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The American Journal of Managed Care July 2007
Quality of Clinical and Economic Evidence in Dossier Formulary Submissions
Fernando Colmenero, MD; Sean D. Sullivan, PhD; Jennifer A. Palmer, MS; Carmen A. Brauer, MD; Kathleen Bungay, PharmD; John Watkins, RPh, MPH; and Peter J. Neumann, ScD
Patient Preferences for Colorectal Cancer Screening: How Does Stool DNA Testing Fare?
Paul C. Schroy III, MD, MPH; Subodh Lal, MD; Julie T. Glick, MPH; Patricia A. Robinson, MEd; Philippe Zamor, MD; and Timothy C. Heeren, PhD
Szpunar et al (Am J Manag Care. 2007;13[pt1]:313-315)
Liu et al (Am J Manag Care. 2007;13[suppl 3]:S80)
Patient Preferences for Colon Cancer Screening: The Role of Out-of-Pocket Costs
Michael Pignone, MD, MPH
Patient Access to an Electronic Health Record With Secure Messaging: Impact on Primary Care Utilization
Yi Yvonne Zhou, PhD; Terhilda Garrido, MPH; Homer L. Chin, MD; Andrew M. Wiesenthal, MD; and Louise L. Liang, MD
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Effect of Cost-sharing Changes on Self-monitoring of Blood Glucose
Andrew J. Karter, PhD; Melissa M. Parker, MS; Howard H. Moffet, MPH; Ameena T. Ahmed, MD, MPH; James Chan, PharmD, PhD; Michele M. Spence, PhD; Joe V. Selby, MD, MPH; and Susan L. Ettner, PhD

Effect of Cost-sharing Changes on Self-monitoring of Blood Glucose

Andrew J. Karter, PhD; Melissa M. Parker, MS; Howard H. Moffet, MPH; Ameena T. Ahmed, MD, MPH; James Chan, PharmD, PhD; Michele M. Spence, PhD; Joe V. Selby, MD, MPH; and Susan L. Ettner, PhD
Objective: To study the effect of cost-sharing policy changes on utilization of test strips for self-monitoring of blood glucose.

Study Design: A legislative mandate (January 1, 2000) required California health plans to cover diabetes supplies, including those for self-monitoring of blood glucose. One health plan, Kaiser Permanente Northern California, initially waived established copayments and provided free test strips to members with diabetes mellitus for 2 years but later instituted a 20% coinsurance charge for a portion of their membership.

Methods: A retrospective cohort design was used to study pharmacy-based estimates of test strip utilization changes during this natural experiment. Analyses included 2 cohort investigations using pretest-posttest analysis with control subjects to study transitions from a copayment period to a free test strip period and from the free test strip period to a coinsurance period.

Results: During the copayment period, test strip utilization was inversely related to copayments for test strips. Offering free test strips did not increase utilization, even among those paying higher copayments before the policy change. Price-elastic patterns formed before and during the copayment period persisted, despite receiving free test strips for 2 years. The coinsurance, introduced after 2 years of receiving free test strips, resulted in statistically significant (but not clinically relevant) decreased utilization (approximately 1-3 fewer test strips/month). Change patterns did not differ by socioeconomic status.

Conclusions: Offering free test strips shifted costs from patient to health plan, without improving adherence. The introduced coinsurance slightly reduced utilization and adherence to recommendations about self-monitoring of blood glucose. Neither intervention had marked clinical effect. Cross-sectional analyses should not be used to predict utilization changes in the face of rapidly evolving benefit policies.

(Am J Manag Care. 2007;13:408-416)

We evaluated changes in utilization of test strips for self-monitoring of blood glucose levels across the following 2 cost-sharing thresholds: (1) from a period of copayments to a period of free strips and then (2) from the period of free strips to a period of coinsurance.

  • Findings included slightly reduced utilization in response to increased cost sharing but unchanged utilization in response to free test strips.
  • Price-elastic patterns formed before and during the period of copay-ments persisted, despite receiving free test strips for 2 years.
  • Cross-sectional analyses should not be used to predict utilization changes in response to changes in benefit policies.
The Diabetes Control and Complications Trial1 and the United Kingdom Prospective Diabetes Study2 demonstrated the benefits of achieving tight glycemic control in patients with diabetes mellitus (DM) and led to a concomitant promotion of self-monitoring of blood glucose (SMBG) as an integral part of good diabetes care. However, SMBG is consistently practiced less than is recommended by commonly supported guidelines,3-5 including those of the American Diabetes Association.6 Test strips for SMBG are expensive, and SMBG practice is more sensitive to cost sharing3 (ie, price-elastic demand) than many other health services (eg, dilated eye examinations).4 However, current understanding regarding how financial barriers affect utilization is primarily based on cross-sectional analyses.

