The effect of pharmacy benefit design on patient-physician communication about costs
Rent the article at a discountRent now
* Final gross prices may vary according to local VAT.Get Access
BACKGROUND: Incentive-based formularies have been widely instituted to control the rising costs of prescription drugs. To work properly, such formularies depend on patients to be aware of financial incentives and communicate their cost preferences with prescribing physicians. The impact of financial incentives on patient awareness of and communication about those costs is unknown.
OBJECTIVE: To evaluate the relationship between enrollment in incentive-based pharmacy benefit plans and awareness of out-of-pocket costs and rates of communication about out-of-pocket costs.
DESIGN: A matched telephone survey of patients and their primary care physicians.
SETTING: Los Angeles County.
PARTICIPANTS: One thousand nine hundred and seventeen patients aged 53 to 82 (73% response rate).
MEASUREMENTS: Patient-reported pharmacy benefit design, knowledge of out-of-pocket costs, and discussion of out-of-pocket costs with physicians.
RESULTS: Sixty-two percent of patients who had prescription drug coverage and were aware of their pharmacy benefit design reported being enrolled in incentive-based plans. The majority of these (54%) were “never” or only “sometimes” aware of their out-of-pocket cost requirements at the time of the physician visit. After controlling for numerous physician and patient level variables, we found that patients enrolled in pharmacy benefit designs requiring no copayments were more likely to report they “never” discuss out-of-pocket costs with physicians compared with patients enrolled in incentive-based pharmacy benefit designs (81% vs 67%, P=.001) and patients with no prescription drug insurance (57%, P<.001).
CONCLUSIONS: Incentive-based pharmacy benefit plans and lack of insurance are associated with increased rates of discussions about out-of-pocket costs. Nonetheless, most incentive-based enrollees are unaware of out-of-pocket costs when prescriptions are written and never discuss out-of-pocket costs with their physicians, likely mitigating the effectiveness of financial incentives to guide decision making. Considering that out-of-pocket costs are associated with adherence to medical therapy, interventions to improve patient access to out-of-pocket cost information and the frequency of patient-physician discussions about costs are needed.
- Kaiser Family Foundation and Health Research and Educational Trust. Employer health benefits: 2004 summary of findings. Available at: http://www.kff.org/insurance/7148/sections/loader.cfm?url=/commonsport/security/getfile.cfm&PageID=46224. Accessed January 22, 2005.
- Frist WH. Health care in the 21st century. N Engl J Med. 2005;352:267–72. CrossRef
- Doherty RB. Assessing the new medicare prescription drug law. Ann Intern Med. 2004: 141 (5). Available at: http://www.annals.org/. Accessed August 17, 2004.
- Hoadley J. The Effects of Formularies and Other Cost Management Tools on Access to Medications: An Analysis of the MMA and the Final Rule. Kaiser Family Foundation Report. Available at: http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile. cfm&PageID=51878. Accessed April 17, 2005.
- Trude S, Grossman JM. Patient cost-sharing innovations: promises and pitfalls. Issue Brief No. 75, Center for the Study of Health Systems Change. Available at: http://www.hschange.com/CONTENT/643/. Accessed May 6, 2004.
- Shrank WH, Young H, Ettner SL, Glassman P, Asch SM, Kravitz R. Do the incentives in three-tier, incentive-based pharmaceutical benefit plans operate as intended? Results from a physician leadership survey. Am J Manage Care. 2005;11:16–22.
- Alexander GC, Casalino LP, Meltzer DO. Physician strategies to reduce patients’ out-of-pocket prescription costs. Arch Intern Med. 2005;165:633–6. CrossRef
- Alexander GC, Casalino LP, Meltzer DO. Patient-physician communication about out-of-pocket costs. JAMA. 2003;290:953–8. CrossRef
- Medical Expenditure Panel Survey Highlights. Distribution of Healthcare Expenses, 1996. Publication 00-0024. Rockville, MD: AHRQ; 2000.
- Mooney C, Duval R. Bootstrapping: a nonparametric approach to statistical inference. In: Lewis-Beck M, ed. Quantitative Applications in Social Science, Vol. 95. Newbury Park, CA: Sage University Press; 1993.
- Physician Characteristics and Distribution in the US, American Medical Association, 2003–2004 Edition. Hyattsville, MD: National Center for Health Statistics; 2004.
- Huskamp HA, Deverka PA, Epstein AM, Epstein RS, McGuigan KA, Frank RG. The effect of incentive-based formularies on prescription-drug utilization and spending. N Engl J Med. 2003;349:2224–32. CrossRef
- Goldman DP, Joyce GF, Escarce JJ, et al. Pharmacy benefits and the use of drugs by the chronically ill. JAMA. 2004;291:2344–50. CrossRef
- Hillman AL, Pauly MV, Escarce JJ, et al. Financial incentives and drug spending in managed care. Health Affairs. 1999;189–200.
- Stuart B, Zacker C. Who bears the burden of Medicaid drug copayment policies. Health Affairs. 1999;18:201–12. CrossRef
- Smith DG. The effects of copayments and generic substitution on the use and costs of prescription drugs. Inquiry. 1993;30:189–98.
- Reeder CE, Nelson AA. The differential impact of copayment on drug use in a Medicaid population. Inquiry. 1985;22:396–403.
- Harris BL, Stergachis A, Reid A. The effect of drug copayments on utilization and cost of pharmaceuticals in a health maintenance organization. Medical Care. 1990;28:907–17. CrossRef
- Tamblyn R, Laprise R, Hanley JA, et al. Adverse events associated with prescription drug cost-sharing among poor and elderly persons. JAMA. 2001;285:421–9. CrossRef
- Heisler M, Langa KM, Eby EL, Fendrick AM, Kabeto MU, Piette JD. The health effects of restricting prescription medication use because of cost. Med Care. 2004;42:626–34. CrossRef
- Glassman PA, Tanielian T, Harris K, et al. Provider perceptions of pharmacy management: lessons from the military health system. Med Care. 2004;42:361–6. CrossRef
- Hsu J, Reed M, Brand R, Fireman B, Newhouse JP, Selby JV. Cost-sharing: patient knowledge and effects on seeking emergency department care. Med Care. 2004;42:290–6. CrossRef
- Shrank WH, Hoang T, Ettner SL, et al. The implications of choice: prescribing generic or preferred formulary medications improves adherence to chronic medications. Arch Intern Med 2006;166:322–7. CrossRef
- The effect of pharmacy benefit design on patient-physician communication about costs
Journal of General Internal Medicine
Volume 21, Issue 4 , pp 334-339
- Cover Date
- Print ISSN
- Online ISSN
- Additional Links
- pharmacy benefit design
- prescription drugs
- doctor patient communication
- Industry Sectors
- Author Affiliations
- 1. Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital, Boston, MA, USA
- 2. Harvard Medical School, Boston, MA, USA
- 3. Department of Medicine, David Geffen School of Medicine, University of California at Los Angeles, Los Angeles, CA, USA
- 4. Center for Community Partnerships in Health Promotion, Department of Medicine, David Geffen School of Medicine, University of California at Los Angeles, Los Angeles, CA, USA
- 5. Veterans Affairs Greater Los Angeles Healthcare System, Los Angeles, CA, USA
- 6. RAND Health, Santa Monica, CA, USA