Employers Expect Moderate Cost Increases But Keep Wary Eye on Specialty Pharmacy
Expect overall health benefit cost increases at large employers next year to come in at a moderate 6%, but most of that will be because of specialty pharmacy costs, which are expected to skyrocket, according to a survey by the National Business Group on Health (NBGH).
Nearly a third of respondents (31%) said that specialty pharmacy was the biggest factor in cost increases, and this is a new development. In 2014, only 6% of large employers in the same survey cited specialty pharmacy as the number one driver of costs.
Pharmacy spending is expected to increase by 7.3% next year, with specialty pharmacy, which includes biologics, accounting for most of that. Specialty pharmacy costs are expected to increase by 16.8%.
Employers and health plans are scrambling to get a handle on the spending. “Prior authorization, step therapy, and quantity limits are used by nearly all employers,” the survey stated. Step therapy has come under fire. Stat posted a story about step therapy in August with this title: “Are insurance policies saving patients money, or keeping them from the treatment they need?”
The NBGH survey included 133 large employers (10,000 or more employees) that provide coverage to more than 15 million employees and their dependents.
Some of the techniques used by employers and health plans include use of a freestanding specialty pharmacy (69%), placing specialty pharmaceuticals in their own pricing tier (38%), and using case management that includes efforts like coaching programs and medication therapy management.
Some employers and health plans have implemented programs that more closely monitor the prescribing of the medications, according to the NBGH survey. For example, 83% of employers have worked with their health plans, PBMs, or both, to place restrictions on how compounded medications are prescribed as a response to spikes in compounded medication costs. In addition, 17% of employers have instituted restrictions on medications when the pharmacy manufacturer offers patients coupons or rebates to reduce their copayments or coinsurance. Coupons and rebates can seem like a great deal for patients, but they’re used to build a market for costly brand name drugs instead of cheaper generics.
Difficult Birth For Maternity Bundles
It would seem that bundling payments for maternity care would be a no-brainer, but there are significant hurdles, according to a white paper by the Health Care Payment Learning and Action Network, a collaborative effort that includes payers, providers, employers, and states, under the sponsorship of the federal government.
Bundling could lead to savings. Childbirth accounts for roughly a quarter of all hospitalizations and about $64 billion in payments to hospitals.
“Fortunately, Medicaid (which pays for approximately 45% of births annually), commercial payers, and large purchasers have begun to develop episode payment initiatives for maternity care in recognition of the ways in which episode payment can drive higher quality, lower-cost care,” said the white paper.
Because Medicaid is administered by the states, broadly mandating maternal bundled payments across the country is difficult, if not impossible. There’s also the question about which services and care should the bundle payment include.
There are three general bundling models, comprehensive, comprehensive birth center/midwife, and blended rate for hospital labor and birth, according to the white paper.
Comprehensive defines the episode as prenatal, labor and birth, and postpartum for the woman and, sometimes, for the newborn. “It is agnostic as to both the birth site and who manages the birth, and as to whether the birth is vaginal or a cesarean, but it is typically priced assuming a hospital birth,” the white paper stated.
A comprehensive birth center/midwife bundle is similar to comprehensive, but it’s priced based on midwife management.
The blended rate combines cesarean and vaginal birth reimbursement rates into a blended case for hospitals, with the goal of decreasing cesarean rates. Hospital payments and the clinical professional fees are the same in this model, regardless of the delivery method. The episode price also includes the costs of postpartum complications but not other post partum costs.
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Paul Lendner ist ein praktizierender Experte im Bereich Gesundheit, Medizin und Fitness. Er schreibt bereits seit über 5 Jahren für das Managed Care Mag. Mit seinen Artikeln, die einen einzigartigen Expertenstatus nachweisen, liefert er unseren Lesern nicht nur Mehrwert, sondern auch Hilfestellung bei ihren Problemen.