California Senate Bill 64 (SB64), implemented on January 1, 2000, mandated that California's health plans provide coverage for diabetes supplies, including those for SMBG. The bill was intended to eliminate a financial barrier to SMBG and to facilitate this self-care practice. In recent years, 37 other states have passed similar legislation. Following similar legislation, rates of SMBG utilization increased, and glycemic control improved after a New England health plan started providing free glucose monitors in 1993.7 In the year before implementation of SB64 (hereafter referred to as the copayment period), a California health plan, Kaiser Permanente Northern California (KPNC), charged members with DM a $0 to $30 copayment for each prescription of test strips, depending on the member's type of benefit coverage. During the 2 years after SB64 was implemented (January 1, 2000, through December 31, 2001) (hereafter referred to as the free test strip period), test strips were provided free of charge to all KPNC members with DM. A second policy change occurred on January 1, 2002, after which approximately 35% of the commercial membership were charged a 20% coinsurance (approximately $8-$12 per prescription, depending on the brand of test strips) (hereafter referred to as the coinsurance period).

We studied the effects of these 2 benefit policy changes on SMBG practice (as measured by test strip utilization). We hypothesized an increase in individual-level test strip utilization after test strips were provided for free, with the greatest increase among those paying the largest copayments before the implementation of SB64. We assumed that poorer members would be more price sensitive and hypothesized that provision of free test strips would reduce socioeconomic disparities in utilization. We also hypothesized that, after receiving free test strips for 2 years, utilization would decrease after the coinsurance was introduced and that this decrease would be greatest among the poor and among those not treated with insulin.


Study Setting

Kaiser Permanente Northern California is a group-model healthcare organization that provides comprehensive medical services to more than 3 million members (approximately 35% of the population in the surrounding geographic area) through 15 hospitals and 23 outpatient clinics. Study subjects were identified from the KPNC diabetes registry (approximately 132 000 in 2000).

Two cohorts were created to analyze the effect of the 2 separate policy changes. The first was created for the analysis of utilization before and after the introduction of free test strips (hereafter referred to as the free test strip cohort), and the second was created to assess utilization before and after institution of a coinsurance for test strips (hereafter referred to as the coinsurance cohort). For each cohort, we created a sampling frame that included subjects with continuous health plan membership and prescription drug benefits in the prepolicy and postpolicy periods who were also ongoing test strip users (defined as having at least 1 dispensing for test strips during each year of the study). We did not include members without prescription drug benefits and those with prescription drug caps, because they have little financial incentive to purchase SMBG supplies exclusively at KPNC pharmacies and we cannot ascertain utilization at non-KPNC pharmacies. Based on these inclusion criteria, we identified 33 596 subjects in the free test strip cohort and 27 810 subjects in the coinsurance cohort sampling frames. We then excluded 12 241 and 9841 noncommercial health plan members (ie, members in subsidized plans [eg, Medicare]) from the free test strip cohort and the coinsurance cohort, respectively, to reduce case mix, demographic, and socioeconomic heterogeneity in the cohort. Patients enrolled in Medicare received free test strips starting July 1, 1998; this age class would have dominated the reference group if included.

Pharmacy medication dispensing records were then used to classify subjects into the following 3 mutually exclusive treatment groups: patients who use any regimen that includes insulin (hereafter referred to as the insulin group), patients treated only with oral hypoglycemic agents (OHAs) (hereafter referred to as the OHA group), and patients receiving no diabetes pharmacotherapy but receiving medical nutrition therapy (MNT) only (hereafter referred to as the MNT group). Healthcare providers generally encourage increases in SMBG frequency with the intensification of or the introduction of new pharmacotherapy; in these individuals, we would expect an increase in SMBG frequency during this time, independent of the change in the cost of test strips. Therefore, we excluded 2107 and 2323 additional subjects from the free test strip cohort and the coinsurance cohort, respectively, who switched type of diabetes therapy modalities (eg, adding insulin to regimens that previously included oral agents only) during the study period, although we could not exclude those with dosing changes or with additions of other therapies within the oral agent or insulin modality. The final free test strip cohort and coinsurance cohort on which this study was based included 19 248 and 15 646 subjects, respectively.

