Healthy Skepticism Library item: 10819

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Gardner A.
As Costs of Drugs Shift to Consumers, Spending Drops
HealthDay News 2007 Jul 3
http://www.washingtonpost.com/wp-dyn/content/article/2007/07/03/AR2007070301511.html

Full text:

As employers and insurance companies shift more of the cost of prescription drugs onto consumers, actual spending on these medications declines, new research finds.

For people with certain chronic medical conditions, this means more money is probably spent on expensive medical services and health outcomes worsen down the line, the researchers add.

“Prescription drugs are just like apples or breakfast cereal. When they increase in price, patients use less of them, and that’s true even of patients who have chronic illnesses,” said Dana Goldman, lead author of a study appearing in the July 4 issue of theJournal of the American Medical Association. “Cost-sharing can have powerful effects on the way people fill their medications.”

Goldman is director of health economics at RAND Corp., in Santa Monica, Calif.

With more and better medications available, access to outpatient drugs has become “a cornerstone of an efficient health-care system,” the study authors wrote.

But increases in pharmacy spending have caused insurers and employers to try to move some of that cost onto the consumer.

“There’s been a movement in the last few years . . . toward increased cost-sharing,” Goldman said. “It’s ironic, because if drugs are actually doing their job, as you spend more on drugs, you would expect to have less inpatient use and less use of emergency services. You would expect that if drugs are an increasing share of spending, that that means they’re working. We were trying to see what is the evidence that can reconcile these positions, that was the motivation.”

Goldman and his colleagues looked at 132 articles published between 1985 and 2006 that examined the association between prescription drug plan cost-containment measures (including co-payments and pharmacy benefit caps).

Increased cost-sharing was associated with lower rates of drug treatment, lower adherence rates and more frequent discontinuation of therapy.

For each 10 percent increase in cost-sharing, prescription drug spending went down by 2 percent to 6 percent.

For patients with congestive heart failure, lipid disorders, diabetes and schizophrenia, higher cost-sharing meant more use of medical services.

The long-term consequences were less clear.

“The evidence is somewhat underwhelming. There is some evidence, and we think it points to the fact that, ultimately, there are costs associated with this strategy, but the evidence is not as definitive,” Goldman said. “For certain chronic illnesses, we do see that when you increase cost-sharing, you also increase the use of inpatient and emergency services which are expensive, and that suggests there are some trade-offs.”

“There is some evidence that cost-sharing costs insurers more down the road, suggesting that the best strategy is to give people their medicine for free,” Goldman continued. “Some insurers are actually moving toward that for certain chronic diseases.”

Some experts felt the study didn’t go far enough.

“It is meaningless to correlate “cost-sharing” with “compliance” without delving deeper into patient education, patient investment, alternative treatments, lifestyle changes, etc.” said Greg Scandlen, president and founder of Consumers for Health Care Choices.

“Not all ‘cost-sharing’ is the same. The study appears to conflate co-payments and co-insurance, but they have very different effects,” Scandlen continued. “A co-payment acts as a fine for using a medication. It conveys no information about the underlying costs. . . . A co-pay reduces the knowledge of the consumer, while co-insurance increases the knowledge of underlying costs. Once the consumer knows what the cost is, she can have a conversation with her physician about costs versus benefits. This gets her more invested in her own course of treatment, which will promote greater compliance with the entire gamut of treatment.”

More information

There’s more on safe medication use at the National Council on Patient Information and Education.

SOURCES: Dana Goldman, Ph.D., director, health economics, RAND Corp., Santa Monica, Calif.; Greg Scandlen, president and founder, Consumers for Health Care Choices; July 4, 2007,Journal of the American Medical Association