New Study Shows Lowering Co-payments Can Lead to Lower Total Healthcare Costs, Improved Overall Health

Tuesday, May 13, 2008 General News
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PHILADELPHIA, May 12 High prescription drugco-payments are associated with lower medication adherence and higher totalhealthcare costs, according to a new study published this month in the Journalof Occupational and Environmental Medicine. The study, funded byGlaxoSmithKline (NYSE: GSK), investigated the effects of varied co-paymentlevels on oral diabetes medication adherence, health resource utilization, andtotal health costs for PPG Industries employees, retirees, and dependents.

In comparing medication adherence and healthcare costs for patients withdiabetes, PPG Industries, a global manufacturer and provider of coatings,glass and chemical products, noted that those with lower co-payments hadbetter adherence to oral diabetes medicines, and averaged $3116 less per yearin total health care costs than those in the highest co-payment group.

Poor medication adherence can be attributed to several factors.[1,2] Theeffects of high prescription drug co-payments have been studied extensivelysince they have often been used by employers and insurers in an attempt tocontain spiraling drug costs for chronic diseases, such as diabetes, and toprevent individuals from seeking unnecessary medical care.[3] Increasingco-payments has been shown to decrease use of medications for chronicconditions.[4-6] Until recently, few studies have investigated therelationship between co-payment level, adherence, and use of subsequent healthresources.

The Effects of Health Plan Co-payments on Adherence to Oral DiabetesMedication and Health Resources Utilization was a 2-year retrospective study.In it, PPG Industries analyzed the eligibility, medical, and pharmacy claimsdata from 2052 employees, retirees, and dependents with type 2 diabetes todetermine the impact of different co-payment levels.

Using data from 2003-2005, individuals were grouped according to theiraverage monthly prescription co-payments: low ($0-9), medium ($10-19), or high($20+). Within these groups, individuals were then further divided by age.This stratification [under 65 years (n=908) and those 65 years or older(n=1144)] was necessary because for those individuals over 65, healthcarecoverage is provided in part by Medicare, therefore complete cost data werenot available.

The study was co-authored by Alberto M. Colombi, MD, (PPG Industries);Kristina Yu-Isenberg, PhD and Julie Priest, MSPH (GSK).

The current study complements the results of earlier studies from GSK'sHealth Management Innovations team which indicate that increasing prescriptionco-payments results in decreased medication adherence. These studies, read inthe context of the body of literature on medication adherence, suggest thatvalue-based benefit design can lead to better adherence -- and better outcomesfor both patients and employers.

"We have seen in earlier studies how increasing co-payments negativelyaffects patient medication adherence. With this study, we've shown that highco-payment levels and low adherence increase the use of other healthresources, leading to higher overall health costs," said Michael C. Sokol, MD,MS, medical director for GSK's Health Management Innovations team. "Our goalmust be to develop health benefit strategies that improve the health ofpatients -- which can lead to lower total healthcare costs."

Investing in Health Instead of Paying for Sickness

Today's greatest healthcare threats are chronic conditions which requireongoing, patient-centered management. In fact, $3 of every $4 spent onhealthcare in the US[7] goes to treating the 45% of Americans with at leastone chronic disease.[8] As well, according to the Milken Institute, the sevenmost common chronic diseases cost the US economy $1 trillion each year --including both direct and indirect costs. That figure is expected to reach $6trillion each year by the middle of the century if unchecked.[9]

While e

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