Evaluating the Nondrug Costs of Formulary Coverage Restrictions

Substantial nondrug costs result from switching prescribed medications in response to changes in insurance coverage, and many nonreimbursed costs shift to providers and patients.

Tufts-New England Medical Center, Boston

Purpose: Clinicians often are required to switch prescribed therapy for their patients in response to health plan initiatives for controlling drug expenditures. To explore the effect of these initiatives, we sought clinicians’ feedback regarding their practices and processes for switching patients’ medications to accommodate insurance coverage.

Design: Self-administered Intranet-based survey of clinicians at an urban, tertiary-care hospital.

Methodology: Using survey responses, we calculate nondrug costs induced by formulary cost-saving measures.

Principal findings: A total of 91 responses were received from 569 providers who were sent a request to complete the questionnaire via electronic mail (18 percent response rate). It took an average of 11.1, 18.9, and 16.4 minutes for physicians, nurses, and nurse practitioners/physician assistants, respectively, to make the medication switch. The mean number of switches per month ranged from 10.6 to 36.9. More than half the time spent on these switches is not directly reimbursed. Specific switch-induced intervention costs differed for different drug types. The effect on clinician workload tended to be an inconvenience. While the majority of physicians and nurse practitioners/physician assistants did not feel this process damaged patient-provider relations, most nurses did.

Conclusions: In response to formulary restrictions, other costs are induced and incurred by providers and patients. The extent of patient costs, including those from adverse drug reactions, needs further study. More research is needed to elucidate costs and burden shifts as all parties involved evaluate and modify plans to moderate prescription drug expenditures.

Key words: Formulary, cost, nondrug, insurance, benefits