population

Objectives The Commonwealth of Massachusetts increased the copayment for prescription drugs by $1.50 for Medicaid (MassHealth) beneficiaries in 2003. We sought to determine the likely health outcomes and cost shifts attributable to this copayment increase using the example of inhaled corticosteroids (ICS) use among adult asthmatic Medicaid beneficiaries. Method We compared the predicted costs and health outcomes projected over a 1-year time horizon with and without the increase in copayment from the perspective of MassHealth, providers, pharmacies, and MassHealth beneficiaries by employing decision analysis simulation model. Results In a target population of 17,500 adult asthmatics, increased copayments from 50¢ to $2.00 would result in an additional 646 acute events per year, caused by increased drug nonadherence. Annual combined net savings for the state and federal governments would be $2.10 million. Projected MassHealth savings are attributable to both decreased drug utilization and lower pharmacy reimbursement rates; these more than offset the additional costs of more frequent acute exacerbations. Pharmacies would lose $1.98 million in net revenues, MassHealth beneficiaries would pay an additional $0.28 million, and providers would receive additional $0.16 million. Conclusion Over its first year of implementation, increase in the prescription drug copayment is expected to produce more frequent acute exacerbations among asthmatic MassHealth beneficiaries who use ICS and to shift the financial burden from government to other stakeholders.

Effect of Increased Copayments on Pharmacy Use in the Department of Veterans Affairs

In February 2002, the Department of Veterans Affairs (VA) raised medication copayments from $2 to $7 per 30-day supply of medication for certain veteran groups. We examined the impact of the copayment increase on medication acquisition from VA. This was a retrospective cohort study using data from national VA databases from February 2001 through February 2003. We took a random sample of over 5% of male VA users in 2001. Of 149,107 veterans sampled, 19,504 (13%) had copayments for no drugs, 101,410 (68%) had copayments for some drugs, and 28,193 (19%) had copayments for all drugs. We used multivariable count models to examine changes in the number of 30-day medication supplies after the increase. After the copayment increase, veterans subject to copayments for all drugs received 8% fewer 30-day supplies of medication annually relative to veterans with no copayments (P < 0.001). The effect of the copayment increased as the number of different medications veterans received increased. Among veterans subject to copayments for all drugs, acquisition of lower-cost drugs fell by 36%, higher-cost medications fell by 6%, over-the-counter medications fell by 40%, and prescription-only medications fell by 4% relative to veterans with no drug copayments. The number of medications veterans obtained from VA decreased after the copayment increase. There were relatively larger impacts on veterans with higher medication use and on lower-cost and over-the-counter medications.

The Effects of Copayments on Medication Adherence During the First Two Years of Prescription Drug Treatment

The aim of this study was to examine effects of initial prescription copayment size and observed increase on adherence by analyzing data from a managed care database. Medical-pharmacy claims data were abstracted from the Integrated Health Care Information Services (IHCIS) National Managed Care Benchmark database for primary employer-sponsored subscribers. Incident fills and refills for the 10 most common medication groups between 2001 and 2003 were predicted by size and observed increase in copayment with the use of survival analysis. High copayments and observed copayment increases were associated with termination of medication use. Whereas effects of copayment level were limited to the first few fills, effects of observed increases in copayments were persistent. The strategy of increasing initially low copayments after the patient has made enough fills to become insensitive to copayment level is contraindicated by observed increases in copayment, predicting termination. However, other financial incentives might nonetheless help reduce early termination of medication use.

Member satisfaction related to self-reported cost share and difficulty in obtaining prescription drugs in a university pharmacy benefit plan.

