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Supplements Improving Treatment Success Rates for Type 2 Diabetes: Balancing Safety, Cost, and Outcome [CME/CPE]

Diabetes Benefit Management: Evolving Strategies for Payers

Albert L. Tzeel, MD, MHSA, FACPE

Over the next quarter century, the burden of type 2 diabetes mellitus (T2DM) is expected to at least double. Currently, 1 in every 10 healthcare dollars is spent on diabetes management; by 2050, it has been projected that the annual costs of managing T2DM will rise to $336 billion. Without substantial, systemic changes, T2DM management costs will lead to a potentially untenable strain on the healthcare system. However, the appropriate management of diabetes can reduce associated mortality and delay comorbidities. In addition, adequate glycemic control can improve patient outcomes and significantly reduce diabetes-related complications. This article provides an overview of key concepts associated with a value-based insurance design (VBID) approach to T2DM coverage. By promoting the use of services or treatments that provide high benefits relative to cost, and by alternatively discouraging patients from utilizing services whose benefits do not justify their cost, VBID improves the quality of healthcare while simultaneously reining in spending. VBID initiatives tend to focus on chronic disease management and generally target prescription drug use. However, some programs have expanded their scope by incorporating services traditionally offered by wellness and disease management programs. The concept of VBID is growing, and it is increasingly being implemented by a diverse and growing number of public and private entities, including pharmacy benefit managers, health plans, and employers. This article provides key background on VBID strategies, with a focus on T2DM management. It also provides a road map for health plans seeking to implement VBID as part of their programs.

(Am J Manag Care. 2011;17:S384-S390)

Diabetes mellitus, a group of metabolic disorders associated with hyperglycemia, currently affects an estimated 25.8 million individuals, or 8.3% of the entire US population.1 The underlying etiology differs according to diabetes type, but recognized risk factors include obesity, sedentary lifestyle, genetic predisposition, and environmental factors.2

Type 2 diabetes mellitus (T2DM) accounts for the vast majority of diagnosed diabetes cases in the United States; about 18.8 million US residents have been diagnosed with T2DM, and an estimated 7.0 million adults have undiagnosed diabetes. Furthermore, nearly 79 million adults have prediabetes, a T2DM precursor marked by elevated glucose levels.1,2 Given the chronic, progressive nature of T2DM, as well as its multiple associated comorbidities, it is not surprising that the economic burden associated with this disease is substantial. Adults with T2DM have nearly 3 times the annual number of physician office visits compared with otherwise healthy individuals,2 and their medical expenditures are 2.3 times greater than for those without the disease.3

In 2007, it was estimated that medical costs and reduced work productivity associated with diabetes totaled $218 billion,2 with an average annual cost (including both medical and nonmedical costs) per patient of $9975 for individuals with diagnosed T2DM and $2864 for undiagnosed individuals (defined as unknowingly having an elevated glucose level that meets the criteria for diabetes, based on data obtained from the National Health and Nutrition Examination Survey).2,4

Put another way, more than 1 out of every 10 dollars spent in the United States on healthcare can be directly attributed to diabetes management.5 Specific expenditures include hospital inpatient stays ($40.3 billion), nursing home care ($13.9 billion), and physician office visits ($10 billion). In addition, in 2002, the annual cost of oral agents to lower blood glucose, insulin, and insulin-related supplies was estimated at approximately $12 billion.6

Over the coming quarter century, the population-level burden of diabetes is expected to at least double. This increase is related directly to an aging population and changes in the racial/ethnic composition of the United States. Within the next 25 years, it has been projected that the number of Americans with diagnosed and undiagnosed diabetes will reach 44.1 million, with related costs increasing to $336 billion.7

Without substantial and systemic changes in T2DM management, associated costs will lead to a pronounced and potentially untenable strain on an already overburdened healthcare system. This article will explain key concepts associated with a value-based approach to T2DM managed care coverage. It will discuss how several organizations have implemented value-based insurance design (VBID) in T2DM, as well as provide a framework for implementing a VBID approach for health plan members with T2DM. Last, it will forecast potential next steps in the development of value-based health plans.

Appropriate T2DM Management Reduces Morbidity and Cost

The appropriate management of diabetes can reduce associated mortality and delay comorbidities. Available literature shows that adequate glycemic control can improve patient outcomes and significantly reduce diabetes-related complications. In response to this evidence, national organizations such as the American Diabetes Association and the National Committee on Quality Assurance advocate for early T2DM diagnosis and optimal glycemic control (glycosylated hemoglobin [A1C] <7%).8 To achieve and maintain this target, however, patients typically require a progressively increasing number of medications.9,10

Improved glycemic control can also reduce both the direct and indirect costs related to diabetes.5 For example, Shetty et al reported that higher A1C levels were associated with increased costs. In this 1-year, retrospective database analysis, 3121 patients with T2DM (46%) were identified as being at target A1C levels, while 3659 patients (54%) were above target A1C levels. After controlling for confounders, the authors found that patients with T2DM who remained continuously at A1C levels of 7% or less had significantly lower total diabetes-related costs compared with patients whose levels climbed above target. The annual predicted diabetes-related costs for above-target patients were $1540 per patient; this was nearly one-third higher (32%) than costs incurred by the group who remained at target ($1171).11

