Approaches to Helping the Under-Insured September 2008
Agenda Sharing Perspectives on Helping the Under-Insured:
A Co-Pay Assistance Non-Profit
An Insurance Company
A Patient’s Perspective Page 3 Judy Hodges Breast Cancer Patient
A Patient’s Perspective Page 4 “I sat in the oncologist’s office and kept saying, I don’t have the money , but I’m not going to die because I can’t pay for this. I am not going to die because I am underinsured.” Judy Hodges, PAN Patient
A Non-Profit Perspective Page 5 Julie Reynes President Patient Access Network Foundation
Why Co-Payment Assistance? Pharmacy cost trends upward exceeded all other components of medical care from 2007 - 2008. Source: 2008 Milliman Medical Index Page 6
Why Co-Payment Assistance?
Prescription drugs have the largest co-payments
Prescription drug costs are estimated to continue increasing in the near term
Physicians and hospitals have the flexibility to reduce or waive their fees for lower income patients
If a patient can obtain the thousands of dollars it may cost to access their medications, they will be more likely to get treatment
‘We found that reductions in drug copayments increased medical adherence.’ Michael E. Chernew, Health Affairs, Jan-Feb 2008 Source: 2008 Milliman Medical Index Page 7
Patient Access Network
A 501(c)(3) public charity that launched our initial assistance program in October, 2004.
Currently supports 20 disease-state funds for oncology and chronic diseases.
Provides co-pay assistance of from $1500 - $7500 per year for medications.
Received favorable advisory opinion from the Office of the Inspector General (OIG) of the Department of Health and Human Services in December 2007.
Have approved nearly 50,000 patients for cost-sharing assistance.
Dedicated to improving access to needed health services for insured patients who cannot afford the out-of-pocket costs associated with their treatment. Page 8
The Need for Co-pay Assistance from PAN is Increasing Projected 2008 Demand is increasing by over 30% each year, while revenues remain stable Source: Patient Access Network Data, 2004 - 2007 Page 9
An Insurance Company’sPerspective Page 10 Gary Owens Physician and Consultant Providing the Insurance Company’s Perspective
Biotech Drugs as a Growth Area Biotech Drugs in Development Source: BCBSA Medical Cost Trend Report 2007
Biotech Drugs as a Growth Area Biotech Drug Spending Sources: CMS National Healthcare Expenditure Projection 2003-2013
What Does This Mean to a Plan? In 2007 Specialty Pharmacy spend was approximately 11.4% of total pharmacy spend (and was over 1/3 of the total trend driver) The year over year specialty trend was 12.3% Unit cost was responsible for 8.4% with utilization making up the other 3.9% Top three categories of specialty drug spending: Autoimmune diseases (Rheumatoid arthritis, Psoriasis, Lupus) Cancer Multiple sclerosis 13
Biotech Drugs and the Health Plan Health plans recognize that new drugs and new uses of existing drugs are creating revolutionary treatment advances. Coverage of drugs is essential and important for any health benefit plan. Purchasers are looking to plans to manage costs or pass excess cost on to the consumer Balancing the need of the purchaser with the needs of the consumer is difficult Not creating access problems for members is important. But so is keeping the plans affordable.
Disease Specific Examples of Drug Cost 15 Sources: 2008 Medco Drug Trend Report, Specialty Pharmacy News, October 2006
The Issues for Plans Page 16
As cost of therapy increase, the cost of providing care also increases
With purchasers pressure on controlling costs, plans have looked for new ways to involve patients in the management of costs.
However increasing co-payments and moving drugs to co-insurance tiers have brought about access issues for some patients
Plans increasingly look to external resources to assist members get access to care
Plan Assistance to Members Plans provide case managers to work with patients These case managers can do any or all of the following: Educate members about the medication and the need for compliance Help the patient access benefits in the most cost effective way Help the patient discuss treatment options with their physicians and perhaps find less costly, yet clinically effective treatments Help the patients locate sources of financial assistance Inform physicians of plan benefits and options for members. Remember, we are all in this together and the goal of patients, physicians and plans is to provide access to high quality, yet affordable care. 17
A Physician’s Perspective Page 18 Allan B. Goldstein, MD Physician and Consultant
The Problem of Financial Barriers Page 19 Office Visit Co-Pay
$30 – 50 out-of-pocket for each office visit
For weekly visits, $120-200 per month, $1,500-2,600 per yr
Oral Medication Co-Pay
Higher co-pay for brand (tier 2) and non-preferred (tier 3) meds
Increasingly subject to 20% co-insurance (tier 4)
Yearly costs for biologics may reach $100,000 or more
Co-insurance may be $20,000+ per year
Medicare Prescription Drug Coverage (Part D) Page 20
Premium: $0-100+ per month
Deductible: $275 per year
Coinsurance: $559 (25% of first $2,510)
“Donut Hole”: $3,216 (no coverage $2,510 to $5,726)
Total Out-of-Pocket $4,050 excludes monthly premium
“Catastrophic” Coverage: patient pays 5% of any expenses over $5,726
Total Out-of-Pocket = Lots!
