Cost-Saving Strategies: When Employees Fill Prescriptions
Last year a Harvard Business Review podcast opened by asking, “What if your doctor told you that you had a chronic disease that could debilitate or even kill you, but that it was 100 percent treatable if you took prescribed medication, indefinitely. Would you take it? Would you keep taking it? If you're like 50 percent of people in the United States who are in that very situation, the answer is, ‘no.’”
As The New York Times had already noted, “There is an out-of-control epidemic in the United States that costs more and affects more people than any disease Americans currently worry about. It’s called nonadherence to prescribed medication . . . The numbers are staggering” [emphasis added].
This New York Times article quoted a review in Annals of Internal Medicine that stated “studies have consistently shown” that 20% to 30% of prescriptions go unfilled and an estimated 50% of prescriptions, including those for chronic illnesses, are not taken as prescribed.
The Opportunity for Self-Funded Employers
The U.S. suffers from a growing epidemic of chronic care illnesses, and it’s hit the workforce. A 2017 RAND study found that over 30% of working-age adults suffer from two or more chronic conditions (50% of adults 45-64, and 18% age 18-44).
While estimates vary widely, nonadherence can lead to entirely avoidable costs of several thousand dollars per nonadherent employee when he or she is hospitalized, needs expensive therapies as a disease progresses, or requires emergency care. As discussed in a 2017 AON Hewitt whitepaper, nonadherence also leads to substantial employer productivity costs due to absenteeism and presenteeism by sick nonadherent employees.
For employers, these unhealthy behaviors also create an opportunity for smart policies that minimize avoidable costs. For example, research published in 2016 in the The American Journal of Managed Care, examined eliminating copays for approximately 200 generic chronic illness drugs over a five-year period, combined with counseling and financial incentives. The study concluded these measures reduced the total healthcare costs (all treatment plus medication) for enrolled employees by an average of $144 per member per month: A net savings of about $1,700 per year per employee.
Causes of Medication Non-adherence
For insured employees, it’s now well documented that higher-cost deductibles, copays, and cost-sharing arrangements lead to reduced adherence among chronic-care patients. This effect is not limited to low earners. When copays for generic drugs are eliminated, adherence increases among highly paid employees as well.
Medication non-adherence also reflects a complex set of additional factors unique to each employee. They include the absence of immediate symptoms (which leads patients to ignore or misunderstand the long-term consequences of nonadherence), fear of side effects, patients’ simply forgetting, the complications of maintaining a daily regimen, psychological resistance to taking medication indefinitely, and the difficulty of refilling medications consistently.
Abandoning the "Limited Care" Mindset
To successfully address medication adherence, employers must adopt a new framework for thinking about healthcare costs.
Traditional healthcare plans control costs, in part, by serving as gatekeepers that limit care. For example, copays are intended to prevent the overconsumption of healthcare. However, the problem of medication adherence derives not from overconsumption, but from the reverse: underconsumption of the lowest-cost, necessary treatment option.
Smart Tactics to Engage Employees
While there is no one-size-fits-all solution, studies consistently suggest that employers evaluate three high-potential initiatives:
1.) Patients Trust Pharmacists
Consider an independent, HIPAA-compliant on-site pharmacy. While physicians spend less than a minute discussing prescriptions with patients, trusted pharmacists build relationships with patients to manage chronic illnesses. For employees, convenient on-site access to prescriptions, provided with no copays or at-cost, also drive increased adherence.
In one on-site pharmacy case study, Premise Health reported annual healthcare savings by illness, of $2,994 for diabetes and $1,352 for hypertension, for each employee participating in a pharmacist-led program.
2.) Copays Can be Counterproductive
Assess eliminating copays for generic drugs that treat chronic conditions such as hypertension, high cholesterol, and diabetes. And consider making no-copays part of a privacy-protected program that offers ongoing patient counseling or other support services. The combined effect of no-cost medication and frequent intervention can increase adherence, significantly reduce overall treatment costs, and create a healthier, more productive workforce.
3.) Engage Separately with High-Cost Employees
Investigate employing a HIPAA-compliant chronic care management firm to identify and aid your high-cost employees. In a 2018 publication, Mercer and the American Benefits Council describe a Fortune 50 retail organization which concluded diabetes was a “major cost driver.” Subsequently, a program, offered by a chronic condition specialty firm, increased employee medication adherence and cut rapidly escalating diabetes costs per claimant.
Yes, Employers Can Succeed
Skeptics doubt that employers can, in fact, significantly affect longstanding behaviors. At First Stop Health, we know employers can.
Today most insurers offer telemedicine embedded in their health plans, with a copay, and achieve an average utilization of 1%. In contrast, the average utilization of First Stop Health’s direct-sold employee telemedicine benefit is 52%. By combining a no-copay service; ongoing, engaging member education; and a focus on ease of use (eliminating any roadblocks that interfere with patients accessing our service), First Stop Health changes the behavior of employees.
Similarly, employer initiatives that engage the workforce, and eliminate barriers to filling and refilling prescriptions, can create new employee habits and increase adherence.