Utilization management tools (e.g., multitier copayment designs, prior authorization, step therapy, quantity limits) are commonly used to optimize the efficiency and appropriateness of drug therapy. However, these tools may also lead to unfavorable humanistic outcomes, including confusion or annoyance for patients. There is also some concern about whether these tools, along with the cost-sharing burden for medications, may cause patients to discontinue using their medications as well as lead to dissatisfaction with pharmacy benefits. Although anecdotal evidence can be collected from customer complaints, few studies have systematically examined the extent to which prescription drug plan enrollees experience difficulties in obtaining medications and whether these difficulties are associated with their satisfaction with the drug plan. To determine from a member satisfaction survey (1) perception of difficulties experienced by drug plan members when they tried to obtain prescription medications, (2) whether some segments of members experienced more difficulties, and (3) whether self-reported difficulties in acquiring medications were associated with member satisfaction. The analyses were based on a cross-sectional survey using a stratified sample of drug plan members. Four thousand employees or retirees who used the University of Michigan prescription drug plan were sent a survey in 2005 to ascertain their satisfaction with the drug plan as well as their experiences with the plan. Specifically, the analyses focused on how frequently the patients experienced difficulties in obtaining medications because of costs or drug use management interventions (e.g., prior authorization, step therapy). Logistic regression analyses examined the relationship of copayment changes and drug use management interventions on patients' satisfaction with the drug plan. Surveys were returned by 2,061 of the potential 3,667 eligible subjects with valid addresses (56.2% response rate). An overwhelming majority (83.7%) of respondents were satisfied with the pharmacy benefit- 17.6% reported being somewhat satisfied, 46.5% were satisfied, and 19.6% were very satisfied. Approximately 25% of drug plan members reported at least 1 difficulty in obtaining medication during the preceding year, including 11.4% who reported difficulties related to prior authorization or step therapy; only 2.0% reported that they couldn't afford their medication, and only 1.3% reported difficulty in paying the combined cost of their medications. Current employees were more likely to report difficulties than were retirees (30.7% vs. 19.1%; chi-square = 34.8; P <0.01), and users of the mail-service pharmacy were somewhat more likely to experience difficulties than users of community pharmacies (29.1% vs. 22.9%; chi-square = 9.92; P <0.01). The logistic regression analyses revealed that having difficulty obtaining medications (odds ratio [OR] = 0.27; 95% confidence interval [CI], 0.20-0.35) and experiencing a copayment increase (OR = 0.62; 95% CI, 0.48-0.81) were associated with a lower odds of member satisfaction. However, a high percentage of members were satisfied despite any difficulties or copayment changes: 66.9% for self-reported difficulty in obtaining medications compared with 89.7% (chi-square = 145.4, P <0.01) and 78.6% for self-reported copayment increase compared with 87.9% (chi-square = 30.2, P <0.01). Survey respondents were highly satisfied with their pharmacy benefits despite drug use management interventions in this pharmacy benefit plan. Respondents who reported a copayment increase or difficulty in obtaining medication were less likely to be satisfied with the drug plan.

Differences in Prescription Drug Use in HMO and Self-insured Health Plans

Using pharmacy benefits manager claims data, this study analyzed how cost-management techniques including cost sharing affected enrollees in health maintenance organizations (HMOs) versus employer-sponsored fee-for-service plans. Because HMOs bear the risk of pharmaceutical costs and influence the prescribing practices of the physicians in their network, we expected different patterns of prescription use, such as proportionately more generic medications in HMOs. Also, because HMO physicians are likely to prescribe relatively more drugs for high-severity conditions, HMO enrollee demand should be less price sensitive. The impact of cost sharing was found to be significantly less for HMOs. A 5-dollar increase in copayments decreased expenditures by 16 percent in fee-for-service plans but only by 1 percent in HMOs. Furthermore, when cost sharing was set at zero, HMO plans were found to have significantly fewer and cheaper medications, resulting in lower per-enrollee medication expenditures.

Relationship of the use and costs of physician office visits and prescription drugs to travel distance and increases in member cost share.