Because the 2 benefit changes in charges for test strips were not announced in writing to the KPNC membership, only ongoing users were aware of price changes (via the change in out-of-pocket charge for test strips). Therefore, for our main analyses of the individual-level effect of changes in out-of-pocket cost (eg, pre-post policy), we included only test strip users at baseline whom we assumed had experienced the changes in charges for test strips. However, although exclusion of individuals who were not prevalent users was appropriate for assessing individual-level changes, these cohorts are not well suited to study population-level patterns of utilization across levels of out-of-pocket cost because high cost may also lead to never initiating use or to discontinuing use. Therefore, we evaluated trends in SMBG practice and price sensitivity in a panel study of annual cohorts that included the individuals who were nonusers.

Data Collection Methods

We assessed SMBG practice as indicated by test strip utilization (mean daily test strip utilization) recorded from pharmacy dispensing records. The use of pharmacy dispensing records to estimate utilization has been shown to be a valid measure for patients with a prescription benefit.3 For each calendar year, the mean number of test strips used per day was calculated for each member by summing the cumulative number of test strips for the year and dividing by 365 days. We assumed that a patient possessed no stockpile of test strips at baseline. Test strip copayment amounts paid out-of-pocket were available through KPNC's benefits database. Copayment levels were collapsed into the following 4 categories: $0 (reference group), $1 to $3, $4 to $9, and $10 and higher to identify price-elastic patterns. Neighborhood-level socioeconomic status was characterized by geocoding each member's address to its 2000 census block group and by creating variables for median household income in 1999 and for residence in an impoverished neighborhood (defined as >20% of the population with an income below the US poverty line).

Statistical Analysis

We first detailed population-level 1995 to 2002 secular trends in SMBG (unadjusted), defined as a continuous measure (mean number of test strips used per day) and as a discrete measure (prevalent use vs nonuse). We then used a longitudinal retrospective cohort investigation in 2 separate cohorts to evaluate longitudinal changes in test strip utilization spanning a 4-year period across the following 2 thresholds: (1) transition from the copayment period to the free test strip period and then (2) transition from the free test strip to the coinsur-ance period. The outcome of interest was the change in the mean number of test strips used per day associated with the policy-based health planówide change in cost sharing. To control for selection bias and for intervening time factors (secular trends and aging), we used the difference-in-differences method (pretest-posttest analysis with control subjects).

Hierarchical linear models (random coefficient models) were specified to determine the 1-year change in the mean daily test strip utilization following the introduction of 2 separate cost-sharing policies. All statistical analyses were conducted using SAS software (SAS Institute, Cary, NC); the multivariate models were run using PROC MIXED (SAS Institute). The reference group, the $0 copayment group, received free test strips before and after each policy change and was used to account for the secular trend in SMBG in the absence of any price change. We expected that the levels of SMBG and the patterns of change in test strip utilization might cluster within the different medical facilities, which may have differed in their efforts to promote SMBG; therefore, we specified a random intercept for medical facility in our statistical models.

We assumed a priori whose effects would be modified by diabetes therapy, so we specified separate models for the insulin, OHA, and MNT groups. The exposures of interest (benefit-based changes in test strip copayment) were exogenous policy changes and were unlikely to be related to any individual-level factors. To be sure, we also specified adjusted models that controlled for potentially confounding individual-level prebaseline variables. These covariates included the mean daily test strip utilization during the year before the policy change, prepolicy prescription drug copayment (for the analysis of the first policy change only), prepolicy glycosylat-ed hemoglobin level, age, missed appointment rate, sex, inpa-tient comorbidity score, total pharmacy cost in the prebaseline year, specialty visits, urgent care visits, primary care visits, residence in a predominantly working-class occupation neighborhood, residence in a predominantly undered-ucated neighborhood, block group median income (1999), oral medication refill adherence (OHA models only), and pharmacy-derived utilization of insulin syringes as a measure of daily insulin injection frequency (insulin models only). We found no substantive difference between unadjusted and adjusted models; therefore, we present only the unadjusted findings. In addition, we specified models with cross-product terms stratified by contextual measures of socioeconomic status, as we hypothesized that residence in an impoverished area might modify the degree of changes in SMBG after the implementation of each policy.


Price Elasticity and Population Secular Trends

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