Adding a third, more costly copayment tier for antidepressants reduces a member’s probability of using an antidepressant and also increases out-of-pocket spending by those who do use such a drug. This type of formulary design could be a problem for current users of antidepressants, says Dominic Hodgkin, PhD, associate professor at the Heller School of Social Policy and Management at Brandeis University. He is a coauthor of “The effect of a three-tier formulary on antidepressant utilization and expenditures” in the Journal of Mental Health Policy and Economics.

In the study, total spending per user decreased after introduction of a three-tier formulary, indicating that the enrollees were somewhat responsive to the formulary change, shifting away from the drugs that were nonpreferred. However, enrollee response was only partial, as indicated by an increase in out-of-pocket spending.

“When a health insurer implements a three-tier formulary, there are two extremes exhibited: In one, all members may switch to preferred drugs. In that case, the patients don’t get hit in the pocket. The other extreme is where the patients are unable to switch, and end up paying more out-of-pocket costs. In our study, the response was somewhere between those two.”

“Health plans may want to consider grandfathering in users when switching a drug from one tier to another. It might have taken a long time to find the right drug that works for the patient. You don’t want to yank him off it now, just for cost reasons,” says Hodgkin. “The plan could apply the copayment change to new users, not existing users.”

Antidepressant prescriptions per enrollee

Use of antidepressants grew more slowly for enrollees who switched to a three-tier formulary than for other enrollees who stayed with a two-tier formulary.

Annual antidepressant payments per user, by source of payment

Out-of-pocket payments per user per period increased by $16 in the three-tier group compared to only $3 in the comparison group. Concurrently, plan payments per user decreased $12 in the three-tier group and increased $18 in the comparison group.

Source: Hodgkin D, Thomas CP, Simoni-Wastila L, Ritter GA, et al. The effect of a three-tier formulary on antidepressant utilization and expenditures. J Men Health Policy Econ. 2008;11:67–77.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.