The Scope of the Problem Page 21 Some Specialties Impacted: Endocrinology Gastroenterology Hematology Neurology Oncology Pediatrics Pulmonology Rheumatology
The Scope of the Problem Page 22 Some Diagnoses Impacted: Anemia Breast Cancer Colorectal Cancer Cutaneous T-Cell Lymphoma Lung Cancer Multiple Myeloma Myelodysplastic Syndrome Non-Hodgkin’s Lymphoma Pancreatic Cancer Rheumatoid Arthritis Psoriatic Arthritis Ankylosing Spondylitis Crohn’s Disease Cystic Fibrosis Multiple Sclerosis Gaucher’s disease Growth Hormone Deficiency
Physician Responses Page 23
Absorb the co-pay
Collect the co-pay up front
Refer to hospital or clinic
Stop providing infusion services in the office
Employ sub-optimal treatment regimen
Hire staff to conduct financial evaluation
Identify and counsel patients unable to meet out-of-pocket requirements
Consequences for Patients Page 24
Disruption of the patient/physician relationship
Increased travel and inconvenience
Financial stress or distress
Failure to take medications
Clinical deterioration and/or disease process progression
The underinsurance challenges may negatively impact the patient’s health.
A Pharmacist’s Perspective Page 25 Edith Rosato, PharmD Senior Vice President, Pharmacy Affairs and National Association of Chain Drug Stores Foundation
National Spending on Healthcare Cost increases for hospital outpatient services and prescription drugs continue to outpace those for inpatient and physician services. Annual Per Capita Percentage Change in Health Care Spending, by Category of Service, 2001-2006 Source: Bradley C. Strunk, Paul B. Ginsburg, and John P. Cookson. "Tracking Health Care Costs: Declining Growth Trend Pauses In 2004." Health Affairs Web Exclusive, June 21, 2005; and Ginsburg, Paul B., Bradley C. Strunk, Michelle I. Banker, and John P. Cookson. "Tracking Health Care Costs: Continued Stability But At High Rates In 2005." Health Affairs Web Exclusive, Oct. 3, 2006.
The Underinsured: Coping With Rising Prescription Drug Costs Represent 25M in 2007 and rising 72M or 41% of working-age adults have problems paying medical bills 29% unable to pay for basic necessities 39% use savings 30% take on credit card debt 46% skimp on medications 33% compared to 19% of adequately insured used ER The uninsured population compounds this issue Sources: The Commonwealth Fund, Biennial Health Insurance Surveys, August 2008
The Current State of Medication Adherence in the U.S. Estimated annual costs to the healthcare system: $177B Only 50% of patients take medications as prescribed Reasons for non-compliance: Cost Forgetfulness Denial of the illness Misunderstanding of the directions Lack of understanding of the disease Lack of symptoms Impact of chronic disease: 130M patients (45% of population); 7-10 deaths annually $1.3 Trillion annual drag on economy Represents 91% of all prescriptions filled The Result is a Significant Public Health Crisis Sources: National Council on Patient Information and Education, “Enhancing Prescription Medicine Adherence: A National Action Plan”. August 2007
Community Pharmacy Response Many chains have introduced prescription savings programs to assist the uninsured or underinsured Covers prescription brand and generic drugs, preventative and lifestyle drugs, vision, dental and hearing…even pet meds
Other Discounted Drug Programs and Financial Assistance Programs HealthCare Club of America
Retail Clinics Health and wellness destination Offers affordable healthcare One-stop shopping convenience
Government Programs Health Resource Services Administration 340B Program Safety Net Clinics Medicare Part D: Covering the “donut hole” patients SCHIP: America’s Promise Alliance and All Kids Covered
Healthcare Reform Debate: Opportunity to Advocate for Patients High quality, affordable and accessible healthcare coverage should be the goal of any reform proposal Cost-sharing, such as patient co-pays, should be set at affordable levels and not prevent patients from seeking appropriate medical care Patients should have access to the most cost-effective medication to treat their condition Lower cost, equally effective generic medications should be encouraged Preventative services such as medication therapy management should be encouraged
Role of the Pharmacist Convenient, highly accessible community based health resource for patients Pharmacists are knowledgeable about available programs for uninsured and underinsured patients Encourage patients to utilize and interact with their pharmacists
Conclusions Page 35
Patients are making life or death decisions based on their ability to pay for healthcare
Each healthcare component is trying to help in its own way
Medication costs are a large component of the challenge.
Each healthcare component has constraints imposed by the government, stockholders, funding, etc.
Many challenges remain
Healthcare reform is likely to create new challenges