The prescription drug benefit is commonly designed and managed as a stand-alone health insurance product without consideration of how the design of other medical benefits may impact its use. To determine the effects of member cost (copayment/coinsurance) increases on the relationship between the use of physician office visits and the type/tier of prescription medication purchased in a commercially insured population. Our research model utilized managed care organization member costshare levels that were changed as part of the annual benefit renewal process to estimate the price.quantity.expenditure relationship between cost sharing and use of physician office visits/prescription drugs by benefit tier. The price.quantity. expenditure relationship was measured across a benefit copayment price change to determine the effect of a price increase on utilization/expenditures. We included the distance from the member.s residence to the physician.s office as a proxy for the time cost of an office visit. The study sample included 44,828 members who were fully insured for the full 12 months of 2002, continued coverage for the full 12 months of 2003, and whose benefit renewal occurred on January 1, 2003. We hypothesize that a relationship exists between office visit use and its expenditures and prescription drug use and its expenditures based on out-of-pocket cost. Hypotheses were tested using a least squares dummy variable regression model across claims records for years 2002 and 2003, containing consecutive yearly records for the same members. The unit of analysis was the member. Demand was estimated by benefit category and copayment tier to provide the study variables, price elasticity of demand, cross-price elasticity of demand, and distance elasticity. Expenditure is net health plan cost after subtraction of member cost share (including copayments, coinsurance, and deductibles). The expenditure categories in this study were pharmacy, medical office visits, and total health care costs. Members with greater travel distance to a primary care physician (PCP) or specialty care physician (SCP) office experienced higher PCP and SCP visit utilization (distance elasticity = 0.164 and 0.202, respectively; P <0.01). Greater travel distance to a PCP was also associated with higher tier-1 prescription use (0.048, P <0.01) as well as higher total plan-paid (0.032, P <0.05) and PCP expenditures (0.141, P <0.01). Greater travel distance to an SCP was associated with higher use of drugs in all 3 pharmacy copayment tiers (0.085, 0.075, and 0.073 for tier 1, tier 2, and tier 3, respectively; P <0.01 for each tier). The price effects of an increase in tier-1 copayments were fewer PCP office visits (-0.118, P <0.01) but more SCP office visits (0.177, P <0.01); SCP visits were also higher with increased tier-3 copayments (0.118, P <0.01). Tier-2 prescription drug use decreased with higher office visit copayments (-0.105, P <0.05). Increased tier-1 copayments were associated with lower expenditures for PCP office visits (-0.146, P <0.05) but higher expenditures for SCP office visits (0.149, P <0.05). While increases in tier-2 copayments were associated with lower PCP (and -0.322, P <0.01) and SCP (-0.453, P <0.01) expenditures, increases in tier-3 copayments were associated with higher PCP (0.495, P <0.01) and SCP (0.197, P <0.05) expenditures. A relationship exists between physician office visits and prescription drug use based on member cost share and time factors. Increases in office visit copayments were associated with decreased use of drugs in the tier-2 pharmacy benefit category. Increases in tier-2 pharmacy benefit copayment levels were associated with lower PCP/SCP expenditures, but increases in tier-3 pharmacy benefit copayment levels were associated with higher PCP/SCP expenditures. The distance to a physician.s office was directly proportional to the number of office visits. Separation of the management of pharmacy and medical benefits may have significant cost implications for consumers, employers, and health plans. Therefore, optimal management of medical and pharmacy benefits may require a coordinated strategy and tactics.

Drug Copayment and Adherence in Chronic Heart Failure: Effect on Cost and Outcomes

To measure the association among prescription copayment, drug adherence, and subsequent health outcomes among patients with chronic heart failure (CHF). Retrospective cohort study. Database of a large, national health insurance plan. Patients with CHF receiving commercial and Medicare supplemental benefits. We estimated adherence to therapy with beta-blockers or angiotensin-converting enzyme (ACE) inhibitors in 2002 by using the medication possession ratio, an estimate of the proportion of days a patient was exposed to a drug while taking a drug regimen. For 2003, we measured the annualized total cost of health care and identified hospitalizations with a diagnostic code for CHF. We used a two-stage regression approach to model the association among copayment, adherence, and patient outcomes. For patients taking ACE inhibitors, a $10 increase in copayment was associated with a 2.6% decrease in the medication possession ratio (95% confidence interval [CI] 2.0-3.1%). This change in adherence was associated with a predicted 0.8% decrease in medical costs (95% CI -4.2-2.5%) but a predicted 6.1% increase in the risk of hospitalization for CHF (95% CI 0.5-12.0%). Among patients taking beta-blockers, a $10 increase in copayment was associated with a 1.8% decrease in the medication possession ratio (95% CI 1.4-2.2%). This change in adherence was associated with a predicted 2.8% decrease in medical costs (95% CI -5.9-0.1%) and a predicted 8.7% increase in the risk of hospitalization for CHF (95% CI 3.8-13.8%). Among patients with CHF, higher drug copayments were associated with poorer adherence. The change was relatively small and did not affect predicted total health care costs, but it was sufficient to increase the predicted risk of hospitalization for CHF.

