For Seniors, a Fix for Rx Sticker Shock
One of the most crucial – and most invisible – barriers to quality health care is when patients don't fill their prescriptions. Not surprisingly, the most common reason for this "non-compliant" behavior is out-of-pocket costs. What might surprise you is that the majority of cost-based medication non-compliance impacts those patients with insurance.
Here's some good news for America's seniors, Senators Bill Cassidy (R/LA) and Robert Menendez (D/NJ) have introduced the Seniors Prescription Drug Relief Act. Building on other Part D redesign concepts like an annual out-of-pocket maximum, this proposed bipartisan legislation would create an option for certain Medicare Part D beneficiaries to smooth their drug annual costs over an entire year. Not only would this allow America's seniors to avoid their sticker shock when they go to the pharmacy to fill their first prescription of the year, but it would allow them to better plan their monthly medical expenses. This is a significant step in the right direction. It's fair, equitable and transparent – and will address one of the most significant issues in health care today – medication non-compliance.
This lack of medication compliance has dramatic effects on health. In the United States, it's estimated to cause approximately 125,000 deaths, at least 10 percent of hospitalizations, and a substantial increase in morbidity and mortality. Non-compliance has been estimated to cost the U.S. health care system between $100 billion and $289 billion annually.
Due to the complex benefit structure of the Part D Program, patients' costs are often front-loaded at the beginning of the year. By allowing Part D enrollees with high out-of-pocket costs to pay for their cost-sharing requirements in predictable installments rather than all at once, the Seniors Prescription Drug Relief Act will help patients overcome "first fill sticker shock," allowing them to budget and pay for the medications they need over the course of a full year. This mechanism will be particularly helpful for patients living with cancers, autoimmune diseases, hepatitis C, arthritis, emphysema, and many diseases and conditions that require ongoing and often expensive prescription drug regimens.
Other proposals in Congress, such as H.R. 19, the House Republican alternative to H.R. 3 and the companion Senate bill (S. 3129) sponsored by Senators Crapo, Toomey, Burr, Tillis, Enzi, Barrasso, and Risch include this policy and would also lower cost-sharing from 25 percent to 15 percent in the initial phase of the Part D drug benefit, which starts after a patient has paid his/her deductible and extends until he/she enters the catastrophic phase. A patient who reaches the catastrophic phase would save, on average, over $100 before reaching the threshold. This provides meaningful relief, especially for the numerous patients living on an economic tightrope.
Adherence to medicines helps keep costs down. Improved adherence to needed medicines can help control Medicare costs by reducing spending on other health care services. According to a 2014 National Bureau of Economic Research study, Medicare Part D coverage was tied to an 8 percent decrease in hospital admissions for seniors and approximately $1.5 billion in hospital-cost savings. Further, a recent study found improved medication adherence connected with the expansion of drug coverage under Part D led to a $2.6 billion reduction in medical expenditures annually among those diagnosed with congestive heart failure and without prior comprehensive drug coverage.
"First prescription fill sticker shock" is an urgent health care issue for all Americans. The Seniors Prescription Drug Relief Act is a good start. Medicare Part D has been an enormous success due largely to the partnerships it encourages between the public and private sectors. And the nearly 45 million Americans with Part D drug coverage are the victors. The same logic driving the Seniors Prescription Drug Relief Act should also be considered for the more than 273 million Americans with private health insurance. Ever higher, bottomless cost-sharing requirements are a game the insurance industry should not be allowed to play with the health care of any American.
Peter J. Pitts, a former FDA Associate Commissioner, is President of the Center for Medicine in the Public Interest