Health Care Cost Shifting Creates False Economy
Shifting prescription drug and other medical costs to employees is an ineffective means of cutting health care expenditures, and it often discourages employees from seeking treatment essential to health-related productivity, two recently published reports have asserted.
The nonprofit Integrated Benefits Institute (IBI) commissioned a study to examine how pharmacy design influences adherence to drug regimens and to explore the impact of drug adherence on non-occupational disability and productivity loss among rheumatoid arthritis sufferers. Using data on more than one million workers employed by 17 U.S. companies, IBI researchers analyzed changes in the rates of disability and absence-related lost productivity among 5,483 health plan participants with rheumatoid arthritis after employers increased out-of-pocket payments for prescription drugs.
Researchers said they chose to focus on this subset of employees because there are clear evidence-based medical guidelines regarding prescribed medication for rheumatoid arthritis sufferers. There is also a strong connection between rheumatoid arthritis and work disability. Compared to healthy workers with similar demographic characteristics, people suffering from rheumatoid arthritis are twice as likely to be hospitalized, are ten times more likely to claim disability, and incur three times the medical costs.
The study showed that, contrary to doctors’ recommendations, fewer than two-thirds of employees diagnosed with rheumatoid arthritis fill at least one symptom-relieving anti-inflammatory prescription, and just 45% of sufferers fill at least one of the disease-modifying anti-rheumatic agents (DMARDs) that are used to slow the progress of the disease. But, researchers found, when employers increased drug co-pays by $20, the percentage of employees with at least one DMARD fell to 35%, while the percentage of employees filling a prescription for at least one symptom-relieving drug declined even more dramatically. Researchers speculated that many sufferers switched to over-the-counter substitutes for pain-relieving drugs when co-pay amounts rose.
Failure to adhere to drug regimens results in more than just discomfort for the employee; it is also associated with higher rates and longer periods of short-term disability leave from work, researchers said. The analysis showed that disability incidence rates among those rheumatoid arthritis sufferers who filled at least one DMARD prescription were 36% lower than rates among sufferers who did not fill their prescriptions.
“It is unfortunate that employees appear to make medical decisions based on price and cost shifting, rather than evidence-based medicine,” said Dr. Thomas Parry, president of IBI. “Increasing co-pays for workers can often make a bad situation worse.”
The study modeled the lost productivity differences, comparing the costs incurred by those rheumatoid arthritis sufferers who filled no prescriptions with those who filled at least one prescription. Compared with a baseline of $17 million in lost productivity, the savings difference was found to amount to $3.2 million from reduced disability incidence and an additional $1.2 million from shorter disability durations, resulting in a total lost productivity savings of 26%.
Meanwhile, a separate analysis of previous research on prescription drug cost sharing recently published in The Journal of the American Medical Association (JAMA) indicated that increased cost sharing is associated with lower rates of drug treatment, lower rates of adherence among existing users, and more frequent discontinuation of drug therapies.
Written by health economist Dana P. Goldman and colleagues from the Rand Corporation, the study looked at data from 923 medical articles published between 1985 and 2006. The analysis found that, for each 10% increase in cost sharing, prescription drug spending declines by 2% to 6%, depending upon the class of drug and the condition of the patient. Results also showed that higher levels of cost sharing are associated with increased use of medical services, especially for patients with congestive heart failure, lipid disorders, diabetes, and schizophrenia.
Given these findings, the study’s authors concluded that pharmacy design represents an important public health tool for improving patient treatment and adherence. But, while acknowledging that increased cost sharing is highly correlated with reductions in pharmacy use, Goldman and colleagues observed that the long-term consequences of benefit changes on health remain uncertain.
