When Pitney Bowes Inc. started making plans to
dramatically lower participant co-pays for medications to
treat several chronic illnesses, "People thought we
were crazy," says Dr. Jack Mahoney, Director of
Strategic Health Initiatives at the Stamford,
Connecticut-based mailstream technology and services
company. Then, when the company went ahead with the
pioneering program in 2002, "They said, 'That looks
crazy, but we will watch and see what happens.'"
Now that the results have become apparent, he says, "They
say, 'Gee, this looks interesting.' There is sort of
a groundswell of interest."
When Pitney Bowes used predictive modeling to take
a close look at its health-care costs, Mahoney says, "We
saw that our highest costs were associated with chronic
disease—not people diagnosed with chronic diseases, but
people who were diagnosed with a chronic disease and not
taking their medication."
The model indicated that managing the underlying
medical condition and eliminating access barriers to the
appropriate medications had the potential to help control
these costs. So, the employer decided to drop by 50% to
85% the participant co-insurance costs for drugs used to
treat asthma, diabetes, and hypertension.
"People began refilling their medications. For
example, we saw a surge in the use of insulin," Mahoney
says. "Total annual medical cost for a covered person
with asthma in our population fell by 15%. For diabetics,
the cost went down 8%. With hypertension, we are now just
starting to see results."
So, in 2007, Pitney Bowes added to the program
drugs for blood clotting, osteoporosis, secondary
prevention of breast cancer, and smoking cessation, as
well as anti-seizure medications and statins to lower
cholesterol for diabetics.
"The pharmacy cost trend is up, a little higher
than for other employers we benchmark, but that is driven
almost solely by utilization," Mahoney says. "We are
seeing our overall health-care cost per employee
stabilize, and it is lower than the benchmark." About 20%
of the company's active population has a chronic
condition that is affected by the change.
Two separate research reports released this summer
by nonprofit researchers agree with Pitney Bowes's
conclusions. Studies from RAND Corp. and the Integrated
Benefits Institute (IBI) find that increasing
participants' prescription cost-sharing leads to lower
levels of drug compliance for chronic conditions. That
ends up costing employers money, both in increased
medical expenses and decreased productivity.
"We are seeing a growing body of evidence that, for
some conditions—such as asthma and diabetes—as the co-pay
goes up, even for people who are high-risk, they will
often stop taking the medication or take a
sub-therapeutic dose. That leads to much greater health
complications, and greater cost to the employer," says
David Dross, Houston-based National Leader of Mercer's
Managed Pharmacy practice.