Employers Top Strategies for Controlling Healthcare Costs

EmployeesA report by Zywave’s revealed the top strategies that employers used to manage health benefit costs in 2012:

• While PPO remains the most prevalent plan type (43% of all known plans), there was a 5% increase in HSA plan types – from 16% to 21% of plans. This represents a common cost-control strategy as more employers shift to a consumer-driven model.
• The highest individual deductible option ($2,500) saw a significant increase over the past year, rising 7% in popularity. This supports the growth in HSA plan types, as HSAs must be accompanied by a high-deductible health plan. It also illustrates another employer cost-shifting strategy.
• The most common range for out-of-pocket costs stayed the same from 2011 to 2012, in the $2,500-$3,499 category. However, there was a noticeable shift toward higher out-of-pocket maximums across the board.
• Another cost-cutting strategy was to increase the prescription drug deductible.
• Though Rx deductibles under $50 remained the most common, the Rx deductibles over $250 now represent 25% of all plans – up 5% from 2011.

For more information, visit www.zywave.com.

The Keys to Controlling Specialty Drug Costs

Employers that use multiple cost management programs have a 50% lower specialty drug cost trend, according to a study by Express Scripts. “Specialty drug costs and use have escalated without sufficient oversight to manage waste or misuse of these expensive medications. Add in the impact of bad health decisions and you get poor financial and clinical outcomes, said Glen Stettin, MD, of Express Scripts.” Specialty medications are expected to account for $1 out of every $4 spent on prescription medications by 2014.

The following are some major factors that contribute to the rising costs of specialty medications for complex diseases such as cancer, hepatitis C and multiple sclerosis:
• Price inflation
• Increased utilization
• The introduction of new drugs

Employers that did not manage prescription costs saw a 28% annual average increase in specialty drug spending per member. In contrast, employers that had tight management of prescription drug costs only saw a 14% an annual increase. Tightly managed programs also saw higher adherence rates in top therapy classes, such as multiple sclerosis and oncology.

There was an 18% increase in spending on specialty drugs in 2012 compared to 17% in 2011. Unit costs are driving the specialty medication trend in the top 10 therapy classes. Specialty medications for inflammatory conditions, multiple sclerosis, cancer and HIV accounted for nearly 70% of annual spending on specialty drugs. The hepatitis C virus has a relatively low per-member-per-year cost of $7.82, but it’s the highest trending therapeutic category at 29%. It is expected to increase rapidly with the advent of new therapy regimens and screening guidelines.

Nearly 50% of specialty drug costs are billed on the medical side of the plan benefit, where it is difficult to apply the various pharmacy benefit solutions that can drive down costs. Spending on traditional medications decreased 1.5%, predominantly due to generics. For more information, visithttps://www.express-scripts.com.

Last Updated 09/22/2021

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