States Get More Flexibility To Cut Medicaid Programs

Back to table of contents Previous article Next article Government NewsFull AccessStates Get More Flexibility To Cut Medicaid ProgramsRich DalyRich DalySearch for more papers by this authorPublished Online:3 Mar 2006https://doi.org/10.1176/pn.41.5.0016Congress's approval in February of cuts of about $6.9 billion from Medicaid will require implementation by all 50 states. Mental health advocates hope to use state legislation to minimize the impact of those cuts.The National Mental Health Association (NMHA) said the groundswell of opposition mounted by mental health advocates can have a long-term impact by focusing on state restructuring of Medicaid through benefit-reductions and greater cost-sharing.“Advocates are well positioned to remind state legislators of the depth and breadth of opposition to such cuts and of the potential electoral consequences of taking that step,” according to an NMHA statement.“ Advocates can take pride in the intensity of the fight and the dividends those efforts can have in preventing full implementation of Medicaid cuts at the state level.”Rachel Klein, deputy direct of Health Policy at Families USA, told attendees at that group's recent annual meeting that advocates have an opportunity to impact the cuts at the state level because some cuts are mandatory while others are optional.States may increase copayments substantially and impose new premiums on many beneficiaries, including some children. The Congressional Budget Office (CBO) estimates these copayment and premium increases would reduce Medicaid expenditures by $1.9 billion over five years and $9.9 billion over 10 years.Nearly 80 percent of the savings from increases in copayments is expected to come from decreased use of medical services, rather than from collection of increased copayments, according to the CBO.For the first time, states may allow providers to deny needed services to beneficiaries who cannot make the higher copayments. Previously, Medicaid beneficiaries who could not make required copayments remained financially responsible to the provider but were not denied the needed service or prescription drug.Another new option for states is joining as one of 10 demonstration states to offer Health Opportunity Accounts. The program offers Medicaid recipients the option of choosing coverage similar to health savings accounts. Klein said the option has dubious benefits because participants first have to pay the deductible before their benefits are activated, which can be up to 110 percent of the $2,500 adult account.The law also funds a program to allow Medicaid coverage for disabled children whose families are not eligible for the program and is projected to cost $1.4 billion over five years.In describing his state's implementation of a program to insure all of the children in Illinois, Gov. Rod Blagojevich (D) said the challenge was to find cost savings in Medicaid. Some funding came from the use of primary care case managers to better manage chronic illnesses. He also cautioned legislators to not lose sight of the individual in their effort to save money.“Budgeting is not just about making revenue match spending. It is a moral process,” Blagojevich said.Further information about the Medicaid cuts are available through the Center on Budget and Policy Priorities at<www.cbpp.org/1-29-06health.htm>.▪ ISSUES NewArchived

Effect of Shifting Costs to Patients on Specialty Evaluation for Sleep Disorders

To determine whether the introduction of out-of-pocket expenses to medical center employees would lead to decreased use of sleep disorder services. We retrospectively analyzed and compared the clinical and medical accounting data from visits by Mayo Clinic employees to the Sleep Disorders Center from January 1 to March 31, 2003, with that of January 1 to March 31, 2004, le, before and after a January 2004 increase in co-payments for evaluation and testing. The total number of new patients evaluated in the first quarters of 2003 and 2004 was similar (113 vs 119; P = .37). Snoring, restless legs symptoms, hypertension, atrial fibrillation, and prior overnight oximetry testing were more prevalent in 2004 than in 2003 (P = .05, P = .01, P < .001, P = .003, P = .02, respectively). In contrast, insomnia and parasomnia complaints were less common in 2004 (P < .001). The mean apnea-hypopnea index, minimum oxygen saturation, and percentage of time with oxygen saturation less than 90% were all more severe in 2004 (P = .01, P = .001, P < .001, respectively). Sleep-related breathing disorders were more commonly diagnosed in 2004 (83.2% vs 67.2%; P = .02), whereas the diagnoses of nonbreathing disorders declined. The insurance policy changes that resulted in larger employee co-payments shifted the spectrum of diagnoses seen at the Sleep Disorders Center toward more symptomatic patients, with more associated comorbidities, and patients who had more severe sleep-related breathing disorders. Total utilization did not decrease.

The effects of outpatient co-payment policy on healthcare usage by the elderly in Taiwan

Aging and declining health are intrinsically related and are resulting in increasing healthcare spending in many countries. Control of healthcare spending and patient usage behavior are linked. This study examines the healthcare usage behavior of chronically ill elderly patients in Taiwan following an increase in co-payments. The differences in usage behavior are interpreted by comparing the frequency of hospital visits and the types of hospitals chosen by patients before and after the implementation of the new co-payment policy. Claim data of the Taipei branch of the National Health Insurance Bureau (NHIB) is used as a basis for this analysis. Analysis results indicate that choice of hospital type by the elderly is affected by an increase in co-payment, but that difference of the hospital type choice before and after the co-payment increase is too small to be practically significant. However, the frequency of visits decreased significantly after the implementation of the new co-payment policy. Medical care costs per visit for individual patients and for the National Health Insurance system both increased significantly. Visit frequency and hospital type choice, as well as diagnosis and treatment cost and co-payment, all show significant differences among different age groups of the elderly. The effects of co-payment increases are also discussed from the viewpoint of patients and of governmental policy.