The American Journal of Managed Care February 2011
Abolishing Coinsurance for Oral Antihyperglycemic Agents: Effects on Social Insurance Budgets
Estimation of the total investment cost was based on data by Liatis et al32 indicating that the mean annual cost of pharmaceuticals for patients managed with OAAs only is €352 per patient. Consequently, the increase in OAA reimbursement rate from 75% to 100% would result in a total investment cost of €26,401.30 over a 3-year period for the hypothetical cohort of 100 patients.
Therefore, the net economic benefit of the investment would be €32,429.30 per 100 patients or €324.30 per patient, reflecting an investment return rate of 122.8%. These data are summarized in Table 2.
A 1-way sensitivity analysis was conducted by calculating the investment return rate when the model variables were varied ±20% from baseline (Table 3). The analysis demonstrated that in all cases full coverage of OAAs remained profitable, with investment return rates ranging from 69% to 176.6%. Performing a threshold sensitivity analysis for predicted adherence showed that the outcomes remained favorable even for an incremental increase of 13.26% in baseline adherence. A 2-way sensitivity analysis of the variables with the greatest effect on results (ie, baseline adherence relative to sharing in the cost of complications among controlled and uncontrolled patients) revealed favorable results for all combinations of the 2 variables within the specified ±20% range (Table 4).
Patient cost sharing, especially in the case of chronic diseases, is a matter of intense debate. The present study was conducted to evaluate economic outcomes for a third-party payer that could result from abolishing coinsurance for OAAs. The study method was based on construction of a research hypothesis in the context of limited data availability from the Greek healthcare sector. A potential decrease in patient coinsurance rate translated to improved prescribed treatment adherence and to subsequent clinical and financial benefits of decreased A1C levels. This well-established relationship between A1C levels and clinical outcomes and costs10-12,14 was quantified by calculating the incremental increase in the percentage of controlled patients with diabetes in Greece and reflected the economic benefit of the intervention.
The final cost–benefit results of potentially abolishing copayments for OAA revealed that this could be beneficial for the SHI system. Specifically, the intervention translated to a 122.8% investment return rate over 3 years, a rate many times greater than the usual credit return on capital in developed economies. In monetary terms, if the system invested €264 for every patient with T2DM managed with OAAs, it could obtain a net benefit of €324.30 per patient over a 3-year period by preventing more intensive follow-up patterns and management of complications. Full-scale implementation of this policy for all 448,500 patients with diabetes managed solely with OAAs in Greece5 would require a total investment of €118,404,000 and could lead to a potential 3-year net benefit of €145,448,550.
The present study outcomes are in line with literature that documents the inverse relationship between cost sharing and treatment adherence, as well as subsequent effects on patients’ clinical status and health expenditures.23-26,33 Most of these studies investigate the consequences of increased cost sharing, whereas few approach the issue from the perspective of decreasing coinsurance rates or copayments. To our knowledge, the present study is the first to examine the effects of abolishing copayments for OAAs in a European universal coverage setting and demonstrates that the introduction of such policies in the management of chronic conditions could result in improved outcomes and economic benefits for patients and in cost savings for third-party payers.
Our study has some limitations. Because of the limited time frame of the analysis (3 years), calculations focused on the estimation of costs attributed only to short-term complications. This limitation can arguably lead to underestimation of results given that long-term diabetic complications are associated with higher morbidity and costs. In addition, the allocation of complication costs to controlled and uncontrolled patients was based on the study by Menzin et al,13 who adopted an A1C level control threshold of 8%, in contrast to the 7% threshold in existing guidelines.9 This contributes to further underestimation of the results. Moreover, Menzin et al do not report patient characteristics such as the presence of other (nondiabetic) complications or concomitant medications; therefore no assumptions could be made on these variables for our study population.
Another important issue is the cross-country transferability of elasticity estimates. In general, research on price elasticity of demand for pharmaceuticals remains scarce outside of the United States (particularly in Europe). To our knowledge, the only study on cross-country comparisons of elasticity is by Alexander et al,36 who concluded that price elasticities for a representative sample (“basket”) of prescription medications were identical in the United States, Italy, and Spain. Given that the latter 2 countries have health systems, socioeconomic indices (eg, gross domestic product per capita), and demographic characteristics comparable to those of Greece, transferability of elasticity estimates seems plausible. Nevertheless, this was further corroborated by testing the estimates with extensive sensitivity analyses.
Furthermore, our base-case analysis assumes that the resultant adherence remains stable over the study period, as in similar investigations.35 To address the possibility that this effect may not prove to be uniform over time, rigorous sensitivity analyses on baseline and predicted adherence were performed. The threshold sensitivity analysis demonstrated that a change in adherence of only 13.26% above baseline would still produce favorable results. This increase corresponds to an extremely low elasticity of 0.10, suggesting that the true response to abolishing copayments would be substantially higher and the results economically beneficial.
Finally, patient cost sharing, although important, is not the only factor influencing adherence. That other factors contribute to adherence levels has been expressed in the model by divergence of predicted adherence after full coverage (91.5%) from absolute adherence. These variables constitute an area for further investigation.
In conclusion, our study demonstrates that abolishing copayments for OAAs could generate significant economic benefits for the SHI system and for society as a whole. The results add to existing evidence supporting that cost-sharing policies do not always serve policy makers’ initial intentions because shifting cost to patients with chronic illness can produce adverse clinical and economic effects. Our sensitivity analysis corroborated the robustness of the results, suggesting that implementation of policies aimed at decreasing or abolishing copayments for OAAs could result in improved patient outcomes and in cost savings for the healthcare system.
Author Affiliations: From the Department of Health Economics (KA, AGS, VT, KM, JK), National School of Public Health, Athens, Greece.
Funding Source: The authors report no external funding for this study.
Author Disclosures: The authors (KA, AGS, VT, KM, JK) report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.
Authorship Information: Concept and design (KA, AGS, JK); analysis and interpretation of data (KA, AGS, VT, KM); drafting of the manuscript (KA, AGS, VT, KM); critical revision of the manuscript for important intellectual content (KA, AGS, VT, JK); and supervision (KA, JK).
Address correspondence to: Kostas Athanasakis, MSc, Department of Health Economics, National School of Public Health, 196 Alexandras Ave, Athens 11521, Greece. E-mail: email@example.com.
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