HMO PPO Rx Digest Slides

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These slides were available for download on the web at http://www.managedcaredigest.com/DownloadDigests.aspx. I saved them down to post them here.

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  • After peaking at 104.6 million in 1999, HMO enrollment has since dropped a substantial 27.9%, to 75.3 million in 2009. However, HMO enrollment declines have slowed in recent years and even reversed in 2007, in part due to the explosion of Medicare Advantage (MA) plans.
  • Since 2003 (13.5 million), Medicaid HMO enrollment has grown by nearly 6 million members, to 19.2 million. Yet the bulk (66.7%) of this growth has occurred over the last three years. While not exclusively the result of the economic downturn, this sharp growth in Medicaid HMO enrollment has coincided with rising unemployment rates.
  • Three of five HMO owner types reported increases in the average numbers of employer groups between 2008 and 2009. Such growth was greatest among independently owned HMOs, to 1,754 from 1,192 the previous year, an increase of 47.1%.
  • Growing numbers of Medicare risk and Medicaid HMO members further eroded the percentage of standard HMO enrollees, to just 33.3% in 2009 from 37.7% in 2008. Between 2008 and 2009, standard HMOs shed nearly 4 million members, to 25.1 million from 29.1 million. Enrollment growth among Medicaid HMOs (up 3.2 million) and Medicare risk HMOs (up over 600,000) helped negate enrollment losses for standard HMO models during this period.
  • Overall, average length of stay bumped up to 4.5 in 2009 from 4.4 days in 2008. However, average length of stay per hospital admission remained constant between 2008 and 2009 for Medicare, non-Medicare and Medicaid HMO members alike.
  • As expected, HMO premium rates inflated for families, individuals and individuals with covered spouses between 2008 and 2009. HMO members paying family premiums experienced an 11.1% hike in average monthly premiums between 2008 ($900.64) and 2009 ($1,000.65). Average individual premiums grew at a similar rate (11.9%) over this time frame.
  • The average numbers of PCP and specialist contracts per plan were greater for PPOs than for HMOs in 2009. In 2009, PPOs held an average of 8,231 contracts with specialists (up from 6,962 in 2008), compared with 5,606 such contracts between specialists and HMOs. PCPs were contracted less frequently than specialists at both types of plans: PPOs averaged 3,805 PCP contracts per plan in 2009, while HMOs held a mean of 2,487 PCP contracts.
  • After increasing steadily between 2005 and 2008, average length of stay per hospital admission slid downward in 2009 for members of HMOs (to 4.2 days from 4.4) and for members of medical/surgical PPOs (to 4.0 days from 4.2) alike.
  • Between 2008 and 2009, the proportion of prescriptions dispensed to HMO members in three-tier copayment designs crept downward, to 44.7% from 45.4%. This slightly reduced share—although still the largest among the five copay tier designs—precipitated fractional growth in the shares of prescriptions given to members in each of the other four arrangements.
  • The average ingredient cost per prescription, which has experienced positive growth in every year since 2000, climbed 8.7% between 2008 ($49.72) and 2009 ($54.04). This sharp increase, the most rapid since 2002, far outpaced the meager 1.7% rise in average ingredient cost between 2007 and 2008.
  • Mail-service pharmacies are able to provide convenient and cost-effective dispensing of maintenance medications to patients because of their centralized administration. In 2009, a substantial 93.1% of long-established HMO plans—those 15 years of age and older—used mail-service pharmacies, by far the highest percentage by age of plan.
  • Of HMO members subject to a three-tier copayment design, 25.3% were on a closed formulary in 2009, up from 18.6% in 2008. The overwhelming majority of HMO members subject to one-tier (66.8%) and two-tier (71.3%) copayment designs were under a closed formulary arrangement.
  • Since 2002, when generics accounted for a modest 44.7% of prescriptions filled by members of HMOs, generic drug use has crept up fractionally each year. The generic share of prescriptions finally overtook that of brand name drugs in 2007, when 51.4% of all prescriptions were filled with generics. Between 2008 and 2009, the portion of all prescriptions filled with generics jumped to 57.0% from 52.4%.
  • Average HMO expenditures per member per year (PMPY) for drugs increased 20.8% between 2007 ($431.15) and 2009 ($520.99). Such growth was even more notable among for-profit HMOs, which reported a substantial 23.9% rise in PMPY drug expenditures during this two-year period.
  • For the first time in this Digest, the share of prescriptions filled with brand name drugs was lower for PPOs (42.3%) than for HMOs (43.0%). With their more loosely affiliated networks, PPOs historically had less restrictive controls of prescribing practices than their HMO counterparts.
  • Across all 12 drug classes shown, third-party payer shares declined between midyear 2009 and midyear 2010. The share of prescriptions covered by third parties declined most notably for antiplatelets (down 2.5 percentage points), cholesterol and diabetes drugs (down 2.7 percentage points each), and osteoporotics (down 3.7 percentage points).
  • Of three classes of retail prescriptions listed that treated cardiovascular disease (antiplatelets, cholesterol-reducers and antihypertensives), cholesterol-reducers and antihypertensives had relatively high utilization rates at midyear 2010. At midyear 2010, 2,479.3 retail antihypertensive prescriptions were dispensed per 1,000 patients, by far the highest rate among the 12 drug classes shown. Cholesterol-reducers were third most prescribed, at 912.5 retail prescriptions per 1,000 patients. However, retail antiplatelet prescriptions were dispensed at a much lower rate at midyear 2010. Only 238.9 such prescriptions were dispensed per 1,000 patients.
  • Out-of-pocket costs per antiplatelet prescription were $28.38 at midyear 2010, third highest among the 12 common drug classes shown. Such costs increased notably for prescriptions covered by third-party payers (to $28.06 from $24.66) and Medicare Part D (to $26.55 from $20.88) between midyear 2008 and midyear 2010.
  • The generic prescription fill rate for Medicare Part D topped that of third-party payers in nine of 12 drug classes profiled.

