Reform Update: Drug adherence may improve with incentives, but spending reduction might not offset cost

Eliminating or lowering drug co-pays may improve patients' adherence to their medication regimens, but the reduction in overall health spending may not be enough to offset the cost.

That was the experience of one insurer in a study published Monday in the policy journal Health Affairs.

Health insurers and policymakers, including those that drafted the Patient Protection and Affordable Care Act, are experimenting with the use of financial incentives to encourage consumers to use cost-effective treatments without creating barriers to preventive care or treatment to manage costly, chronic diseases. The strategy, known as value-based insurance design, was included the 2010 health reform law, which eliminates the cost of some preventive care to consumers.

The new study in Health Affairs suggests that consumers do respond when health plans drop or reduce the cost of care. Blue Cross and Blue Shield of North Carolina paid an additional $6.4 million during a two-year period to cover the cost of higher drug use for patients with hypertension, diabetes, hyperlipidemia and congestive heart failure after the insurer lowered drug co-pays. That amounts to $139 to $173 annually for each member.

But the $5.7 million drop in the cost of all other care did not offset the expense.

“This study and prior ones suggest an increase in quality of care through greater adherence to medications, particularly for previously under-adherent patients,” wrote authors Matthew Maciejewski and Jennifer Lindquist of the Veterans Affairs Department, Daryl Wansink and John Parker of Blue Cross and Blue Shield of North Carolina, and Joel Farley of the University of North Carolina Chapel Hill.

“Although the quality of care improved, this study did not find that the associated expenditures were fully recovered within the time frame of our observation,” they said.

Health plans increasingly separate prescription coverage into tiers, with generic drugs and lower co-payments in one tier and another tier for more costly, brand-name drugs with higher co-payments.

In 2008, the North Carolina Blues reduced the cost of brand-name drugs by one tier for the conditions the researchers studied and offered generic medication for no cost to consumers.

Drug adherence increased by 2.7%-3.4% in 2008 and 2009 compared with 2007.

Hospital visits fell slightly, but researchers found no change in emergency room visits.

It was those with hypertension and coronary artery diseases—1 out of 3 also had diabetes—that saw the biggest drop in hospital visits and costs, the study said.

Benefits from better management of chronic diseases such as hypertension though consistent use of prescriptions likely won't be apparent in one or two years, Maciejewski said. “It's not entirely surprising that we don't see an immediate significant reduction” in expenses, he said. Over many years, however, patients that closely follow doctors' orders may avoid acute, costly illness. “It is in the realm of possibility.” But the evidence is not yet there. “It's an open question really.”

Also lacking are studies that analyze the relationship between value-based insurance design and clinical outcomes such as blood pressure and blood sugar, he said. “Improving medication adherence should be moving those in some degree and it's through those changes that we would expect to see lower healthcare expenditures.” More widespread use of electronic health records should make such research possible.

—Melanie Evans

The CMS Innovation Center is testing several concepts that, according to theory, will improve the quality of healthcare delivery while lowering its costs, but some researchers are now criticizing the scientific rigor of these tests.

These critics are taking the agency to task for not funding more randomized control trials. Gordon Berlin, president of MDRC, a New York-based social policy research organization, told the New York Times that it “speaks volumes about the path not taken.”

The Center spends some $3.7 billion a year on research testing accountable care models, bundled payments, initiatives designed to speed adoption of best practices and ways to transform primary care.

The New York Times article noted that “such rigorous studies in healthcare have been rare.” Indeed, similar criticisms have been leveled at research examining the patient-centered medical home practice model. Critics have noted that most glowing research findings for medical homes are basically before-and-after studies and that without a control group, any practice improvements cannot be definitively linked to an intervention.

Some have noted, too, that studies of patient-centered medical homes that do use a control have shown only modest improvements.

Last week, the CMS announced that 232 acute-care hospitals, skilled-nursing facilities, physician group practices, long-term acute-care hospitals and home health agencies have entered into agreements in the Innovation Center's Bundled Payments for Care Improvement initiative. Participants told Modern Healthcare reporter Jessica Zigmond that they're seeing encouraging results.

The Center's director, Dr. Patrick Conway, said in the Times story that the agency will use “randomized designs when we can and when it's appropriate,” but added that patients in control groups are not beneficiaries of an innovation and tend to drop out of the trials.

–Andis Robeznieks

Follow Melanie Evans on Twitter: @MHmevans

Follow Andis Robeznieks on Twitter: @MHARobeznieks