A study published in the January/February 2008 issue of the journal Health Affairs, titled “Impact of decreasing co-payments on medication adherence within a disease management environment” caught our eye so we figured we’d tell you about it because it has implications for how patients behave when they have monetary incentives – this idea has been tossed around a lot but there hasn’t been a lot of data on it so this was a welcome change!
This study was done by a team led by University of Michigan and Harvard University researchers. It compared two unnamed major private employers, selected to be similar in all respects except one: co-payments. Company A, let’s call it, reduced the co-payments on preventative medicines for chronic illnesses including diabetes and hypertension. Co-payments in Company B remained the same and this was used as a control for the experiment to show that results of the co-payment intervention were not just a random occurrence. All employees participating in the study from both companies were also enrolled in a separate disease management program for their respective conditions. Five drug classes were studied: blood sugar-reducing drugs and insulin, cholesterol-reducing statins, heart-protecting ACE inhibitors, blood-pressure-reducing beta-blockers and asthma-calming inhaled steroids.
The drug prices at the two companies were as follows:
Company A (over 35,000 employees participated)
Generic drugs – free (formerly $5)
Brand-name drugs on the company’s preferred drug list - $12.50 (formerly $25)
Brand-name drugs not on the company’s preferred drug list - $ 22.50 (formerly $45)
Company B (over 70,000 employees participated)
Generic drugs - $16
Brand-name dugs - $29
The study measured non-adherence to drug regimens over a one year period and found that Company A had a 7-14% reduction in non-adherence in four out of the five drug categories studied – asthma medication being the odd one out. Importantly, the study was not powered to test if increased adherence to therapy resulted in improved health outcomes, notes first author, Michael Chernew, Ph.D., of the Harvard Medical School. He added, “While future studies need to be done to actually quantify this specifically, there is considerable evidence that use of the classes of medication in this study will reduce the frequency of adverse clinical events and associated hospitalizations and ER visits,”
In our view, the most important finding from this study is the fact that it has demonstrated that minimizing financial barriers (or removing them altogether in the case of generics) encourages increased use of high-value healthcare services. Increased adherence to diabetes therapy for example, especially early after onset of the disease goes a long way to delay (and even prevent) progression to complications, which are very expensive to treat. From a conceptual perspective, we strongly support the notion of Value-Based Insurance Design since it is based on the idea that insurance benefits should ideally produce “most health per dollar spent” as opposed to “most dollars spent.” We also would like to see what would happen if the brand name drugs were reduced and we would be interested in seeing sub-group analysis, e.g., seeing what happened to patients on generics versus branded drugs. Last, we would like to see this experiment carried out with diabetes drugs of course! Great job to the companies testing patient incentives and being so forward-looking about how to improve patient outcomes. We would be amiss if we didn’t point out that we think there are other important factors that affect adherence – with diabetes drugs, the side effect profile is key and it tends to be particularly difficult with generic drugs (SFUs prompt hypoglycemia and weight gain; metformin prompts GI side effects) – a negative for some patients taking generics (and some branded drugs) even if companies paid employees to take them!
Learn more about the Center for Value-Based Insurance Design