A high-quality health benefits program is a valuable tool for attracting and retaining valuable employees, but rising costs and non-compliance among plan members can make such programs problematic. However, employers have options which can provide improved health for their employees and better value, according to experts.
While the increase in drug plan costs is easy to quantify, the value of such a plan is not as discernable, explained ILEX Consulting president Warren Chin at the Face-to-Face Drug Plan Management Forum at Toronto’s Sutton Place Hotel on Tuesday.
“With a lack of this direct link, the focus has largely been on containing costs,” he said.
Chin provided evidence that even with a change in drug plan design, costs will trend upwards over time. This has led to efforts by plan sponsors to contain costs such as drug tendering which has become popular in the United States.
Drug tendering involves a pharmacy benefits manager (PBM) who solicits bids from various drug manufacturers to supply a product at the best possible price. Possible advantages to tendering include an exclusive deal and high sales volumes for the supplier, and increased prestige for the PBM, while disadvantages include market concentration or dominance by an individual supplier, bid-rigging, and supply safety concerns.
According to Chin, possible medical consequences of tendering include generic substitution—in which the same chemical, dosage, and delivery route is used—and therapeutic substitution, where a different chemical is used. The latter is not accepted practice according to the international pharmaceutical federation, and is prohibited in Canada.
He explained that while caution is warranted when considering tendering, if done properly it doesn’t have to present an economic barrier to people getting medication.
Chris Bonnett, president of H3 Consulting, pointed out that non-compliance of medical prescriptions by plan members is proving costly to Canadian plan sponsors. He says published reports suggest that non-compliance with prescribed medications is estimated at around 50%, while a 2003 survey of over 9,000 patients by Boston Consulting Group noted five specific types of non-compliance, with between 14% and 30% of respondents under each behaviour type.
“When we have about $8 billion worth of privately insured drug programs in this country, anywhere from a 15% to 30% impact is pretty significant,” he said.
Cost is a major factor in adherence, explained Bonnett. According to a recent survey of Canadian health plan members, almost 60% said they would seriously consider not filling a prescription if it cost more than $50, while 31% would reconsider even if it cost less than $50.
He also pointed out that a synthesis of 132 published studies demonstrated that increased cost-sharing was associated with lower rates of drug treatment, worse adherence among existing users, and more frequent discontinuation of therapy.
Bonnett showcased a U.S. study which compared two large employers with disease management programs in which one company decreased co-payments for five chronic medication classes. After one year, reduced co-pays were associated with improved adherence in four of five medication classes.
“This study demonstrates that if we can manage adherence and compliance in a more constructive, long-term and sustainable fashion, good things happen to people’s health and to the organization’s productivity.”
Employers need a framework to guide and support health plan decision-making, explained Bonnett. He recommends they consider cost, quality, accessibility, ethics and fairness, and look across the organization, not just the drug plan.
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