Economic Impact of Cost-Containment Strategies in Third Party Programmes in the US (Part I)1

Abstract

The rising cost of healthcare has strained the resources of governments, private third parties and individuals with responsibility to pay for it. Various strategies have been used in an attempt to control costs. This article examines the economic impact of 4 such strategies: (a) cost sharing; (b) prescription limits; (c) rebates; and (d) cost limits. Cost sharing has been successful at reducing utilisation of prescription drugs, although the effects have not been uniform across therapeutic categories. However, the long term effect on cost and utilisation of other medical services, and the impact on overall health status, remain largely unknown. Some evidence suggests that utilisation of other services may increase. The available data regarding drug rebate programmes have been descriptive in nature. However, the designs employed in this research do not establish a direct causal relationship between rebate programmes and changes in Medicaid drug expenditure. Furthermore, still unknown is the degree of cost shifting and the effect of the rebate programme on other large public and private drug purchasers. The Maximum Allowable Cost programme led to direct savings in drug costs, but the size of these savings was variable and uncertain because of administrative costs of the programme. The Estimated Acquisition Cost programme has not resulted in significant savings.

Association between Drug Insurance Cost Sharing Strategies and Outcomes in Patients with Chronic Diseases: A Systematic Review

“…Prescription drugs constitute a significant proportion of overall healthcare costs, with current annual spending for prescription drugs in the US at $259 billion, projected to double over the next decade [34]. One mechanism that has been devised to reduce the financial burden to insurance plans is to shift the burden from the insurer to patients [35], [36]. This shift of financial responsibility may lead to underuse of potentially important medications in people with chronic conditions [37], [38].…”

Impact of a Cost‐Sharing Drug Insurance Plan on Drug Utilization Among Older People

“…Cost‐containment strategies exist in many forms, for example, cost‐sharing, prescription limits, rebates, and cost limits 22 . In July 1996, the RAMQ introduced a dramatic change in the form of a cost‐sharing drug insurance plan, dramatic because it involved a deductible, coinsurance, and a premium.…”

“…Cost-containment strategies exist in many forms, for example, cost-sharing, prescription limits, rebates, and cost limits. 22 In July 1996, the RAMQ introduced a dramatic change in the form of a cost-sharing drug insurance plan, dramatic because it involved a deductible, coinsurance, and a premium. Most studies have examined the effects of minor changes on cost-sharing policies (for instance US$0.50 to US$1.00 copayment per prescription) and methodological designs varied significantly.…”

The Future of Prescription Drug Cost-Sharing: Real Progress or Dropped Opportunity?

“…7,8 Yet the need to measure the outcomes of copayment increase was widely recognized; the prevailing concern was whether higher OOP cost outlays would prompt or even force patients to reduce use of essential medication. [9][10][11] Consistent with the prevailing paradigm, most drug benefits research conducted since the mid-1980s has measured the impact of cost-sharing increase, usually applied to flat copayment amounts, on a variety of outcomes including utilization, cost, and medication adherence. [12][13][14][15][16][17][18][19][20][21][22][23][24][25][26] Several studies employing strong quasi-experimental (pre-post with comparison group) designs examined modest copayment increases (i.e., change amounts ranging from $5 to $13 for brand medications).…”