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Reward the Good Soldier: A Dynamic Approach to Consumer Cost-Sharing for Prescription Drugs
September 26, 2016

Reward the Good Soldier: A Dynamic Approach to Consumer Cost-Sharing for Prescription Drugs

Since its inception in 2005, the University of Michigan Center for Value-Based Insurance Design (V-BID) has led efforts to promote the development, implementation, and evaluation of innovative health benefit designs balancing cost and quality. A multidisciplinary team of faculty, including A. Mark Fendrick, MD and Michael E. Chernew, PhD, who first published and named the VBID concept, have guided this approach from early principles to widespread adoption in the private and public sectors. The Center has played a key role in the inclusion of VBID in national healthcare reform legislation, as well as in numerous state initiatives. The basic VBID premise is to align patients' out-of-pocket costs, such as copayments, with the value obtained from health services and providers.
The implementation of these transformative, yet intuitive, design features are often at odds with the fact that: 1) most health plans require certain steps be performed by a patient before access to additional or more expensive therapies is granted (ie, step-edit); and 2) in many clinical scenarios, a patient will face higher cost-sharing for recommended treatments when first-line therapy is not indicated or does not work. When faced with clinically appropriate alternatives beyond first-line agents, a patient is often unable to escape higher out-of-pocket costs for essential medications.

Thus, an individual enrolled in a multi-tier formulary who perfectly complies with the treatment steps required by his/her health plan (aka “The Good Soldier”), but cannot safely take or does not respond to first-line therapy, faces ‘double jeopardy’ in that 1) their individual clinical circumstance does not permit the benefit from a lower cost agent, and 2) the recommended second-line therapy often has substantially higher consumer cost-sharing. An unintended outcome of these commonly employed prescription drug programs is that the sickest patients are often those who face the highest financial burdens.

A growing body of evidence concludes that increases in consumer cost-sharing in these vulnerable patient cohorts leads to a reduction in the use of essential services, worsens health disparities, and in some cases leads to greater costs for the patient, the health plan, and society.7 To mitigate these issues and prevent patients from being penalized for circumstances beyond their control, innovative solutions are warranted.
 

A ‘Dynamic’ Approach to Consumer Cost-Sharing: “Reward the Good Soldier"

The rapid expansion of precision medicine has important implications for how drug management strategies should be implemented. As treatment recommendations are increasingly based on individual patient characteristics (genotypic or phenotypic) and/or the natural history/progression of disease, a clinically nuanced drug benefit that acknowledges multiple treatment options for a single condition or patient is warranted. "Reward the Good Solider" is one such "dynamic design." The fundamental principle of this concept is to lower consumer cost sharing for clinically indicated services for those patients who diligently follow the required steps for their specific condition, but need an alternative treatment option.
 
The essence of the Reward the Good Soldier design strongly commits to existing policies that encourage first-line use of lower cost therapies when clinically indicated. The implementation is similar to commonly used step-therapy programs, with the important difference that consumer cost-sharing levels are lowered for the second-line (or third-line) treatment alternative, only when the first-line therapy is contraindicated or is deemed ineffective at achieving the desired clinical outcome. While an existing step-edit program is a common framework on which to build a Reward the Good Soldier design, the use of a step-edit program is neither a prerequisite nor required element to implement this dynamic benefit approach.
 
The precision medicine movement is founded on the principle that the health benefits provided by a particular service depend on the specific clinical circumstances around its use. The use of targeted and sequential therapies in a growing number of clinical circumstances supports the elimination of an archaic prescription drug cost-sharing model that does not share this fundamental premise. In its place, the implementation of a "dynamic" approach to drug cost-sharing that enhances access to effective, clinically appropriate therapies, improves patient outcomes, aligns with quality-driven provider initiatives, and promotes efficient expenditures for the payer is clearly warranted. Such innovation is an important and necessary step forward if the goal of “Right drug, right person, right time, right price” is to be ultimately achieved.
 
References
1. Chernew M. J Gen Int Med.  2010;25;243-8.
2. Goldman D. JAMA.  2007;298;61-9.
3. Trivedi NEJM.  2008;358:375-383.
4. Trivedi A. NEJM.  2010;362(4):320-8.
5. Kaiser Family Foundation/New York Times Medical Bills Survey http://kff.org/health-costs/press-release/new-kaisernew-york-times-survey-finds-one-in-five-working-age-americans-with-health-insurance-report-problems-paying-medical-bills/  (accessed May 25, 2016).
6. Chernew M. Health Affairs.  2007;26(2):195-203.
7. Chernew M. J Gen Int Med.  2008;23(8):1131-6.



 
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