Transcript

  • 1.  
  • 2. HMO INDUSTRY OVERVIEW * Operating plans only. HMOs not licensed by state agencies are excluded from all totals. ** Enrollment data include HMO members in Puerto Rico and other U.S. territories. Data source: SDI © 2010
  • 3. Data source: SDI © 2010 HMO GOVERNMENT PAYERS
  • 4. EMPLOYER GROUPS Data source: SDI © 2010
  • 5. HMO PAYER COMPARISONS Data source: SDI © 2010
  • 6. * All HMO utilization data exclude well baby, neonatal ICU and psychiatric patients. MEDICAL UTILIZATION Data source: SDI © 2010
  • 7. HMO PREMIUM RATES Data source: SDI © 2010
  • 8. * “Primary care physicians” includes family practitioners, internists, OB/GYNs and pediatricians. ** The numbers in this column do not always equal the sums of the numbers of primary care physicians and medical/surgical specialists because of averaging. PPO PROVIDER CONTRACTS Data source: SDI © 2010
  • 9. PPO UTILIZATION Data source: SDI © 2010
  • 10. PHARMACY BENEFIT STRUCTURE p. 39 (c) * Copayments can be a flat dollar amount or a percent copay (coinsurance), which requires the HMO member to pay a fixed percentage of the cost of the drug. For multitier systems, the percentages of prescriptions reveal the overall share dispensed by the system, not the percentages for an individual tier within a system. Data source: SDI © 2010
  • 11. PHARMACY UTILIZATION p. 45(c) * Does not include administrative, prescription or dispensing fees. Data source: SDI © 2010
  • 12. PHARMACY PROVIDERS Data source: SDI © 2010
  • 13. FORMULARIES 1 Copayments can be a flat dollar amount or a percent copay (coinsurance), which requires the HMO member to pay a fixed percentage of the cost of the drug. 2 In an open formulary, a drug is usually covered by the HMO, even if it is not listed on formulary. 3 In a closed formulary, a drug not on formulary is generally not covered, unless it goes through a prior authorization process. 4 The percentages represent the share of all HMO members subject to an open formulary, by copay tier system. 5 The percentages represent the share of all HMO members subject to a closed formulary, by copay tier system. Data source: SDI © 2010
  • 14. GENERIC SUBSTITUTION Data source: SDI © 2010
  • 15. DRUG EXPENDITURES/PURCHASING Data source: SDI © 2010
  • 16. PPO PHARMACY UTILIZATION Data source: SDI © 2010
  • 17. RETAIL DRUG OVERVIEW * Data are as of midyear 2010, and represent the numbers/percentages of prescriptions dispensed, by drug class, to all patients. Data source: SDI © 2010
  • 18. RETAIL DRUG UTILIZATION/SPENDING * Data are as of midyear 2010, and represent the percentages of prescriptions dispensed, by drug class, to all patients. ** The total full price the pharmacy charges the patient for the product, regardless of copayment situation. Data source: SDI © 2010
  • 19. OUT-OF-POCKET COSTS PER RETAIL RX * Data are as of midyear 2010, and represent the percentages of prescriptions dispensed, by drug class, to all patients. NOTE: “Out-of-pocket cost” is the actual amount paid by the patient for the individual prescription. This cost mainly includes copayments, but can also include tax, deductibles and cost differentials where applicable Data source: SDI © 2010
  • 20. * Data are as of midyear 2010, and represent the numbers/percentages of prescriptions dispensed, by drug class, to all patients. THIRD-PARTY RETAIL DRUG UTILIZATION Data source: SDI © 2010