The American Journal of Managed Care February 2011
Abolishing Coinsurance for Oral Antihyperglycemic Agents: Effects on Social Insurance Budgets
Objective: To assess the effects of abolishing coinsurance for oral antihyperglycemic agents (OAAs) on the social insurance fund budget in Greece.
Study Design: A mathematical model estimating the effect of a decrease in patient coinsurance rate on demand for and adherence to OAAs and the subsequent clinical and economic outcomes.
Methods: Price elasticity of demand for antidiabetic agents was used to estimate quantity demand change as a result of a coinsurance rate decrease and consequent increased adherence to OAAs. Given the inverse relationship between OAA adherence and glycated hemoglobin (A1C) level, the model calculated the mean decrease in A1C level and associated cost savings based on the cost difference between patients with controlled versus uncontrolled A1C levels.
Results: A decrease in patient coinsurance rate from 25% to 0% led to an incremental increase in OAA adherence of 30.5% and a mean decrease in A1C level of 0.6%. The A1C level decrease contributed to an 18.5% "shift" of uncontrolled patients to controlled A1C levels (<7%), which in economic terms translated into savings of 324 euro per patient over a 3-year period and an investment return rate of 122.8%. A series of 1-way and 2-way sensitivity analyses were conducted to verify the robustness and validity of the outcomes.
Conclusion: The introduction of policies aimed at abolishing coinsurance for OAAs can result in improved patient outcomes and cost savings for the healthcare system.
(Am J Manag Care. 2011;17(2):130-135)
- The findings indicate that full coverage of OAAs can result in clinical and economic benefits for patients and in cost savings for the healthcare system.
- Cost-sharing policies targeting drugs for chronic conditions should be carefully examined and specifically designed for each therapeutic class and pharmacologic subgroup before implementation to avoid adverse clinical and economic effects.
Diabetes is a widespread disease in Greece, affecting 7.6% of men and 5.9% of women among the general population (based on 2005 data).4 The total direct cost of T2DM in 2009 was €2.3 billion, or 12% of the country’s annual health expenditure,5 which is comparable to respective US findings6 but is well above the European mean (3%-6%).7
The significant expenditures attributed to diabetes result from the need for intensive patient monitoring, particularly for the management of diabetic complications, which accounts for 55% of total patient costs.7 The occurrence of complications is largely attributed to poor control of glycated hemoglobin (A1C) level,8 which, according to guidelines, should not exceed 7%.9 Adequate control of A1C level has been shown to prevent or delay the occurrence of complications and to contain diabetes- related costs.10-14
Adherence to treatment is a commonly accepted prerequisite for achieving glycemic goal (A1C level <7%).1 As a result of several factors,15 much evidence reveals poor or partial adherence,16-19 with one of the most important variables being the cost of treatment.20,21 Specifically in the case of chronic diseases, patient cost sharing can lead to reduced consumption of essential drugs and consequently to poor adherence, adverse clinical outcomes, and increased costs.22 This relationship has been documented for diabetes (eg, Karter et al,22 Piette et al,23 Mahoney, 24 Colombi et al25) and for other chronic conditions (eg, Joyce et al,26 Gibson et al,27 Gibson et al28).
To improve treatment access, the Greek Social Health Insurance (SHI) system has abolished coinsurance for several chronic illnesses, including diabetes. However, the 0% coinsurance rate applies only to patients with insulin-dependent diabetes, while those receiving oral antihyperglycemic agents (OAAs) are subject to a 25% coinsurance rate.
In light of this, the present study aimed to assess the costs and benefits of a potential coinsurance rate decrease from the existing 25% to 0% for OAAs in a universal coverage setting. Particularly tested was the hypothesis that economic benefits for the Greek SHI system from full coverage of OAAs would outweigh the relative costs. Therefore, extension of coverage would be accompanied by economic and clinical benefits for patients and by cost savings for the third-party payer, the perspective from which this analysis was conducted.
The study method focuses on transformation of the research hypothesis into a mathematical model populated with literature data. A PubMed literature review was performed using the following 4 combinations of key terms: A1C and complications, A1C and adherence, adherence and complications, and adherence and cost-sharing. Results were limited to articles published in English or in Greek between January 1, 2000, and December 31, 2009. Studies about type 1 diabetes, long-term complications, and treatments other than OAAs were excluded. From the remaining articles, we selected those that provided quantitative data for the relationship between coinsurance rate and adherence, adherence and A1C level, A1C level and short-term complications, price elasticity and demand for OAAs, and costs and clinical outcomes of T2DM. Where available, studies reporting Greek data were used.
