Study finds eliminating drug co-payments leads to cost savings among chronically ill

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. However, waste can be reduced and return on investment achieved by eliminating the co-payment on prescriptions for the chronically ill, according to a study from Danville, Pa.-based Geisinger Health System.

The study was published in the February 2016 issue of The American Journal of Managed Care.

"Recent studies suggest that even low, out-of-pocket costs can be a significant source of patient nonadherence with drug therapies that effectively prevent exacerbations and thus, there's an increase in the utilization of high-cost care," explained Daniel D. Maeng, PhD, the lead author of the study. "Geisinger's experience with its value-based insurance design — which effectively makes some of these medications free to targeted, high-risk populations — demonstrates that it not only improves quality of care but also creates cost savings."

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 cost savings of the VBID can be attributed to the fact that the program was designed to change patient behavior within the context of a comprehensive wellness program called MyHealth Rewards. The intervention group, defined as 2,251 Geisinger employees participating in the wellness program, was also enrolled in the Geisinger Health Plan.

More than 200 prescription medications were selected to be eligible for the $0 co-pay program. Those selected were designated for chronic conditions such as high blood pressure, cholesterol and diabetes management and were preventative in nature. Geisinger researchers say that VBID implementation within the context of a wider employee wellness program targeting the appropriate population can potentially lead to further positive cost savings. 

"Theoretically, investing in high-value benefits would be more than offset by the avoidance of more expensive medical events," said Dr. Maeng. "In other words, 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."

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