Newswise — Cost-sharing programs intended to control prescription drug costs may wind up increasing health plans' net spending for some groups of patients, according to a study in the May issue of Medical Care. The journal is published by Lippincott Williams & Wilkins, a part of Wolters Kluwer Health, a leading provider of information and business intelligence for students, professionals, and institutions in medicine, nursing, allied health, pharmacy and the pharmaceutical industry.
The increase in net expenditures is tied to unexpected increases in other areas like hospitalization. "Health plans should consult experts to anticipate the potential cross-program impacts of policy changes," concludes the new study, led by Colin Dormuth, Sc.D., of The University of British Columbia, Vancouver.
Two Cost-Sharing Approaches Lead to Increased Asthma CostsThe researchers analyzed the cost impact of two successive prescription drug cost-sharing policies in the British Columbia prescription drug plan. Through 2001, all British Columbia residents aged 65 and older had full coverage for prescription drugs. Beginning in 2002, a fixed co-pay of $25 per prescription (less for low-income seniors) was introduced. In mid-2003, a new policy was introduced including a deductible, coinsurance payment, and out-of-pocket ceiling, all of which varied by income.
The study analyzed the effects of the two cost-sharing plans on total expenditures for patients taking common inhaled asthma medications. The economic impact included spending for medications, emergency hospitalizations, and doctor visits, as well as the policy and administrative costs of developing and implementing the cost-sharing plans. All expenditures were converted to 2003 Canadian dollars (C$).
Both strategies—especially the deductible strategy—reduced the amount spent by the insurance plan for asthma inhalers. However, both strategies led to increases in net health expenditures for elderly British Columbia residents with asthma. Under the fixed co-pay policy, total spending increased by C$1.98 million per year.
The subsequent income-based deductible policy increased expenditures still further: by C$5.76 million per year. Most of the increase in expenditures reflected the costs of additional hospitalizations and physician costs.
Both cost-sharing plans led to increased out-of-pocket spending by patients for asthma inhalers, with increases of 30% during the co-pay policy and 59% during the deductible policy.
Lessons for Future Prescription Drug Policies?As in the current Medicare prescription drug plan, cost-sharing strategies give patients a financial incentive to use less-expensive treatments because they pay more for higher-priced drugs. Some previous studies have suggested that prescription cost-sharing may increase overall health plan costs. A 2008 study in Medical Care gave an example of the types of unintended consequences that can occur, showing that even small prescription drug co-payments led to reduced use of medications for serious chronic diseases by Medicaid patients.
The new results add to the evidence that cost-sharing approaches may actually increase net health expenditures, at least for some diseases. The results do not mean that either of the two cost-sharing approaches tried in British Columbia is "faulty in principle." Rather, the investigators believe, "The weakness of these cost-sharing approaches lies in their tendency to use a one-size-fits-all approach."
Dr. Dormuth and colleagues believe that policymakers weighing cost-sharing plans should consider the potential collateral costs in other areas: "Such a process would review existing evidence to understand what types of patients may change their drug use, and consulting clinical experts as to the risks posed by those changes."
About Medical CareRated as one of the top ten journals in healthcare administration, Medical Care is devoted to all aspects of the administration and delivery of healthcare. This scholarly journal publishes original, peer-reviewed papers documenting the most current developments in the rapidly changing field of healthcare. Medical Care provides timely reports on the findings of original investigations into issues related to the research, planning, organization, financing, provision, and evaluation of health services. In addition, numerous special supplementary issues that focus on specialized topics are produced with each volume. Medical Care is the official journal of the Medical Care Section of the American Public Health Association. Visit the journal website at www.lww-medicalcare.com.
About Lippincott Williams & Wilkins Lippincott Williams & Wilkins (LWW) is a leading international publisher for healthcare professionals and students with nearly 300 periodicals and 1,500 books in more than 100 disciplines publishing under the LWW brand, as well as content-based sites and online corporate and customer services. LWW is part of Wolters Kluwer Health, a leading provider of information and business intelligence for students, professionals and institutions in medicine, nursing, allied health, pharmacy and the pharmaceutical industry.
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