Although evidence for the benefit of improved glycemic control in T2DM is fairly straightforward, treatment decision making and management can be complex. In 1995, the only therapeutic agents available to treat T2DM were insulin and sulfonylureas. However, during the past decade,9 additional new classes of oral antidiabetic medications have been approved for use.8 Additionally, in recent years, clinical research has directed attention to the elevated cardiovascular (CV) risk faced by patients with T2DM.12,13 Alongside this, the number and quality of medications known to effectively manage low-density lipoprotein (LDL) cholesterol and hypertension, and to prevent negative CV outcomes in patients with T2DM, has increased substantially.14 This has led to an increased recognition of the value of early, ongoing, multifactorial treatment of the glycemic, CV, and other complications of T2DM.10,15,16

National, population-level data show overall improvements among US adults in terms of maintaining recommended A1C levels, blood pressure, and cholesterol levels.17 However, for many individuals, diabetes care is far from ideal. An estimated 2.2 million individuals with diabetes, or 1 in 5, continue to have poor glycemic control (defined as an A1C level >9.0%). About 3.6 million, or 2 in 5 individuals with diabetes, have poor control of their LDL cholesterol levels, and 3.5 million, or 1 in 3, have suboptimal blood pressure control.18

Improving patient outcomes has proved to be a challenging task, as a number of barriers to care exist. Two of the most important barriers are patient adherence to pharmacotherapy and lifestyle modification, and provider adherence to guideline recommendations.5

Patient Adherence

Multiple factors contribute to poor blood glucose control in T2DM,5 but failure to adhere to medication regimens is a well-documented cause, and provides an appropriate target for health plans seeking to improve patient outcomes.

Estimates of patient adherence with oral antidiabetic agents vary substantially, and have been reported to range from 36% to 93%. Adherence to insulin therapy may be even lower in patients with T2DM, in the range of 62% to 64%.19 A recent analysis of published glycemic control studies reported that, in the majority of cases, improved medication adherence was associated with better glycemic control.20 Pharmacologic adherence in T2DM is also associated with a lower use of healthcare resources, including reduced hospitalization rates, while optimal adherence to therapeutic regimens has been shown to substantially reduce both costs and complications related to diabetes.5,21

A number of factors affect patient adherence to a treatment regimen, and the underlying reasons for nonadherence may be complex and multifaceted. Cost of care has been identified as one key cause of medication underuse. A study of adults with T2DM taking oral medications found that higher copays and coinsurance were associated with lower levels of refill compliance.22

As a means of controlling prescription drug costs, some health insurance plans and employers have increased drug cost sharing via strategies such as multitiered formularies, prior authorization, step therapy, and higher copayments and/or coinsurance. Although cost sharing often achieves its desired purpose of encouraging the use of generics and steering patients to preferred brand-name drugs, it can also have negative consequences.22 Cost sharing has been associated with treatment disruptions in patients with chronic illnesses22 and with poorer adherence.23 Cost sharing can also have a detrimental impact on the use of essential drugs, as patients may reduce the amount of drugs taken and/or skip doses in order to stretch out a refill.22

Value-Based Insurance Design

The need to contain costs while simultaneously improving quality of care and overall population health has proved to be a formidable challenge. A goal of increased patient cost sharing was to discourage the use of low-value care. For this to be achieved, it had to be assumed that patients could distinguish between high- and low-value care. However, a large and increasing body of evidence shows that, in response to higher out-of-pocket costs, patients tend to reduce their use of both high- and low-value services.23,24

VBID is a strategy developed to improve the quality of healthcare while simultaneously reining in spending. The University of Michigan’s Center for Value-Based Insurance Design has defined “value” as being the amount of health gained per dollar spent on healthcare services or benefits.23 VBID argues that, when examining the value of a drug or benefit package, both the cost and quality of services need to be considered. From this perspective, an approach that is considered “value based” is not necessarily less expensive, and it is recognized that lower cost benefits or treatments do not always culminate in health benefits that are of value.

VBID programs are intended to promote the use of services or treatments that provide high benefits relative to cost and, alternatively, discourage patients from utilizing services whose benefits do not justify their cost. While the design and implementation of these programs can vary, the basic goal is to reduce patient cost sharing for services associated with important clinical benefits. In the case of T2DM, it was suspected that there may be both health and cost saving benefits associated with removing financial restrictions limiting access to care.25

VBID initiatives in general tend to focus on chronic disease management and generally target prescription drugs.25 However, some programs have expanded their scope by incorporating services traditionally offered by other types of wellness and disease management programs. In a program initiated by UnitedHealthcare for patients with T2DM, for example, participants are given free access to online monitoring and education tools.23 The specifics of VBID programs will vary based on the insurance program type and populations served.25 Although programs differ, there are 4 basic approaches to VBID, which are shown in Table 1.23

Copyright AJMC 2006-2019 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
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