*The study was executed using data from the Truven Health MarketScan® Commercial Claims and Encounters Research Databases, which consists of medical and drug data from employers and health plans. It contains data for more than 59.9 million individuals annually, encompassing employees, their spouses, and dependents who are covered by employer-sponsored private health insurance.
The PBMs assert the exclusion of products from the formulary has had a positive impact for plan sponsors:
However, plan sponsors must also consider the impact of excluding therapies on a member’s medication adherence and overall health outcomes. When a claim is rejected at the pharmacy because the drug is excluded from the formulary, the member must pay out-of-pocket or ask their physician to prescribe an alternate medication. The increased cost or additional effort can be a barrier for members and may cause them to abandon the prescription, which can compromise their health and lead to costly complications.
Member out-of-pocket costs are also negatively impacted when a PBM chooses to reduce therapy options to one brand product in a class. For 2015, the two largest PBMs have limited the formulary option for diabetic test strips to one brand product line. Although plan sponsors will see an increase in rebates, members enrolled in a Consumer Driven or High Deductible Health Plan will likely face higher out-of-pocket costs at the pharmacy to comply with the formulary.
The member may choose to go outside of the benefit to purchase lower-cost supplies; however, the costs won’t count toward meeting deductibles or out-of-pocket maximums. Further, utilization data for the claims will be lost because the claims will be rejected at the point of sale. Thus, any medication adherence or disease management program reporting you produce will be understated, making it seem like members are non-compliant when they are making choices based on paying a lower cost.
To ensure you fully understand the impact of any formulary changes made by your PBM, consider:
Consumer-Driven Health Plans (CDHPs) are one of the fastest growing benefit options offered to employees – and soon may become the dominant plan type. In fact, a recent Kaiser/HRET survey found that CDHP enrollment has gone from just 4 percent of all employees who were given that option in 2006 to 20 percent in 2013.
In order to ensure CDHP members can effectively engage in their healthcare, employers must provide participants with timely access to consumer information tools to help them understand the range and cost of treatments available through plan providers and also information about provider quality. In the absence of this kind of help, CDHP participants are faced with a daunting task to make effective care decisions.
In addition to employees becoming more educated about their own healthcare, the companies they work for are offering new options that provide incentives and potential savings for the enrollees, as well as the employer itself. As part of a recent survey of Truven Health MarketScan™ data contributors, 64 percent of companies stated that they currently offer one or more CDHP options, and 76 percent stated that they will offer one or more in the future. The majority of these options consist of CDHP or high-deductible health plan (HDHP) with a health savings account (HSA) feature.
This type of growth is leading to a new paradigm in which more patients are taking on a greater role in treatment decision-making. For instance, under a traditional PPO plan in the past, it was very likely that a breast cancer diagnosis would result in a set course of action. However under a well constructed CDHP, the patient can make assessments based on the price she is willing or able to pay, the quality of treatment and providers, and even the best locations to receive the necessary treatment. With the help of her doctors and advisors, she can decide what’s best for her. She is engaged in her own plan for her health and treatment.
As this substantial shift continues, employers have the ability to empower their employees by providing the opportunity for them to be engaged in their own healthcare decisions, leading to cost-savings for the employee — and the organization.
To learn more about achieving year-round engagement with your employees, please access this complimentary insights brief from Truven Health Analytics.
Senior Director of Practice Leadership