The American Journal of Managed Care
June 2007 - Part 2
Volume 13
Issue 6 - Pt 2

Effects of Benefit Design Change Across 5 Disease States

Objective: To assess the effects of benefit design change (BDC) on medication adherence and persistence (including switch in therapy), drug costs, and total healthcare costs.

Study Design: A retrospective study was performed using administrative claims data from an integrated healthcare system between January 2001 and December 2002.

Methods: Continuously enrolled patients in 2001 and 2002 with allergic rhinitis, asthma, diabetes mellitus, hypertension, or osteoarthritis belonged to employer groups with or without a pharmacy BDC as of January 1, 2002. Prescription status (same, switch, or discontinue), adherence among patients receiving therapy, and differences in drug costs and total healthcare costs for each disease state were measured between groups. Bivariate and multivariate statistics were used to test differences in outcomes between groups.

Results: Compared with the group without BDC, the proportion of patients who discontinued drug therapy was significantly greater in the BDC group among those with allergic rhinitis (67% vs 54%), asthma (66% vs 50%), osteoarthritis (61% vs 36%), and hypertension (39% vs 18%) (P < .05 for all). Medication compliance was not affected by BDC. The year-to-year pharmacy costs per patient in the BDC group decreased $305 for patients with osteoarthritis (P < .001) and $95 for patients with allergic rhinitis (P = .03). There was no significant effect on overall healthcare costs in any disease state during the year following the BDC.

Conclusion: A pharmacy BDC may result in decreased pharmacy costs, with no effect on overall healthcare costs within 1 year for patients with allergic rhinitis, asthma, hypertension, or osteoarthritis.

(Am J Manag Care. 2007;13(part 2):370-376)

Patients exposed to benefit design change were compared with those not exposed to benefit design change across 5 disease states, including allergic rhinitis, asthma, diabetes mellitus, hypertension, and osteoarthritis.

Except for diabetes mellitus, benefit design change led to more changes in utilization and to a decrease in pharmacy costs; however, it did not affect adherence or total costs during a 1-year time frame.

This information may assist managed care decision makers in making benefit design change choices that lower pharmacy costs without jeopardizing quality of care.

Since 1996, employers and other payers of prescription drug benefits have seen growth in annual spending expand to double digits.1 Strategies to counter this growth in drug benefit costs have included shifting more of the financial responsibility for prescription drugs to employees and to drug benefit plan members. One of the major pharmacy benefit managers in the United States reported that mean copayments for nonpreferred medications recently increased by more than 70%, from $17 in 2000 to $33 in 2004.2

During the past 20 years, researchers have examined different populations to try to determine how well patients comply with their medication regimens.3-6 The effects on compliance and on total healthcare costs of increasing patient contributions toward prescription medication payments must be considered.

With Americans paying higher copayments for their prescriptions, there has been significant interest in the effects of these increases on compliance, persistence, health status, and overall healthcare expenditures. Motheral and Fairman7 examined copayments and their effects on compliance and on overall medical use. Although the conclusions of this study showed that drug expenditures decreased and that compliance and medical use were not affected, the study considered chronic therapies, without close inspection of specific diseases or medications.

A study performed by Huskamp et al8 concluded that there was a decrease in the use of proton pump inhibitors for treatment of gastroesophageal reflux disease and other gastrointestinal disorders, as well as in the use of angiotensin-converting enzyme inhibitors in the treatment of hypertension, when substantial changes in copayments were implemented. Goldman et al9 in 2004 examined medication use associated with specific disease states. The researchers found that antihistamine and nonsteroidal anti-inflammatory drug utilization was significantly reduced when copayments were doubled. Despite a $10 increase in prescription copayment, Meissner et al10 found no significant effects on drug utilization (low-sedating antihistamines and nasal corticosteroids) among patients with allergic rhinitis; however, health plan costs decreased significantly. Most recently, a study by Taira and colleagues11 reported the effects of increased tiers on patient compliance in hypertension. In this study, the adjusted odds ratios for patients with $20 and $20 to $165 copayments were 0.76 and 0.48, respectively, versus patients with a $5 copayment. These studies highlight how difficult it is to conclusively determine what effect higher copayments have on patient outcomes and expenditures. The concern is that if benefit design change (BDC) in general becomes a barrier to patient medication use, accessibility to necessary medications may be compromised.

The objectives of the present study were to evaluate the effects of pharmacy BDC on prescription utilization as measured by discontinuation and by switching across select disease conditions and to assess the effects of BDC on medication compliance and on drug costs and total healthcare costs among beneficiaries in an integrated healthcare system. Five diseases (asthma, diabetes mellitus, hypertension, osteoarthritis, and allergic rhinitis) were selected for inclusion to provide a mix of chronic and episodic conditions.


Study SettingIntermountain Healthcare (IHC) is an integrated not-forprofit healthcare system based in Salt Lake City, Utah. Intermountain Healthcare has been ranked number 1 in Modern Healthcare's top 100 integrated healthcare networks and is recognized for its pursuit of continuous quality improvement.12-14 The IHC system consists of a health maintenance organization health plan, 21 hospitals, 150 medical facilities and physician offices, 450 physician employees (including 350 primary care physicians), 2500 affiliated physicians, and approximately 425 000 members in the health plans. Pharmacy benefit management services are provided internally by SelectHealth, Salt Lake City.

Study Design

Beneficiaries were included if they had been enrolled in an IHC plan for 2 full calendar years beginning January 2001 through December 2002. Those meeting the continuous enrollment criteria were included if they had evidence of at least 1 of 5 targeted disease conditions based on the presence of claims for drugs normally used to treat the disease condition of interest. Drug groups were defined by 4-digit or 6-digit Medispan Generic Product Identifier codes to assure that all drug claims were captured.

