2006 January 15 Sunday
Sicker People Should Pay Less To Lower Cholesterol

A Rand Corporation study found that people at greater risk of heart attacks and strokes should pay less for statin drug co-pays than people at lower risk.

Cutting drug copayments for people taking cholesterol-lowering medication can keep them healthier and save more than $1 billion a year in medical costs in the United States, according to a RAND Corporation study issued today.

The study found that when cholesterol-lowering drugs cost less, patients are more likely to take the prescribed medication. As a result, many people have fewer health problems and are hospitalized less often.

The Rand researchers were able to get at the effects of co-pays by using data from many health insurance plans that differed in their levels of co-pays.

Researchers based their findings on estimates that about 6.3 million U.S. adults with private insurance or Medicare coverage take cholesterol-lowering medication. The study says cutting copayments to make the drugs cheaper for the sickest patients would avert nearly 80,000 hospitalizations and more than 31,000 emergency room visits each year – accounting for the more than $1 billion in savings.

RAND Health simulated the impact of a variable copayment plan by analyzing information from 88 health insurance plans that served more than 62,000 patients who began taking cholesterol-lowering drugs between 1997 and 2001.

“Reducing drug copayments for the sickest patients taking certain drugs can be a way to both improve patient care and hold down rising costs,” said Dana Goldman, director of health economics at RAND Health and lead author of the study. “There are obstacles to these policies, but our research suggests they should receive wider consideration.”

The RAND work needs to be duplicated for other drugs and diseases. This would be an interesting way to get at the general efficacy of a large assortment of drugs to find out which one really help reduce the incidence of disease and which ones best reduce other medical costs.

The study found that patients who had $10 per month copayments for their cholesterol-lowering medication were 6 to 10 percent more likely to fully comply with doctors' orders to take the drugs than patients who had $20 per month copayments. High-risk patients were less likely to be influenced by higher costs.

In addition, researchers analyzed the link between patients' drug compliance and their use of medical services for up to four years after starting cholesterol-lowering therapy. The researchers found that patients who were more compliant in taking their medication had lower hospitalization rates and emergency room use, particularly patients who had a higher risk profile.

Using these findings, researchers simulated the impact of a policy that eliminated copayments for both high-risk and medium-risk patients, but raised monthly copayments required for low-risk patients from $10 to $22.

While the approach appears promising, researchers warn that there are some potential problems their study did not resolve. For example, health plans with lower drug copayments for high-risk and medium-risk patients may attract higher numbers of sick patients, while discouraging healthier patients who may perceive they are penalized by being charged higher copayments.

Note that the existence of a large variety of health care plans ends up being a big experiment. Data mining on records from those health care plans could turn up many other insights on what works and what doesn't work to reduce the incidence of disease and medical costs.

Share |      By Randall Parker at 2006 January 15 06:36 PM  Economics Health

AMac said at January 16, 2006 12:22 PM:
patients who had $10 per month copayments for their cholesterol-lowering medication were 6 to 10 percent more likely to fully comply with doctors' orders to take the drugs than patients who had $20 per month copayments.

Stunning, when I compare this report of people's actions to my own biases on what's worth spending money on. To the extent that this 6% to 10% change in behavior is due to the decisions of very-low-income families who lack the ability to re-allocate discretionary spending, it's easy to understand. But I suspect that's not the main dynamic.

A close family member, like me a middle-class American, spent many years in the UK, covered by the National Health Service. After returning to the US, she was indignant at having to pay for health care, as gratis checkups and prescriptions are human rights.

I wonder how many people are resentful that they are forced to hand over a co-pay for something that ought to be free. They'll grudgingly ante up a small amount of money ($10), but at some point ($20), enough is enough, and it's time to take a stand on principle. With any objective effects on one's health being quite secondary to the decision-making process.

There are other issues that would make it difficult to get a quantitative handle on the reasoning behind the decision not to comply with doctor's orders. For example, patients may underestimate the importance of taking these cholesterol-lowering drugs.

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