Copay waiver programs cut health costs, improve productivity

John Miall was the risk manager for the city of Asheville, N.C., in 1998 when it launched "a collaborative effort that engaged physicians, pharmacists, patient educators, employers and patients" to try to reduce the medical costs of employees with diabetes.

The initiative included no copayments for laboratory work and diabetes medication, free glucose meters, patient education and paying pharmacists for ongoing patient counseling.

After the city saw positive results in the first year, it extended a similar program to patients with asthma and those with cardiovascular risks. For each program, patients signed an agreement with the city committing to seeing a doctor, receiving counseling and taking their medications as prescribed.

Those who did not comply were notified that they no longer would receive free medications and services, Mr. Miall said.

"We learned that was the greatest adherence tool we ever saw," Mr. Miall said.

Three studies of the Asheville programs, which also included employees of Mission Hospital in Asheville, were published the Journal of the American Pharmacists Assn. starting in 2003 and showed dramatic results.

While "costs shifted from inpatient and outpatient physician services to prescriptions...total mean direct medical costs decreased by $1,200 to $1,872 per patient per year," compared with the year prior to the program, one study concluded.

"Days of sick time decreased every year (1997-2001) for one employer group, with increases in productivity estimated at $18,000 annually," according to another study.

Mr. Miall, who retired as risk manager in 2004, now is a consultant to HealthMapRx, a program formed to replicate the Asheville model nationwide. HealthMapRx, a service of the American Pharmacists Assn. Foundation, has been implemented at 10 public and private sites nationwide. First-year outcomes data were released in April.

Data from the Diabetes 10 City Challenge found that average total health care costs were reduced by $1,079 per patient. According to the study, patients saved an average of $593 per year on their diabetes drugs and supplies due to copay waivers.

"Our model is a success because it is a total process," Mr. Miall said. "I know a hospital system that (waived) drug copays alone and nearly went broke."

Pitney Bowes Inc., which launched its value-based pharmacy design in 2002 and now applies the strategy to a range of chronic diseases, spent about 18% less on total medical costs in 2008 than its "benchmark peers," said Andrew Gold, executive director of global benefits planning in Stamford, Conn.

The technology and services provider now waives or reduces copays for diabetes, hypertension, asthma, osteoporosis, anti-seizure and cancer-fighting medications as well as prenatal supplements.

"We haven't been measuring the dollar savings, but looking more at the overall costs to Pitney Bowes against its benchmark peers," Mr. Gold said. "Some years are better than others. We're not immune to the (economic) challenges in health care."

"Compliance is good," he said. For example, compliance with controller medications for asthma doubled since 2006, significantly decreasing the use of emergency inhalers, he said. "When we first started, half of our asthmatics were on an emergency inhaler, which led to increased visits to the ER and hospital time to get stabilized," he said.

Unlike the Asheville Project model, "there are no conditions" employees must meet to have their drug copays waived or reduced. "We wanted to make it as barrier-free as possible. We are a firm believer in using the carrot over the stick," Mr. Gold said.

However, he stressed that Pitney Bowes makes a comprehensive wellness support system available to employees, including disease and care management through its insurers; education; onsite clinics; pharmacist support through its pharmacy benefit manager, CVS Caremark Corp.; an onsite pharmacy in Connecticut; and free financial advice.

"It's a good step to look at copays to make sure they're not a barrier to receiving care," Mr. Gold said. "But if that's all you do, you're ultimately not going to be as successful."