Only patients receiving drug monotherapy were included in the analysis in an attempt to reduce the potential confounding of compliance and cost results. Therefore, patients who had pharmacy claims for multiple medications to treat a given disease were excluded from the analysis. For example, a patient taking both an angiotensin-converting enzyme inhibitor and a calcium channel blocker for treatment of hypertension were excluded. However, patients with claims for different medications to treat 2 separate diseases were included in each disease category analyzed.

Members who had no pharmacy copayment increase for 2 full calendar years from January 2001 through December 2002 served as study control subjects, compared with members who had a pharmacy copayment increase in year 2 (January 2002 through December 2002). For the purposes of this study, we defined BDC as a copayment increase in the second or third tier of $5 or greater or as a change from a flat copayment to a percentage coinsurance. The general strategy for employer groups was to raise the incentive to use generic medications and formulary brands by increasing the copayment differential between generics and tier 1, between formulary brands and tier 2, and between nonformulary brands and tier 3 by increasing the tier 2 copayment or tier 3 copayment or both.

Study Variables

Data were analyzed using Intercooled STATA 8.0 for Windows (StataCorp LP, College Station, Tex). All statistical tests were conducted at α = .05. Descriptive statistics were computed where appropriate. Effects of pharmacy BDC on prescription switching and discontinuation behavior, compliance, and total healthcare costs were analyzed. An overall χ2 test was conducted, followed by post hoc tests to determine which stratum was significantly different between the copayment increase group and the control group.

Because of the skewed nature of medical care costs and MPRs, the differences between 2001 and 2002 medical care costs and MPRs were used as dependent variables. The differences in costs and MPRs demonstrated a gaussianlike distribution. Analysis of covariance was used to determine the effect of BDC on the differences in costs and MPRs after adjusting for age and sex. The main effect was the study group.


The health plans for 672 IHC employer groups were analyzed. Of those, 228 plans representing 56 690 continuously enrolled members (71.6%) had no change in pharmacy benefit structure between 2001 and 2002, and 444 plans representing 22 463 continuously enrolled members (28.4%) had a change in pharmacy benefit structure between 2001 and 2002. Patients with hypertension, allergic rhinitis, and osteoarthritis were identified by International Classification of Diseases, Ninth Revision codes in addition to drugs by therapeutic class. or patients with use of medications to treat allergic rhinitis, 26% had an International Classification of Diseases, Ninth Revision code; the percentages with codes were 8% for hypertension and 14% for osteoarthritis. The study sample that met the inclusion criteria totaled 7939. Of this study population, 1580 were classified as having allergic rhinitis, 1149 had asthma, 1490 had diabetes mellitus, 3569 had hypertension, and 1060 had osteoarthritis (Figure). Subjects who were treated for 2 or more diseases of interest (n = 909) were categorized into more than 1 disease condition for analysis.

In the allergic rhinitis and asthma groups from 2001 to 2002, there were statistically significant decreases in pharmacy costs in the BDC group of $95 (P = .03) and $269 (P < .001) per patient per year, respectively (Table 3). In the hypertension and osteoarthritisgroups, the decreases were $180 and $305, respectively (P < .001 for both). Pharmacy

We thank Joseph Biskupiak, PhD, and Carrie McAdam Marx, MS, for their valuable advice and support throughout this study, as well as Barbara Larney Roper for her editorial ssistance.

Author Affiliations: From the Department of Pharmacotherapy, College of Pharmacy, University of Utah (DIB, GMO), Intermountain Healthcare (DMH), and SelectHealth (HEC), Salt Lake City; Sanofi Aventis, Bridgewater, NJ (VNJ); and PartnersRx, Scottsdale, Ariz (SGA). Funding Source: This study was supported in part by a research grant from the Foundation for Managed Care Pharmacy. This study was presented in part at the 16th Annual Meeting & Showcase of the Academy of Managed Care Pharmacy; April 2, 2004; San Francisco, Calif.

Correspondence Author: Diana I. Brixner, PhD, RPh, Department of Pharmacotherapy, College of Pharmacy, University of Utah, 421 Wakara Wy, Rm 208, Salt Lake City, UT 84108. E-mail:

Author Disclosure: The authors (DIB, HEC, VNJ, GMO, SGA, DMH) report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter discussed in this manuscript.

Authorship Information: Concept and design (DIB, VNJ, GMO, SGA, DMH); acquisition of data (SGA, DMH); analysis and interpretation of data (DIB, VNJ, SGA, DMH); drafting of the manuscript (DIB, GMO, SGA, DMH); critical revision of the manuscript for important intellectual content (DIB, GMO); statistical analysis (VNJ); obtaining funding (DIB, SGA); administrative, technical, or logical support (DIB, GMO); supervision (DIB, GMO).

2. Kaiser Family Foundation. Prescription drug trends. Available at: Accessed November 11, 2005.

4. Vic SA, Maxwell CJ, Hogan DB. Measurement, correlates and health outcomes of medication adherence in the elderly. Ann Pharmacother. 2003;38:303-312.

6. Sokol MC, McGuigan KA, Verbrugge RR, Epstein RS. Impact of medication compliance on hospitalization risk and health care cost. Med Care. 2005;43:521-530.

8. Huskamp HA, Deverka PA, Epstein AM, et al.The effect of incentivebased formularies on prescription-drug utilization and spending. N Engl J Med. 2003;349:2224-2232.

10. Meissner BL, Moore WM, Shinogle JA, Reeder CE, Little JM. Effects of an increase in prescription copayment on utilization of lowsedating antihistamines and nasal steroids. J Manag Care Pharm. 2004;10:226-233.

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