Benefit design continues to be influenced by rising medical, pharmacy costs


Cost concerns continue to dominate benefit design, resulting in greater cost-sharing from employees, according to survey findings from managed care decision-makers, self-insured employers, and employee benefits consultants.

Cost concerns continue to dominate benefit design, resulting in greater cost-sharing from employees, according to survey findings from managed care decision-makers, self-insured employers, and employee benefits consultants.

The findings, compiled in Zitter Group's Managed Care Benefit Design Index: Emerging Trends in Access study, cites 3 main trends directly pertinent to benefit design:

1) Seventy-two percent of payers increased members' premium contributions for plan year (PY) 2012. A majority of employers (53%), and significantly more than did so for plan year 2011, made the same change, too.

3) Cancer now ranks as payers' greatest management priority, ahead of type 2 diabetes.

"Overall, high-cost, high-prevalence categories remain payers' top focus," Goldberg said. "Employers focus the most management attention on obesity, cancer, and type 2 diabetes, and place significantly greater priority on lifestyle categories impacting productivity than do payers."

In addition, both payers and employers report that total medical and pharmacy costs, as well as disease prevalence, primarily dictate which categories they rate as their highest priorities.


"Consequently, this potential facilitates a less-desirable therapeutic outcome for patients," Crosby told Formulary. "It is necessary for clinicians to be aware of this potential and to develop therapeutic recommendations that are aimed at the preservation of positive clinical outcomes. Therefore, clinicians, in their role as decision-makers, should rely on an evidence-based approach to therapeutics."

A more cost-effective therapeutic option may still promote the desired clinical outcome for a particular patient. "The determination of that option really depends on the clinician's understanding of therapeutic principles for a particular disease state and the strength of evidence in biomedical literature," Crosby said.

The fact that 34% of payers decreased the range of covered branded drugs further supports the emphasis on the usage of generic drug products, according to Crosby. "These findings further underscore the importance of the clinician's ability to incorporate non-pharmacological methods into disease-state management plans while both patient- and disease-state specific, non-pharmacological interventions may delay the onset of pharmacological intervention," he said.

There also is an interesting result about payer and employer perspectives on cost sharing. "A majority of payers and employers do believe there is a point at which shifting costs to members begins to erode patient health," Goldberg said. "However of this group, a majority reports that they are unlikely to hit such a point within 12 to 18 months. In other words, respondents increased cost sharing for PY 2012."


As far as management interventions are concerned, payers believe cost-sharing mostly impacts therapy utilization for proton pump inhibitors, hyperlipidemia, and hypertension, and least so for children's and adult vaccines and cancer, respectively.

More employers are opting for self-insurance and contracting with health plans for administrative services only (ASO). Significantly more employers are managing therapeutic categories per ASO/PBM recommendation than were 6 months ago.

When an employer engages an insurance company to administer the health benefit through ASO arrangements, the insurer makes benefit recommendations but the decision rests with the employer.

"That is, employers placed fewer formulary restrictions than their ASO recommended, thus allowing easier access for their employees," Goldberg said. "For the 2012 plan year investigated with our fall data, employers increased these formulary restrictions to a level more in line with what the ASO recommends."

Another key highlight from the report is that 63% of payers maintain a closed specialty pharmacy provider network for self-administered specialty drugs, and 52% of payers do not allow standard retail distribution for these agents.

"Based upon these changes, it is imperative that clinicians maintain a focus on evidence-based treatments and consider not only the pharmacoeconomic aspect of treatment but also the pharmacoeconomic aspect of diminished patient adherence," Crosby said. "Consider the therapeutic objective and carefully evaluate the options by which the same outcome can be accomplished."

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