Benefits June 12, 2007

CDHP Offerings not to Increase as Predicted

June 12, 2007 (PLANSPONSOR.com) - A recent survey shows that most employers and health plan sponsors covering between 1,000 and 15,000 employees are not considering offering consumer-directed health plans (CDHPs) as a benefit option in the next few years.
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According to a press release on the survey results, 24% of respondents indicated they currently offer a CDHP option and, of those that do not, only 11% intend to adopt a CDHP option within the coming three years. The survey by Medco Health Solutions, Inc.’s Systemed Group also revealed that many plan sponsors do not agree with the proposition that CDHPs will help them control costs.

More than half (53%) of respondents said CDHPs are the approach least likely to have an impact on controlling their organization’s prescription drug costs, as compared to generic and mail-order strategies and disease management approaches. Also, nearly 30% said CDHPs will do more damage by discouraging patients from getting the care they need.

Other survey findings, according to the news release, include:

  • Mail order pharmacies also score high marks among plan sponsors. Ninety percent of respondents currently use strategies that encourage the use of mail order and 38% have rules that require it.
  • There has been a dramatic shift in plan sponsors’ benefit priorities in the last few years. Five years ago, the majority of surveyed organizations (63%) were most concerned with providing the broadest coverage possible to their beneficiaries; today, only 13% indicate that is their priority, while 73% are now most concerned with balancing cost and care.
  • When asked to identify top priorities when designing their plan for the coming year, 89% of respondents stated that maintaining the same level of benefit coverage was important to critically important; but 44% also responded that it was just as important that they shift a greater cost share to their employees.
  • When it comes to the world of cost-share strategies, three-tiered plan designs lead the way. Three-tiered plan designs are most common among for profit (80%) and non-profit (80%) organizations, while two-tiered plans are more often selected by unions (56%) and public sector (40%) organizations. Only six percent of plan sponsors employ a four-tier co-pay plan design. More than half of plan sponsors surveyed have flat-dollar co-payments.
  • While there seems to be no definitive consensus on what drives plan drug costs, nearly 40% of employers’ blame direct-to-consumer advertising for branded products. An additional 25% identify the increased use of specialty medications as the cost driver and another 21% cited price inflation of branded meds.
  • The survey revealed the continued emergence of a holistic approach to health benefits: 82% of respondents say that adding wellness or disease management programs is either important to critically important, while 78% believe integrating medical and prescription drug data is critically important in designing their health plan options for the coming year.
  • The survey also revealed that the majority of employers believe health benefits are the most important employer-sponsored benefits in the minds of employees: 54% of those surveyed believe that an employer-sponsored health plan is the most valuable to employees, outranking a $5,000 pay raise, five additional vacation days, participating in a 401(k) plan and paid-for life and disability insurance coverage.

The national peer study was conducted by ReedHaldyMcIntosh for Medco’s Systemed Group. The research firm polled 200 plan sponsors with 1,000 to 15,000 employees including private and public sector employers and labor unions to gauge their perspectives on prescription drug cost control measures they currently use, and those they plan to employ in the future.

To obtain a free copy of the report, Nine Leading Trends in Rx Plan Management, send requests to systemedinfo@medco.com .

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