Cost-Shifting and Medication Adherence

Great Article by our friend Dr. David Nash in MedPage Today.

Cost-Shifting and Medication Adherence

By David B. Nash, M.D., M.B.A., F.A.C.P.; Brian Leas,, MS, MA | June 16, 2008

A broad array of new medications have become available over the past decade to help patients control elevated cholesterol, hypertension, diabetes, depression, and a host of other serious chronic conditions. These drugs have expanded the available tools in the physician's arsenal and are key ingredients in maintaining the health of millions of people worldwide.
But no medication -- whether an old standby or a new blockbuster -- will work unless patients fill their prescriptions and take the right dose at the right time.

In reality, prescriptions often go unfilled and pills are not taken on schedule. Studies consistently show that 25% to 40% of medications are not taken as prescribed.

Among the factors that contribute to poor medication adherence are the impact of side effects, the challenge of managing a complex regimen of multiple medications, and simple forgetfulness.

One factor that warrants special attention in the current healthcare environment is the patient's out-of-pocket cost for prescription drugs. Today, nearly all insured patients face co-pays or co-insurance, and those who don't have insurance foot the entire retail price.

Not surprisingly, research shows that medication costs influence patient behavior.

The landmark RAND Health Insurance Experiment, conducted more than 20 years ago, demonstrated that increasing a patient's share of medical costs leads to a reduction in the use of services, including prescription drugs.

Subsequent studies confirmed the connection between the level of cost incurred by patients and their likelihood to adhere fully to a medication regimen.

Patients faced with high medication costs may decide to take smaller doses, or to take doses less frequently so that they can extend the time between refills.

Those who need multiple medications -- half of all Americans over age 60 take at least 3 medicines every day, and 10% take at least 7 -- may be faced with choosing which drugs they can afford to take and which prescriptions to leave unfilled.

Some patients may alternate pills from day to day to make each prescription last longer; others will opt to take a medication only when they experience symptoms.

These cost-saving strategies are ineffective at best and represent dangerous behavior for many diseases.

Poor medication adherence has broad health and economic consequences. Patients who don't take their medications as prescribed are more likely to experience poor health and increased risk of comorbidities.

On a population level, improper management of chronic disease can result in greater direct healthcare costs arising from preventable hospitalizations or visits to the emergency department.

Researchers have found that improving medication adherence can cut medical costs in half for patients with diabetes and high cholesterol. Likewise, children with asthma are far less likely to need emergency care or be hospitalized when they use medications appropriately.

Finally, poorly controlled chronic conditions are associated with lost productivity and other indirect economic costs.

Although the twin issues of medication adherence and prescription drug costs have been a subject of research and policy debates for a long time, there is now a heightened sense of significance as employers and insurers seek to use cost-shifting as an important tool for managing their spiraling health care costs.

Rising co-pays, restrictive formularies, and the expansion of high-deductible health plans all serve to increase the financial burden on patients. It will be important to understand the impact of these strategies on patient utilization of necessary medications.

Several recent initiatives have sought to improve medication adherence by tempering the financial barrier of medications. The city of Asheville, N.C., often cited as a model in this area, reduced or eliminated co-pays for city employees diagnosed with certain chronic diseases. Pitney-Bowes has emerged as a leader in the corporate world for a similar type of program.

The researchers monitoring these programs have concluded that reducing the costs of key drugs for selected conditions (along with educational and medication management programs) has resulted in improved medication adherence and lowered overall healthcare costs.

As the retail pharmacy market continues to experiment with highly discounted generic drugs, and as Medicare begins to reflect on the early impact of Part D coverage, it will be important to conduct an ongoing assessment of the real impact of direct drug costs on patient adherence.

The debate over shifting costs to patients remains to be settled.

Want More on Health Policy?

Read David Nash's blog at http://departmentofhealthpolicy.blogspot.com.