News and Commentary

Utilization slowed by switch from copayment to coinsurance

Switching from a copayment benefit design to a coinsurance benefit design slowed the growth of total per-member per-month (PMPM) expenditures for all drug classes but did not have a significant effect on overall PMPM utilization, according to a study in the Journal of Managed Care Pharmacy.

The research compared the drug expenditures and utilization rates in two privately-insured populations before and after a benefit design change was implemented in one of the groups.

Donald G. Klepser, PhD, MBA, assistant professor at the the University of Nebraska and lead author, says the “cost sharing shifts were not that dramatic, so it didn’t price too many people out of utilization. With coinsurance, the health plan doesn’t absorb price inflation solely — both the member and insurer are affected as prices go up.

“In our study, we still saw growth in utilization. It just didn’t grow so fast. This seems to be the way going forward — to give members a real share of the cost as opposed to a flat copayment.”

Changes in utilization and out-of-pocket costs
  Intervention group Comparison group
  Pre Post Change Percentage Pre Post Change Percentage
Per-member per-month change
Number of prescriptions 1.26 1.29 0.03 2.4 1.08 1.13 0.05 4.6
Patient out-of-pocket ($) 22.76 24.47 1.71 7.5 20.61 21.22 0.62 3.0
Employer ($) 49.53 52.40 2.88 5.8 40.93 46.19 5.26 12.9
Total ($) 72.29 76.87 4.57 6.3 61.54 67.41 5.84 9.5
Source: Klepser DG, et al. J Manag Care Pharm.2007;13(9):765–777.

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