Supplements The Great Debate Part II: Should Managed Care Rely on Cost Sharing to Manage Big-ticket Biologics?
The following debate among Leslie Fish, RPh, PharmD, Diana I. Brixner, RPh, PhD, and Wayne M. Lednar, MD, PhD, is based on a moderated session held at the annual meeting of the Academy of Managed Care Pharmacy in Nashville, Tennessee, on October 7, 2005. Attendees of this meeting also participated by asking questions of the debaters and by responding to quick-polling questions posed by Mark Zitter.
Mr Zitter: I'm hearing that more and more payers as well as purchasers feel that we can't go too much further in the cost-sharing arena. Let's talk about some of those issues.
Dr Fish, at what point does the health plan start to get concerned about either a bad public relations hit or even legal action for somebody to say, "Look, I only make $35 000 per year and you want me to pay $6000 per year for therapy that my doctor says I need. You are not really covering me." That's really denying access altogether. Is that a consideration?
Dr Fish: Actually, no. We haven't had that conversation, because I don't think our outof- pocket, what patients pay, is anywhere near that figure. There are a few things we need to remember here. The first thing is that we haven't decided what costs or coinsurances should be. We're not saying they should be 30%, 40%, 50%. We wouldn't be true believers in the very high cost. I think you have to have that perfect cost, one that brings the patient back into the discussion, engages them, makes them understand that there is actually a value that they have to be respective of, enough to be sufficient, but not enough to break the bank. This is one of the things that we have to worry about when we worry about cost and the price for patients. We don't know what that perfect cost is. In fact, I'm interested in knowing the others' thoughts.
Dr Brixner: It's a great question. If we start taking all of these different cost aspects into consideration, maybe we can determine what that perfect cost is. Right now, it's like a balloon if we push in on one end. We want to keep our out-of-pocket maximums low and we don't want to increase the burden on our members. It's almost like catastrophic insurance for drugs now, because the drugs are so high. If we believe that this is all shifting, and the biologics are going to be used earlier and for more diseases, ultimately, we are going to have out-of-pocket maximums for probably 20% or 30% of our dollar volume utilization of drugs, and then the balloon suffers again. How do we push? Who is going to pay for that? Who is going to decide what the value is of that huge increase in costs for drug treatment?
Dr Lednar: The thought that comes to my mind is price sensitivity. When employers have open enrollments for their employees' selection of health plans, the question has been asked, how much of a price differential among the options of health plan choices seems to have enough money to allow choice to the extent that out-of-pocket costs are part of that choice? It turns out that there is not much of a dollar difference in monthly or biweekly premiums to choose a health plan. Many working people don't make a lot of money, and this is a substantial part of their family's income. If we're seeing choices of health plan enrollment that differentiate by as much as $20 to $30 biweekly in payroll deduction, what are we going to do with big-ticket biologics when you have a coinsurance payment for therapy? It is going to prompt a very difficult conversation for the patient and his/her doctor, because the doctor has a therapy that could work, but it is bankrupting to the patient. Although the patient has an illness and needs treatment, they could lose their job if they don't recuperate, but they cannot afford to pay for it. It's a big balloon, and there is no clear answer right now.
Dr Fish: Most employers say, "This is the amount of money we have. We know there are new biologics, new medications, and new technology, but we're not giving any more. This is really going to break our bank." Do we think there would be legal action? I think we worry more about not being able to give any therapy. So, again, we have X amount of dollars that we can use, than we have. At a certain point, if we do use the new medications for pulmonary hypertension and for Crohn's and for rheumatoid arthritis, we may have to say, "We are not going to be able to afford these medications." We don't want to say, "We have to take this group of medications away, because we have to add all of these new medications." There must be a balance.
Mr Zitter: So, we must do something. Dr Lednar, from your perspective, to what extent does an employer want to get involved in setting some kind of policy?
