Drug benefit cost shift reaches its limit

June 12, 2009

While evidence-based plan designs are still evolving, they are improving health outcomes, say experts

While evidence-based plan designs are still evolving, they are improving health outcomes, say experts.

According to CVS Caremark annual employer-client survey results, clients are focused on strategies to change plan participant behavior and improve patient engagement as a way to reduce overall costs instead of simply shifting costs to the member.

Nearly three-quarters of respondents, 74%, said that reducing overall health costs is their number one measure of success in the coming year. Sixty-five percent indicated that plan design incentives to change behavior are a high priority, and 56% said wellness and disease-management programs are a priority.

“Cost-shifting has reached the tipping point, especially with pharmacy benefits,” says Jack Bruner, executive vice president, strategic development and marketing at CVS Caremark. “The share of pharmacy costs borne by the plan participant cannot continue to rise sharply or, in our view, medical expenses will increase dramatically as the result of patients not taking their prescribed medications.”

There are multiple drivers contributing to this shift, according to Bruner.

“Advancements in technology and plan design are resulting in increased patient engagement,” he says. “Employers and health plans are recognizing the long-term value of prevention, evidence-based medicine and wellness programs. These values, coupled with the increased demand for cost-control in today’s market economy, contribute to plan designs that help participants make positive shifts in managing their own behavior.”

While previous, class-based plan designs were effective, CVS Caremark is finding even better outcomes when patients enroll and engage in support programs for chronic diseases.

“Our survey results reinforce the integrated pharmacy health management approach, and it is improving patient adherence and keeping costs down,” Bruner says. “If we look at our best-in-class clients, they achieve a Generic Dispensing Rate above 70%, and they are using or plan to use more aggressive options to drive generic or OTC use next year. There is definitely momentum behind these strategies, and we expect the adoption rates will increase as we continue to see improved clinical outcomes and cost savings.”