If We Care About Patients, It’s Time to Focus on Benefit Design

Voters going to the polls are concerned about a lot of issues: coronavirus, the economy, education, social justice and much more. Of course, health care is always on the list of concerns. While many in Washington and in state capitols assume that rising prescription drug costs dominate those fears, the reality is much different.

In fact, recent surveys point to voters’ growing anxiety around covering out-of-pocket costs (deductibles, copays and co-insurance) when they get sick. Working Americans – those with employer-sponsored health insurance – fear that paying their premiums doesn’t mean they are protected from the financial catastrophe that can accompany serious illness. 

For far too long, health care affordability has been measured by consumers’ premium costs. The reality of today’s affordability crisis is that many Americans are paying hundreds of dollars for their monthly insurance premium – but can’t afford to use their insurance when they need it. That’s a problem.

An Inequitable Burden

Those who face the greatest burden from these cost pressures in our system are the most vulnerable Americans: those with very serious or chronic conditions and often those with the least-generous insurance. Compounding this inequity are the disparities patients face between different types of treatment – if you need medicine to manage your illness, the current system often works against you. In 2018, total U.S. spending on hospital care was more than $1 trillion, compared to $335 billion on outpatient prescription drugs. However, due to insurance benefit design, consumers were on the hook for $12 billion more in out-of-pocket costs for their outpatient prescriptions than for their hospital care. 

This begs the question: Why aren’t outpatient prescriptions covered to the same extent? After all, the benefits of medication adherence are well-documented. Studies have found that more than 25 percent of hospital readmissions are preventable or related to prescribed medications. Proper medication adherence could save the system between $100 billion and $200 billion annually. 

Yet, we consistently see patients forced to pay more out-of-pocket for their medicines – despite prescription drug spending continually tracking well below the rate of inflation. According to 2018 CMS data and a recent report by Drug Channels, outpatient prescription drugs accounted for only 9.2 percent of U.S. health care spending, down from nearly 10 percent in 2015. Despite this, the share of employer–sponsored health plans requiring patients to meet a separate deductible for prescription medicines increased from 23 percent to 52 percent – often forcing patients to pay thousands of dollars out-of-pocket for their medicines before their coverage kicks in. 

It’s Time to Talk About Benefit Design

Former U.S. Surgeon General Dr. C. Everett Koop once said, “Drugs don’t work in patients who don’t take them.” The rise of high-deductible plans and separate prescription drug deductibles has made out-of-pocket costs unsustainable for many patients. Those without insurance are at an even greater risk: The Centers for Disease Control and Prevention reported that 11 percent of insured patients and 33 percent of uninsured patients do not take their medications as prescribed in order to save money.

Let’s be clear – a strategy that seeks to contain health care costs by denying access is not only counter-productive but penalizes patients from seeking the care they desperately need. If we are serious about addressing health inequities, then we must focus on evolving our benefit structure to contain out-of-pocket costs for patients and to enhance the sustainability and efficiency of the health care system. 

COVID-19 has exposed the best and the worst in our health care system. We’ve seen dozens of innovative companies leap into the fray, producing an array of vaccines and treatments on an unprecedented timeline and scale. We’ve also seen clearly that without access to health care, those treatments will go unused. Congress recognized this by mandating that testing and treatment for COVID-19 be covered without out-of-pocket costs and by ensuring free access to vaccines. 

The devastation caused by poor benefit design is a slower-moving train than COVID-19, but it’s just as deadly in the long run. We need to stop with the rhetoric and start having a serious discussion about how to fix what’s broken and make insurance work for all of us to improve overall health outcomes.

Steve Collis is the chairman, president and CEO of AmerisourceBergen.

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