Dr Lednar: Keep in mind it is an employer's choice whether or not to offer health benefits. There is a pot of money that has been defined as available, and employers want that pot of money to be used to the very best advantage of their company's families. This is a big challenge, because spending at the far end of the clinical spectrum could steal away all of the money for those who could apply it for prevention, risk factor modification, or early disease management. Eventually, those people will get older and move into the more severe clinical progression. This is really where we need everyone's help. If we look at this pot of money today and see how wisely it is being spent, we might have some ideas. In our healthcare treatment system, we may have some resources that are not utilized, and they are costly to all of us. We need to spend our money on good patient treatment.
Mr Zitter: Because costs are increasing too fast, we should talk about ways to increase efficiency in the system. Dr Fish suggested that a good way to tackle that is through patient cost sharing, whether that means saving money or influencing patient behavior, particularly with biologics. Dr Brixner, let's say that cost sharing is a good way to approach this situation. Should we focus on cost sharing for hospital care, primary care physician services, or small molecules? What about cost sharing for biologic therapies?
Dr Brixner: If you look at high-ticket items in healthcare, the cost of biologics now are in competition with the cost for hip replacement surgery and other major surgeries. The cost for major surgery and hospitalization is $15 000 to $18 000. Now, we have these biological drugs that compete with that. If we look at cost sharing for biologics, we must break these silos down and look at cost sharing for hospitalizations as well. Traditionally, medical costs were usually completely covered, and this cost-sharing aspect was predominantly on the drug plan side. Part of the answer to this is looking across the spectrum and the continuum of healthcare. We must focus on the issues of medical costs, physician costs, and these drug costs, and how they interact together to decrease the overall expense based on their increased value.
The one other comment I wanted to make is that you can make more out of the money that you have, but we must demonstrate with evidence that there are genuine benefits.
Dr Lednar: What Dr Brixner describes is really going to be a significant and monumental mind shift in business.
Dr Fish: Speaking as a Pharmacy and Therapeutics Committee member, we do talk about decreasing utilization in other areas, such as physician visits. However, we don't see this done as much as we would expect.
Mr Zitter: What are our alternatives? What if the government made patient cost sharing illegal? What are the alternatives to try to save money on the pharmacy side that we haven't tried enough, particularly when you are looking at high-tech biologics?
Dr Brixner: It's not about saving money. What we want to do is take that money and use it appropriately. At that point, we would go back to leaning on the physician to make the choice with the patient. The doctors don't want that full decision; they want the patients to know more about the decision. I would say the emphasis would be on the doctor to explain the medication and how it works.
Mr Zitter: You mentioned that there are no good data for the impact of cost sharing on biologic therapies. Couldn't it be argued for biologic therapies, because they tend to treat the diseases that are often much more serious and they're usually not the first-line therapies people take in many cases, cost sharing may have a lesser impact on adherence or outcomes, because they're so important that people would be more likely to continue to adhere?
Dr Brixner: I absolutely agree. If we began to collect data on the adherence impact of cost sharing in biologics, it would be far less than what we're seeing in the more common medicines. There are 2 reasons for that. First, the seriousness of the disease will make the patient more committed. But, there is also the frequency aspect. Many of these biologics are subacute therapies once per month, once every 4 weeks, or sometimes even longer intervals. So, the direct impact on adherence would be far less than what we're seeing on drugs that we take once or more than once per day.
Dr Fish: One thing that's interesting is that biologics are now designed for the more common diseases and the non-life-threatening areas. We've switched from the very rare to the very serious to the more common areas. That's where our thought processes have to go.
Mr Zitter: Of course, in the more common diseases, biologics wouldn't be first-line therapies, and they would only be used in extremely serious cases.
Audience Participant: In terms of response and better management of the high-cost biologics, there is certainly some good evidence that the specialty pharmacies have done some good work in that area. As a comparison, health plans have spent a good deal of money per member per month for smoking cessation and coronary heart failure programs. Is there an opportunity now for better solutions for medication therapy management in the high-cost biologics area that deliver the kind of value that we really should be getting from them?