Lower copays, better adherence	March 2008

While many pharmaceutical marketers have been concentrating resources on improving patient adherence through a variety of initiatives, new research is showing that companies and employers may be missing the simplest solution to adherence problems: reduced copays.

According to the authors of a study appearing in the January/February 2008 issue of Health Affairs, removing economic barriers to treatment for chronic conditions encourages patients to remain on recommended therapies. The study, funded in part by GlaxoSmithKline (gsk.com), investigates the impact on medication adherence of reducing prescription copayments, in addition to existing disease management programs, for employees of a leading service industry company.

According to the authors of the study, although a lack of medication adherence can be attributed to several factors, the effects of high prescription drug copayments have been studied extensively since they have often been used by employers and insurers to control drug expenditures. Increasing copayments have been shown to decrease use of medications for chronic conditions. But few studies have assessed the impact of decreasing copayments for important prescription medications.

The Impact of Decreasing Copayments on Medication Adherence in the Context of a Disease Management Program was a 12-month study in which the company, a global service provider, decreased copayments for a broad spectrum of medicines used to treat common chronic diseases. The list of medications for which the company decreased copays included angiotensin converting enzyme inhibitors, angiotensin receptor blockers, and beta-blockers for heart disease; oral therapies and insulin for diabetes; statins for high cholesterol; and inhaled corticosteroids for asthma. Copayment rates for generic medications were reduced from $5 to $0; copayments for branded drugs were cut in half. A similar employer with identical disease management offerings and similar but stable copayments served as a control group.

The study investigated the impact of lowering copayments on the rates of adherence and non-adherence for the selected chronic medications. Adherence and non-adherence were determined based on the ratio of eligible days each patient was in possession of his or her medicine.

The study’s authors found a statistically significant improvement in adherence for heart disease, diabetes, and high cholesterol. These results were achieved in addition to the effects of existing disease management programs. Value-based insurance design programs, the authors conclude, can effectively increase adherence to important medications and complement existing disease management programs.

The study also found a small positive result for inhaled corticosteroids for the treatment of asthma, but this result was not statistically significant. The authors note that this finding reflects the difficulty of measuring adherence for this class of drugs — there are multiple doses in a single inhaler, as opposed to the other medication classes, which more readily allowed individual doses to be counted.

The study published in Health Affairs complements the results of an earlier study by GlaxoSmithKline’s Health Management Innovations team, whichindicated that increasing prescription copayments results in decreased medication adherence. These studies, takentogether with the literature on medication adherence, suggest that value-based benefits can lead to better adherence, which may lead to better outcomes for patients and employers.

“We saw in the earlier study the detrimental effect of increasing copayments on patient medication adherence,” says Michael C. Sokol, M.D., medical director for GlaxoSmithKline’s Health Management Innovations team. “Now with this study, we are able to show that removing economic barriers to medication can positively affect patient behavior.”

Tying copayments to adherence to drugs for chronic diseases may offer a significant opportunity to employers and pharmaceutical marketers. According to the CDC, $3 of every $4 spent on healthcare in the United States goes to treating the 45% of Americans with at least one chronic disease. Also, according to a study by the Milken Institute, the seven most common chronic diseases cost the U.S. economy $1 trillion each year, including both direct and indirect costs. That figure is expected to reach $6 trillion each year by the middle of the century if unchecked.

Poor adherence to a medication regimen is a serious problem, especially for those with chronic diseases, contributing to substantial worsening of disease, complications, death, and increased healthcare costs. While employers have often implemented strategies of shifting costs onto the patient, this is only a short-term economic fix. To lower overall healthcare costs and improve the health of patients, the study’s authors say, the focus must be on the real problem — chronic diseases.

“We must encourage patients to take medications as prescribed for these chronic conditions, and encourage employers to support the health management efforts of their workers,” says  Mark Fendrick, M.D., one of the study’s authors. “As a nation, we must look at the healthcare continuum, focusing on prevention to keep people healthier, giving patients the right treatments to maintain their health, and continuing the search for new cures.”

GlaxoSmithKline’s Health Management Innovations team is also analyzing the results of several other studies investigating potential factors affecting patient compliance, including the impact of copayment level on specific outcomes such as Hba1c levels for diabetic patients, the impact of income on initial copayment levels and increases in copayment levels, the implemention of a consumer-directed health plan, and implemention of a pay-for-performance initiative.

A second study, also published in Health Affairs’ January/February issue, may shed additional light on the reason behind this apparent correlation between copay and adherence. According to this second study, supported in part by the Commonwealth Fund, rising out-of-pocket expenses and stagnant incomes increased the financial burden of healthcare for more Americans between 2001 and 2004, especially for the privately insured. More than one in six Americans, or 17.7% of the nonelderly population, lived in families spending more than 10% of after-tax income on healthcare in 2004, up from 15.9% in 2001.

Conducted by researchers at the Center for Studying Health System Change and the Agency for Healthcare Research and Quality, the study defined people living in families spending more than 10% of after-tax income on healthcare, including health insurance premium payments and direct spending on services, as having a high financial burden.

After accounting for general inflation, total average out-of-pocket spending on healthcare increased by $373 to $2,656 per person in 2004, about a 16% increase from 2001. In contrast, average familyincomes during the same period were largely unchanged after accounting for inflation.

This increase in financial burden was driven entirely by people with private insurance, most of whom had employer-sponsored coverage. One in six people, or 17%, with employer-sponsored insurance faced high burdens in 2004, up from one in seven people, or 14.7%, in 2001. For people with employer coverage, out-of-pocket spending for premiums and services rose $553 to $3,211, a 21% increase between 2001 and 2004 after accounting for inflation. The increase in high financial burden for this group would have been higher if not for a small rise of 4.6% in family incomes during the same period.

“Many families with private insurance — especially those with low incomes — are having difficulty paying medical bills,” says Peter J. Cunningham, Ph.D., a senior fellow at the Center for Studying Health System Change and coauthor of the study with Jessica S. Banthin and Didem M. Bernard of the Agency for Healthcare Research and Quality.

Given projections that overall private health insurance costs and out-of-pocket spending will rise 6% to 7% annually through 2016, the authors conclude that high financial burdens for healthcare are likely to continue to affect more Americans since growth in incomes is unlikely to keep pace with increases in the cost of care.

According to the study, more than half, or 52.7%, of people with nongroup, or individual, private health insurance faced high out-of-pocket burdens in 2004, up from 39% in 2001. There was no change in financial burden among the uninsured and people with public coverage. About 16% of the publicly insured and 14% of the uninsured faced high financial burdens in 2004. For the uninsured, lower out-of-pocket spending and comparable burden levels relative to privately insured people reflected lower medical care access and use.

About 55% of the uninsured used health services in 2004, compared with 88.1% of people with employer coverage. Despite the overall increase in financial burden, the share of total health spending paid for out of pocket actually decreased slightly from 34.8% in 2001 to 33.6% in 2004, meaning that much of the increased burden is a result of health spending growing more rapidly than income.