The model initially attempted to estimate the effect of a potential decrease in cost sharing on the demand for OAAs and to convert increased demand into improved adherence. Given the documented inverse relationship between OAA adherence and A1C level,29 this change in adherence was used to estimate the mean change and the new A1C levels compared with baseline. Taking into account changes in A1C level and A1C level distribution in the population with T2DM in Greece, the number of uncontrolled patients who “shift” to controlled A1C levels was estimated. The mean and total cost differences between controlled and uncontrolled patients are key points of the model on which the economic benefits of potential full coverage are estimated. Specifically, the change in demand for OAAs resulting from a coinsurance rate decrease was estimated by price elasticity of demand, derived from the literature (as detailed in the next paragraph). Because of particularities among the pharmaceutical market in which reimbursement for drugs takes place within the perspective of social insurance, a nonlinear relationship exists between price and quantity demand.30 Therefore, the use of arc elasticity rather than elasticity of a linear demand curve was considered more appropriate on scientific grounds.
Adherence to treatment was derived from the medication possession ratio (MPR), defined as the ratio of the total number of days for which the patient was supplied with the prescribed drug to the duration of follow-up.25,31 When the total quantity is increased, the number of days for which the patient was supplied with OAAs is increased accordingly (assuming that the patient consumed the supplied drugs), and the adherence rate to treatment also rises by extension. Marginal increase in adherence is calculated based on baseline adherence to OAAs, which was drawn from the literature (Table 1) because of the absence of relative Greek data. For a conservative approach, the value was chosen from the midrange reported in a review of adherence rates to diabetes medications.20
According to the literature, an incremental increase in OAA adherence leads to a decrease in A1C level.29 Specifically, a 10% increase in adherence results in a mean A1C level reduction of 0.19% (Table 1). Marginal increase in adherence from the elimination of cost sharing will result in improved clinical outcomes (decreased A1C levels) for the variables on which the possible economic benefits are examined. For consistency, all studies that provided data for the model measured adherence by the same method used for the model calculations analyzed earlier.
The total direct cost of diabetes can be analyzed as (1) the direct cost for patient monitoring and follow-up and (2) the cost for management of complications. To date, the only study reporting T2DM cost data for Greece is by Athanasakis et al,5 who estimated the mean annual direct cost of follow-up per patient in patient groups (controlled vs uncontrolled) and the mean cost of follow-up and complications regardless of A1C level control.
Given that the 2 patient groups (controlled vs uncontrolled) contribute differently to the total cost of complications, it was necessary to allocate the expenses based on the method by Menzin et al.13 Their study was performed among a sample of patients with baseline demographic characteristics comparable to those of the general population with diabetes in Greece (mean age, 63.4 years13 vs 63.8 years5; and ratio of men to women, 55.1-44.913 vs 56.1-43.94), and the authors concluded that controlled and uncontrolled patients
contributed 37.4% and 62.6%, respectively, to the total cost of diabetic complications over 3 years (Table 1). The results of the cost allocation for complications were added to the follow-up cost reported by Athanasakis et al5 to estimate the total cost of T2DM among patients in Greece over a 3-year period based on level of A1C control.
The cost difference and subsequent aggregate cost savings resulting from better adherence and improved control formed the basis of the predicted economic benefit of the intervention. The cost of the intervention was calculated based on prescription data for patients with T2DM by Liatis et al.32 All costs were adjusted to 2009 prices using a 3.5%
discount rate. Model variables are summarized in Table 1.
To evaluate the robustness of the outcomes, results were subjected to a series of 1-way deterministic sensitivity analyses by testing different values of the key variables in themodel. A 2-way sensitivity analysis was performed for the variables that had the greatest effect on results.
According to the base-case analysis, a decrease in patient coinsurance rate from 25% to 0% would lead to an OAA price reduction, which would result in a 50% quantity demand increase based on the arc price elasticity of −0.25 used.33,34 With an assumed baseline adherence of 61%35 (eAppendix available at www.ajmc.com) and a follow-up duration of 365 days, a 50% rise in quantity demand would increase the days that a patient complied with treatment from 222.65 to 333.98. According to the MPR, this change would result in an incremental OAA adherence increase of 30.5% (assumed to remain stable during the study period). Based on the inverse relationship between OAA adherence and A1C level, the model predicts a mean decrease of 0.579% in A1C levels.
According to Liatis et al,32 the A1C level distribution among Greek patients with diabetes follows a normal distribution, with a mean (SD) of 7% (1.2%). The distribution mean coincides with the threshold A1C level between controlled and uncontrolled patients according to guidelines.9 Based on the normal distribution (mean [SD], 7% [1.2%]), the calculated mean A1C level decrease would cause the distribution to shift to the left, resulting in an 18.5% incremental increase in the number of patients with A1C levels of 7% or less.
According to Athanasakis et al,5 the follow-up costs of controlled and uncontrolled patients with T2DM over a 3-year period are €3159 and €5045, respectively (Table 1), whereas the mean annual follow-up cost is €4177.50 per patient irrespective of A1C control. The overall 3-year mean patient cost is €9284.30,5 of which €5107 are expenses due to complications. As already mentioned, complication expenses were allocated to the 2 groups according to the ratio by Menzin et al,13 resulting in complication costs for controlled and uncontrolled patients of €1910 and €3197, respectively, and 3-year total costs (follow-up and complications) of €5069 and €8242, respectively. Consequently, the estimated 3-year cost difference between a controlled and uncontrolled patient is €3173.