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ADA 2016

How Payment Impacts Care in Diabetes - and How Things Are Changing

Mary Caffrey
In an ADA session called "Follow the Money," panelists led by Joslin Diabetes Center's Robert A. Gabbay, MD, PhD, FACP, discussed the diabetes cost burden, insulin costs, and payment models.
The United States spends far more per patient, both with and without diabetes, than the rest of the world. And the current effort to fundamentally change what is rewarded in healthcare—to “burn the boats” as one speaker put it—will ultimately be good for providers in the intuitive, less procedure-driven field of diabetes care.

A hall mostly filled with clinicians came to hear a diverse panel at “Follow the Money—How Costs and Payments Impact Diabetes Care,” presented Friday, the opening day of the 76th Scientific Sessions of the American Diabetes Association (ADA) in New Orleans, Louisiana. The symposium was chaired by Robert A. Gabbay, MD, PhD, FACP, chief medical officer at Joslin Diabetes Center and editor-in-chief for Evidence-Based Diabetes Management, a publication of The American Journal of Managed Care.

Neda Laiteerapong, MD, MS, an assistant professor at the University of Chicago School of Medicine, who presented on behalf of Elbert S. Huang, MD, MPH, FACP, offered an overview of the staggering burden of diabetes and healthcare costs generally in the United States—including the well-known data from ADA that diabetes and prediabetes cost $322 billion a year.1 While diabetes is rising globally, Laiteerapong said, what sets the United States apart is how much more this country spends person—and how our successes in eliminating complications, like amputations, are contributing to the cost.

She reviewed data that show how incidence of diabetes per 1000 population soared through the 1990s and has leveled off or even declined in the last few years. What’s rising is prevalence—which means people are living longer with the disease. “This is actually a success story. We have improved survival for people with diabetes,” she said. The downside is that caring for people with diabetes for the long term is very expensive.

Insulin Prices Draw Fire

Laiteerapong discussed a recent cost concern—rising insulin prices. Since 2006, she said, costs have steadily increased. The symposium’s second speaker, health economist David H. Howard, PhD, of Emory University, discussed drug pricing, and distinguished between the list price at launch—the one published in news reports—versus the one paid later on existing drugs still on patent, and finally prices paid for off-patent or generic drugs.

Despite high list prices, he said, insurers and pharmacy benefit managers have been aggressive about demanding discounts, and while there is a lot of secrecy about the process, available data suggest diabetes therapies enjoy greater discounts than most drugs.

But rising insulin prices worry providers who care for persons with diabetes; those with type 1 and advanced type 2 disease need the hormone to stay alive. Howard looked at diabetes therapy from a long-term perspective, citing a study that appeared in The American Journal of Managed Care (Cunningham).2 The study found that the share of nonelderly adults with diabetes spending more than 10% of family income on insurance premiums and services fell in the 8-year period between 2001 and 2009, and Howard noted the importance of examining long-term trends.

During the question-and-answer session, physicians challenged the use of older data they said did not reflect the out-of-pocket experience patients see today, given current insulin prices and new benefit structures under the Affordable Care Act.

While some new drugs offer significant value, Howard said, there are others that charge high prices but offer marginal benefits. Too often, the prescribing of costly drugs is driven by “nonclinical factors,” and when patients have insurance, there’s little incentive for physicians to avoid higher cost therapies, he said.

As much as physicians might dislike prior authorization, Howard said, it does help keep drug prices lower than they might be otherwise. He anticipates changes to the Medicare Part D program because both presumptive nominees for president in 2016 favor changes to allow negotiating power. The best solution, he said, is using comparative effectiveness trials to show which of several drugs in the same class do the best job.

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