Role of Employers in Drug Coverage Decisions for Rheumatic Diseases

VBCR - June 2013, Volume 2, No 3 - Practice Management

By F. Randy Vogenberg, PhD, RPh
Institute for Integrated Healthcare
Co-Founder, Bentelligence

Rheumatoid arthritis (RA) and related maladies are part of a growing area of interest in chronic diseases among multiple-­market stakeholders. The disease tends to hit adults of working age, often during their most productive years. Although RA and other chronic diseases generally represent a small number of members, they also represent large expenses per member from the perspective of the healthcare services purchaser—especially employers.

There are many stakeholders in the healthcare marketplace, including patients, managed care organizations and pharmacy providers, manufacturers, third-party payers, and purchasers of care, which include employers. The latter group represents the minority among stakeholders, yet holds the risk of paying for most of the care within commercial health plans.

For employers, the primary concerns in RA are cost and productivity. For patients, it is, of course, access to therapies that provide optimal treatment and improved quality of life.

Purchasers want to ensure that they provide the right medication to the right patient at the right time (and price). Commercial entities that are self-funded include:

  • Employers (generally more than 500 employees)
  • Municipalities and school districts
  • Unions to include multiemployer plans.

These entities are involved in determining the coverage of care for patients with chronic diseases such as RA, and they play an important role in the type and delivery of care services through the choice of benefit design. Determining coverage for care is accomplished by these employers through the determination of a benefit design that is then managed by a third-­party vendor, such as a health plan.

Reassessing the Coverage of RA Drugs
Employers in particular are reassessing the role and importance that healthcare benefits represent for their employees in areas related to productivity, retention, and recruitment. For years, there has been cost shifting to employees as the cost of care increased through the recession and subsequent layoffs and reorganizations in the workplace.

Now, with the implementation of healthcare reform moving forward and a leaner workforce in place, the importance of health benefits has reemerged as a critical success factor for employers, as well as the most impor­tant benefit to retain current employees or attract new employees to a high-productivity workplace environment.

Although the coverage options for employee benefits continue to evolve, from an insurance perspective, coverage for chronic conditions such as RA has not fundamentally changed. Even with the introduction of new biologic therapies in recent years, little has changed in the prescription drug mix. Many plans continue to focus on older, chemical-based drugs that although less expensive, are also less advanced than some of the newer medications that are available today, thereby impacting the total cost paid by employers and the care that patients receive.

These market changes are driving shared financial risk to providers and to patients in the form of cost-sharing. Therefore, the application of benefit management tactics such as quantity limits, prior authorization, cost-sharing (eg, copay, coinsurance, and deductibles), mandatory mail, and other strategies need to be reconsidered in the context of using new treatment technologies from an insurance risk and multiple decision-makers perspective.

Employer’s Search for New Options in Patients’ Benefits
It has not always been clear to outsiders who actually controls benefit design; therefore, it is often difficult to reach decision makers to affect change, especially within self-funded entities.

Until the healthcare reform debate and the impact of the recession, employers had not felt compelled to explore more innovative and effective ways to deal with health benefits, including benefits for patients with RA. These 2 market forces have certainly had an impact on decision-making, as well as on the role that employers take on regarding health benefit strategy as it relates to the success of their business. Providers who are seeking to reach this population may now find that their messages are more likely to at least be heard.

Until recently, employers had little economic reason to significantly change their strategy. Now, in addition to other forces in the marketplace, the emerging impact of biologic agents, including those used to treat RA, on clinical treatment outcomes and economic impacts has further engaged employers in researching new options for health benefits. These options include a value-based design through existing vendors that are evolving a new services platform, as well as in-house initiatives through onsite clinics, or a combination of such ventures.

Such changes will be done in tandem with healthcare reform mandates but not necessarily in the same way as public sector programs, as evidenced by the rollout in 2013 of private insurance exchanges. These changes are causing a shift in roles among the stakeholders, including those who are responsible for benefit design decisions.

Ideally, benefit design would reflect employers’ desire to facilitate offering valuable benefit coverage through an optimal design that is employee (ie, patient)-centric. From a patient’s perspective, health benefits should allow for the evidence-based use of all appropriate drug therapies for individualized care, with minimal restrictions. From the employers’ perspective, the question is how can healthcare benefits best align the healthcare resources for which they are paying in their plans, and how can employers influence more optimal benefit designs to achieve their desired business results.

Value-Based Decision-Making in Benefit Design
The trends that are emerging around healthcare coverage are now driving value-based decision-making to encompass both clinical and economic performance in an employer-­sponsored health benefit plan. That approach includes the integration of care processes and payment with greater alignment across the continuum of care. Such an integrated approach is necessary to achieve the optimal economic and clinical design intentions that would meet the business goals of the entity.

Plan sponsors have been seeking a value-based perspective around the total cost of care that can be easily implemented across a large variety of entities with differing yet similar business goals for healthcare coverage outcomes. Employers and value are a natural mix but, at the same time, they are heterogeneous. Recognizing these differences and similarities can hasten the adoption of innovation in benefit design by employers in collaboration with their benefit advisors as well as their vendors.
Considering that patients with RA are now routinely managed with biologic therapies, benefit innovation needs to encompass the new decision framework for clinical and economic parameters.

For example, the site of administration in the human body, as well as ownership around the site of care where clinicians practice has created confusion in current benefit administration. Such approaches have often caused key stakeholders to interact at cross-purposes because of the inadequacy of benefit design for modern healthcare coverage.

Better aligning, organizing, and encouraging a more balanced approach through benefit designs with incentives can foster better economic and clinical outcomes not only for employers as the purchasers of healthcare, but for other stakeholders with a vested interest in the same outcome measures.

More Solutions Are Needed
The eventual solutions will require all of the key stakeholders to understand each other’s perspectives and develop multistakeholder-sensitive changes as part of any value-based benefit design for patients with RA.

Although mandates will evolve as a result of the healthcare reform framework now in place, many clinical practice decisions and benefit design innovations are likely to occur first in the commercial sector ahead of any implementation action by the Centers for Medicare & Medicaid Services or by Congress.

The speed at which change is now occurring in the private sector and as a response to commercial entity interests can show the way to achieving the value-based benefit designs envisioned within healthcare reform. It is now up to the commercial marketplace to accomplish the innovation and execution to avoid unwanted solutions or coverage alternatives that are less than desirable for employers and for patients with RA.

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