Value Based Plan Design Study: Lower Copays Lower Costs Improve Adherence



Value based insurance design is care that is designed to improve outcomes using financial incentives. It promotes preventative care and efforts to avoid waste, seeking better outcomes through equal, but less costly alternative treatments. A recent study showed that VBID for prescription drugs, not only improved medical adherence, but it also reduced costs. The methods of the program were radically straightforward. The study group was not charged copays for a long list of chronic care medications. The results could inspire an industry wide trend to change how payers approach chronic care and adopt value based insurance design for prescription drugs.

Medication non-adherence is an enormous problem, especially among older patients, that contributes to unnecessary costs for payers and hardships on patients. The statistics show that many factors impact a patient’s adherence. A person’s age, number of prescriptions, and cost of copays all negatively impact adherence as they increase. The results could mean repeated hospital stays and avoidable surgeries. The costs of failing to take one’s medications can be enormous.

“The U.S. wastes $400 billion each year treating unnecessary medical complications that could have been avoided with better adherence to medications, with approximately 50 percent of patients not taking their medications as prescribed.”

It has been proven that high copays and out-of-pocket cost increases can greatly reduce a patient’s adherence. Whether they are leaving treatments at the pickup counter of a pharmacy or reducing their dosage to stretch a prescription, they are endangering their health. Geisinger Health Systems published a study in which they were able to see an improvement in adherence and cost savings by eliminating copays on certain types of drugs.

“Historically, value-based care insurance design for prescription drugs has produced improved medical adherence and certain health-related outcomes, but no obvious cost savings. However, the Geisinger study shows a zero co-pay drug program for a chronically ill employee population was associated with positive cost savings and a return on investment of 1.8 over five years.”

The program focused on medications for chronic conditions like high blood pressure, cholesterol and diabetes. These are treatments that manage a condition that if left unmanaged could have very serious health consequences, all preventable. These conditions were considered high value in management and prevention and by targeting them the program saved. This is value based insurance design that is highly optimized so outcomes can be improved while reducing costs. Dr. Maeng the author of the study explained:

“If we could offer employees the help they needed to take their prescribed medication, i.e., provide it at no charge, and, therefore, avoid being re-admitted to the hospital, we could reduce our overall cost of healthcare and have healthier employees.”

The benefits of spending on programs that could increase medication adherence are obvious. Medication adherence is a complicated issue and eliminating copays are not the only answer. The causes of non-adherence can be numerous and more complicated, or as simple as not being able to read directions. Companies are becoming more creative and invested in improving preventative medicine. In the value-based marketplace, healthier is cheaper, and that makes everyone happier.