Impact of health plan design and management on retirees' prescription drug use and spending, 2001

Health Affairs

Volumn 22, Issue SUPPL., 2003, Pages

  Thomas, Cindy Parks ^a,b   Wallack, Stanley S ^a   Lee, Sue ^c   Ritter, Grant A ^c  

^a BRANDEIS UNIVERSITY   (United States)

^b Prescription Drug Analysis Group   (United States)

^c Schneider Institutes   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 27544452086     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: None     Document Type: Article

References (22)

1. Centers for Medicare and Medicaid Services, "Table 2: National Health Expenditure Amounts, and Average Annual Percent Change by Type of Expenditure: Selected Calendar Years 1980-2011," 2002, www.cms.hhs.gov/ statistics/nhe/projections-2001/t2.asp (1 November 2002).
2. Merck-Medco, Drug Trend Report 2001 (Franklin Lakes, N.J.: Merck-Medco, 2001);
3. AdvancePCS, 2001 Drug Trends Report (Irving, Tex.: AdvancePCS, Spring 2002);
4. and B. Bos, "Fifteenth Annual Mercer/FosterHiggins National Survey of Employer-Sponsored Health Plans," 2001, www.imercer.com/us/ imercercommentary/Healthsurvey/BB-final.pdf (1 November 2002).
5. J.A. Poisal and G.S. Chulis, "Medicare Beneficiaries and Drug Coverage," Health Affairs (Mar/Apr 2000): 248-256.
6. See, for example, A. Leibowitz, W.G. Manning, and J.P. Newhouse, "The Demand for Prescription Drugs as a Function of Cost-Sharing," Social Science and Medicine 21, no. 10 (1985): 1063-1069;
7. A.L. Hillman et al., "Financial Incentives and Drug Spending in Managed Care," Health Affairs (Mar/Apr 1999): 189-200;
8. R.E. Johnson et al., "The Effect of Increased Prescription Drug Cost Sharing on Medical Care Utilization and Expenses of Elderly Health Maintenance Organization Members," Medical Care 35, no. 11 (1997): 1119-1131;
9. and R. Tamblyn et al., "Adverse Events Associated with Prescription Drug Cost-Sharing among Poor and Elderly Persons," Journal of the American Medical Association 285, no. 4 (2001): 421-429.
10. N. Vasilopoulos, Presentation to the National Health Policy Forum, April 2002;
11. V.V. Goff, Pharmacy Benefits: New Concepts in Plan Design, National Health Policy Forum Issue Brief no. 772 (Washington: George Washington University, 8 March 2002);
12. and J. Gabel et al., "Job-Based Health Benefits in 2002: Some Important Trends," Health Affairs (Sep/Oct 2002): 143-151.
13. D. Segedin, "Three-Tier Copayment Plans: Design Considerations and Effectiveness," Drug Benefit Trends II, no. 9 (1999): 43-44, 46-48, 51-52.
14. B. Motheral and K. Fairman, "Effect of a Three-Tier Prescription Copay on Pharmaceutical and Other Medical Utilization," Medical Care 39, no. 12 (2001): 1293-1304.
15. C.M. Roe, S.M. Heinle, and E.R. Cox, "Design of a Three-Tier Benefit and Cost Trend," Drug Benefit Trends 14, no. 8 (2002): 22-26.
16. G.F. Joyce et al., "Employer Drug Benefit Plans and Spending on Prescription Drugs," Journal of the American Medical Association 288, no. 14 (2002): 1733-1739.
17. Because enrollees in our sample were selected on the basis of age (sixty-five and older) rather than work status, some in our sample may be working rather than retired.
18. Most plans had cost-sharing incentives to purchase mail-order prescriptions. For instance, mail-order copayments were often up to twice as high as those for retail purchase of prescriptions, but they covered a ninety-day supply. Thus, copayments for mail-order purchase could effectively be as little as one-third those for retail purchases. According to sources a: the PBM, it is typical for employer-sponsored and union plans to use mail order to a greater extent than HMOs or other insurers do.
19. Average copayment per prescription was calculated as the ratio of total member cost divided by total ingredient cost, including dispensing fee. The average actual copayment for retail purchase of a brand-name drug was $13.95 across all plans and prescriptions (the average brand-name copayment for mail-order purchase was $7.35 for a thirty-day supply). The mean copayment amount across all prescriptions (retail and adjusted mail order) was $9.13; median, $6.34).
20. R.R. Henderson and B.R. Motheral, "Mail Order Pharmacy: A Case Study," Drug Benefit Trends 13, no. 9 (2001): 28-34, 38.
21. We were unable to assign tiers to prescriptions in coinsurance plans or mail-order purchase, so this analysis was restricted to three-tier copayment plans and retail purchases.
22. Savings in this case were calculated in the following manner: Plans were grouped by strong versus weaker prior authorization controls according to PBM measures, including the proportion of times a claim was denied through prior authorization. Then for each category (strong versus weaker controls), the average cost per prescription for all users of prescriptions in the therapeutic class was calculated. The difference in cost per user in several therapeutic classes for strong versus weak prior authorization plans was then determined and is reported here.