Tag Archives: prescriptions

We’re Using Less Health Care, But Spending is on a Rise

If you went to the doctor less or used fewer prescription drugs last year, but were surprised to learn that your health-care spending still went up, you’re not alone.

Spending per enrollee in employer-sponsored health plans—in other words, most Americans—grew an average of 3.9 percent in 2013, despite the fact that people were using less medical services overall, a new report out Tuesday reveals.

The relatively moderate growth for health-care costs would have been more dramatic if people with employer-based insurance had used the same amount or even more such services than they did last year.

In dollar terms, spending in 2013 grew an average of $183 to $4,864 per insured adult under age 65, according to the report by the Health Care Cost Institute.

The amounts include the cost borne by the employer-sponsored insurance plan as well as out-of-pocket payments borne by the insured adult.

The growing gap between prices and actual use was strikingly illustrated in the HCCI report by how much use of brand-name prescription drugs fell among employer-insured adults under age 65, compared to how the prices of those drugs grew.

In 2013, use of such brand-name drug prescriptions filled per day dropped 15.5 percent a compared to the prior year, HCCI found.

But the average price of brand-name drugs filled per day jumped more than 21.2 percent, leaving total spending overall on brand-name prescriptions up of 2.4 percent compared to 2013, the report found.

Likewise, a slight drop in acute in-patient admissions of 2.3 percent was more than offset by a 6.7 percent rise in overall in-patient spending, according to HCCI.

And a 6.4 percent bump up in prices for out-patient medical services significantly outpaced the very slight drop in the number of outpatient visits. This was also the first time in recent years that HCCI found a drop in outpatient visits.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

CVS Health Prescription-Drug Plan Causing Controversy

On the front of its Business Day section, the Wall Street Journal  (10/21, B1, Silverman, Ziobro, Subscription Publication) reports that a CVS Health prescription-drug plan will charge patients up to $15 more for medications from pharmacies selling tobacco products. The city of Philadelphia, with around 5,400 nonunion employees, is the first to enlist in the preferred health network, including between 150 and 200 CVS stores and roughly 100 independent pharmacies. Critics argue the CVS coverage plans provide an advantage to its own pharmacies without reducing costs, prompting calls for the Federal Trade Commission to investigate the decision. While CVS states it will provide a list of qualifying pharmacies, tobacco-free independent pharmacies are still concerned customers will be steered toward CVS for guaranteed savings. The article also outlines a prior FTC investigation of CVS following its merger with Caremark.

 The Wall Street Journal  (10/20, Silverman) broke the story in its “Pharmalot” blog, the majority of which was reincorporated into the full report. The blog pointed out that a CVS spokeswoman did not respond to questions of revenue gain estimates, though an expert expected the move would shift prescriptions from other pharmacies to CVS.

The Chicago Tribune  (10/21, Channick) reports that CVS Health has set a Jan. 1 target date for launching the tobacco-free pharmacy network. Leemore Dafny, professor of strategy at Northwestern University’s Kellogg School of Management, said the measure isn’t necessarily anti-competitive, citing preferred networks for pharmacies as a growing trend.

In its “Wonkblog,” the Washington Post  (10/21, Millman) reports that CVS is still in the process of identifying which pharmacies in its 54,000 store network don’t sell tobacco products.

In Forbes  (10/20, Japsen), contributor Bruce Japsen points out that Caremark’s decision to market the tobacco-free network, which could hurt competitors such as Walgreens and Wal-Mart, came at the request of clients following the CVS decision to stop carrying tobacco products. The network also includes Target stores with pharmacies. The narrow network strategy is described as “becoming more common from insurance companies and pharmacy benefit managers.” CVS Health would not confirm the Wall Street Journal’s “Pharmalot” blog’s reported co-pay of “up to $15.”

Vox  (10/20) contextualizes the development within the bargaining power of Caremark as a pharmacy benefits manager, stating the decision “helps explain why CVS was okay with giving up” its tobacco sales.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Predictive Health Analytics are Forecasting your Health Care Consumption

There may be a link between your Internet use and how often you end up in the emergency room.

At least that’s one of the curious connections to emerge from a health care analysis project at the insurance division of the University of Pittsburgh Medical Center.

U.P.M.C. is a $12 billion nonprofit enterprise that owns hospitals in western Pennsylvania as well as a health insurance plan with about 2.4 million members. It is at the forefront of an emerging field called predictive health analytics, intended to improve patients’ health care outcomes and contain costs. But patients themselves are often unaware of the kinds of intimate details about their households that insurers and hospitals may use to try to sway their treatment decisions.

The Pittsburgh health plan, for instance, has developed prediction models that analyze data like patient claims, prescriptions and census records to determine which members are likely to use the most emergency and urgent care, which can be expensive. Data sets of past health care consumption are fairly standard tools for predicting future use of health services.

But the insurer recently bolstered its forecasting models with details on members’ household incomes, education levels, marital status, race or ethnicity, number of children at home, number of cars and so on. One of the sources for the consumer data U.P.M.C. used was Acxiom, a marketing analytics company that obtains consumers’ information from both public records and private sources.

With the addition of these household details, the insurer turned up a few unexpected correlations: Mail-order shoppers and Internet users, for example, were likelier than some other members to use more emergency services.

Of course, buying furniture through, say, the Ikea catalog is unlikely to send you to the emergency-room. But it could be a proxy for other factors that do have a bearing on whether you seek urgent care, says Pamela Peele, the chief analytics officer for the U.P.M.C. insurance services division. A hypothetical patient might be a catalog shopper, for instance, because he or she is homebound or doesn’t have access to transportation.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary