Cost of Care

April 23-27 Policy Watch: Drug Prices Draw Trump Focus

April 19, 2018 4:32 pm

Employers increasingly are using one of two approaches to control the impact of drugmaker coupons, which can spur the use of costly name-brand drugs.


April 19—President Donald Trump plans his first major speech on drug prices next week, but employer-sponsored plans are not waiting for the federal government to act.

It was unclear whether Trump’s April 26 address will be accompanied by a legislative push to control drug price increases, but employer-sponsored plans are moving ahead with their own efforts.

Drug prices have drawn increasing scrutiny from employers that offer insurance, said Alisa Ray, a vice president of the National Business Group on Health (NBGH), because of those companies’ growing reliance on so-called consumer-directed health plans (CDHPs), which are high-deductible plans that usually include some sort of savings account.

In 2018, 90 percent of large employers will offer at least one CDHP, and another 7 percent were considering offering a CDHP by 2020, according to NBGH’s latest survey of member companies. And the growing enrollment in CDHPs has exposed more people with employer-sponsored coverage to rising drug costs, which they have to pay for out-of-pocket until they reach high deductible amounts.

“Drug prices in the supply chain, we’re really looking at that now differently. We can’t ignore it … because consumers are totally exposed—or more exposed—to drug prices, more than they were in our old PPO world,” Ray said April 19 at the NBGH annual conference.

A majority of employers (57 percent) said they were concerned or very concerned about the impact of coupons on consumer behavior. Although coupons can help reduce patients’ drug costs, especially for some single-source brands, coupons also are offered to encourage patients to use a more costly brand-name drug over a generic, which increases overall healthcare costs.

As a result, some employers have taken steps to mitigate the drug price impacts of coupons. About one-third (34 percent) of large companies have launched programs to ensure that the cost of traditional medications does not apply to the deductible or out-of-pocket maximum when an employee receives a coupon from a manufacturer. Another quarter (27 percent) of employers have taken the same approach to specialty medications, which employers cite as the leading driver of healthcare cost increases.

Fewer employers (17 percent) have put in place a specific copay card accumulator program that adjusts deductibles and out-of-pocket maximums to account for consumer coupons, while 18 percent are considering adding such a program by 2020.

Other CDHP trends included an increase in the share of companies that offer only CHDPs to their workers from 35 percent in 2017 to 39 percent in 2018.

Changing Consumer Views

A survey released this week by Alight found mixed healthcare consumerism results. Sixty-six percent of enrollees in high-deductible health plans said they had more control over their health care, compared to 62 percent of all respondents.

In a related finding, a growing share (50 percent) of high-volume healthcare users reported being able to understand and effectively manage how to pay for medical services.

The survey also found incremental increases in “savvy consumer” behavior, said Ray Baumruk, vice president for Alight Solutions.

Increasing shares of consumers reported asking a provider or insurance company about costs (56 percent) and comparing costs of a recommended medical service with those at a different provider (40 percent).

However, 60 percent of consumers have never compared costs for recommended medical services, and 44 percent have never asked about or looked up costs.

“It gives us some indication where people are from a consumerism standpoint, so some [positive] trends and good news there,” Baumruk said.

More concerning were indications that a small but growing share of patients is avoiding care to save money. The share of consumers who have given “serious consideration” to at least one way of forgoing care due to cost increased from 37 percent in 2017 to 40 percent in 2018.

“We would probably say, ‘I’m not sure that’s a great idea,’ from that standpoint; ‘We want to look for value, but we don’t want you to avoid care that you actually need,’ because we know where that cost will come down the road,” Baumruk said.

Monday, April 23

Close of comment period for the short-term health insurance plan proposed rule. Learn more.

Tuesday, April 24

Scheduled votes by the Senate Health, Education, Labor, and Pensions Committee on four bills, including two to address the opioid addiction crisis and a children’s hospital GME bill. Learn more.

The Centers for Medicare & Medicaid Services ( CMS) holds the National Provider Enrollment Conference (through April 25). Learn more.

Release of the spring 2018 Leapfrog Hospital Safety Grades. Learn more.

Advisory Board webinar, “The Next Wave of Health Care reform.” Learn more.

Senate Veterans Affairs Committee confirmation hearing for Ronny Jackson, MD, as secretary of the Department of Veterans Affairs. Learn more.

Wednesday April 25

CMS and Substance Abuse and Mental Health Services Administration (SAMHSA) forum, “Opioids Forum: Strategies and Solutions for Minority Communities.” Learn more.

End of the public comment period for the Transitions from Hospice Care, Followed by Death or Acute Care draft measure for the Hospice Quality Reporting Program. Learn more.

Health Datapalooza, Washington, D.C. (through April 27).  Learn more.

Webinar hosted by the Agency for Healthcare Research and Quality (AHRQ),“Overview of the HCUP Products and Tools,” referring to AHRQ’s healthcare cost and utilization project. Learn more.

Webinar hosted by the National Academy of Medicine as part of the “Improving Care for High-Need Patients: A Webinar Series.” Learn more. 

Webinar hosted by the American Hospital Association’s Workforce Center and the Association for Community Health Improvement on inclusive, local hiring and building the pipeline to a healthy community. Learn more.

Thursday, April 26

Webinar hosted by SAMHSA and Massachusetts General Hospital’s Recovery Research Institute on why addiction is a disease and why it is important. Learn more.

National Academies of Sciences, Engineering, and Medicine workshop, “Improving Health Professional Education and Practice through Technology.” Learn more.

Northern California State of Reform Health Policy Conference. Learn more.


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