Benefits Business

Agents as health counselors

Use of CDHPs requires agents to work closely with employers and plan providers

By Len Strazewski

Consumer-directed health plans (CDHPs) may be exciting new plan designs for managing and sometimes reducing employer health plans costs, but they aren’t without pitfalls. Critics say that by giving employees control over thousands of dollars in health spending, the plans may discourage timely and appropriate health care, leaving the participants vulnerable to medical complications and bigger bills in the future.

Unless agents and brokers educate their clients about what can go wrong as well as what should go right when making a transition, they could be leading them into a strategy that goes directly against the employer’s long-term plan to control costs and mold a healthier workforce.

The critics may be right—at least regarding the way employees manage their prescription drug purchases and treatment adherence. According to a new study by Medco Health Solutions, Inc., in Franklin Lakes, New Jersey, patients enrolled in CDHPs have significantly lower adherence to medication treatment programs than those enrolled in traditional health plans—and the adherence drops off noticeably when participants move from traditional plans to CDHPs.

The analysis, presented in June at Academy Health’s annual research meeting in Washington, D.C., shows that adherence rates for patients being treated for hypertension (high blood pressure) high cholesterol and diabetes declined by as much as 9% when patients switched from a traditional health plan.

The study reviewed pharmacy claims from more than 14,000 participants who opted for a CDHP in 2006 after being in a health plan with ordinary deductibles in 2005, and tracked whether or not the participants adhered to the prescribed duration of therapy and the rate of compliance to a therapy regimen prescribed by a physician.

Compliance or beginning therapy rates dropped 5% for individuals with hypertension and diabetes and 9% for hyperlipidity (high cholesterol and triglycerides), and persistency or maintaining the duration of therapy dropped 11% for hypertension and hyperlipidity and 8% for diabetes.

Why the significant drops? CDHPs do a great job of educating participants about the cost of health care and the need for educated choices, but not every participant makes a great choice—particularly involving conditions that have no overt symptoms such as high blood pressure or high cholesterol, notes Tracy Grunsfeld, vice president of consumer solutions at Medco.

She notes: “This study provides further evidence that placing greater responsibility and costs on consumers requires an increased level of support and education to ensure patients remain adherent with their medication therapy.

“While it is certainly prudent to evaluate cost when it comes to prescription drug options, patients should never cut corners by not taking their medications since non-compliance can result in long-term health complications and higher medical costs,” Grunsfeld says. “It’s incumbent upon benefit sponsors and administrators to promote cost-conscious choices that will not negatively impact patient health,” she says.

Medication for treatment of chronic diseases is a huge health concern—possibly the most significant issue for prescription drug benefits. An earlier Medco study, released in May, revealed that in 2007, 51% of insured Americans were taking prescription drugs to treat at least one chronic health problem.

Many of the patients are on multiple drugs; the study indicated that one-fifth of insured Americans took three or more drugs for chronic conditions.

“It appears that we have now reached the tipping point where treating chronic diseases and conditions is more common than not,” says Dr. Robert Epstein, Medco chief medical officer. “This data does present a pretty unhealthy picture of America.”

While adherence to treatment can head off complications and more serious health problems, he notes, the overall picture isn’t getting better. Seniors are the largest group of chronic condition patients but younger patients are catching up, being treated for high cholesterol, hypertension and diseases related to obesity.

“There’s no doubt that rising rates of obesity are having a major impact on our health. These chronic conditions are incredibly costly for the nation and will become exponentially so if we are seeing these problems show up at a younger and younger age,” he says.

What can agents and brokers do to head off these poor treatment decisions? The experts say CDHPs and the pharmacy benefits that are tied to the plans can be modified to encourage rather than discourage appropriate prescription drug utilization. Employee benefits agencies can also recommend disease management programs to help employees build the awareness of potential complications resulting from skipping treatment.

Carl Mowery, an employee benefits consultant and managing director of Smart Business Consulting and Advisory LLC in Chicago, says employers are already modifying pharmacy benefit plans to encourage individuals with chronic diseases to adhere to their treatment plans and make better use of the generic substitutes for more expensive brand name drugs.

Most prescription drug plans are now organized into three or four “tiers” of co-pay with the greatest benefit or the lowest co-pay for generic drugs; higher co-pay for preferred brand name drugs that offer discounts or rebates that can be paid back to employers; and non-preferred, usually newer and more expensive brand name drugs.

While some plans are increasing co-pays for the highest tier—non-preferred brand name drugs—to discourage their choice, many employer plans are reducing or eliminating co-pays for generic treatments for chronic diseases, recognizing that successful early treatment will reduce complications and more expensive treatments in the future, Mowery says. These changes are part of an overall plan to encourage and incent use of generics, which are available at a fraction of the overall cost of most brand name drugs.

“Many previously brand name drugs are scheduled to become available as generic in the next few years, which should reduce the costs for employers and give patients more lower-cost options for treating their chronic conditions and reducing long-term complications,” he says.

“More employers are also incorporating medical management of chronic diseases into the pharmacy benefits,” he says, using health coaches and toll-free telephone or Web-based information services to help patients understand and manage their conditions. These services may also include refill reminder or automatic refill services that help patients adhere to their treatment plans.

Medco’s Grunsfeld says employers can also build other kinds of incentives into their CDHPs, including no co-pays for preventive health care that can focus on identifying chronic conditions and beginning treatment earlier—getting patients started on the right path to health management.

“Preventive services have become a staple of CDHPs and can be extended into pharmacy benefit plan design to encourage adherence. Prevention is also the key to future return on investment in its ability to reduce long-term health care costs.”

Agents and brokers who are commending CDHPs should also look carefully at the choice of CDHP plan design and each employer’s health management and wellness goals. Some plan designs are more customizable than others, Grunsfeld says.

“Employers have more flexibility with Health Reimbursement Accounts (HRAs) than Health Savings Accounts (HSAs) and can build into their plan designs economic incentives for adherence to treatment including prescription medication,” she says. *

The author
Len Strazewski has been covering employee benefits issues for more than 20 years and is employee benefits editor of Human Resource Executive magazine. He has an M.A. in Industrial Relations from Loyola University.