Rx Plan Design & Diabetes

An interesting story from The Chicago Tribune on employers eliminating co-pays for diabetes medications is here.

After years of raising co-payments and deductibles for prescription pharmaceuticals, some employers are taking an unorthodox approach to lowering health-care costs in an experimental program by -- get this -- paying for diabetes drugs and consultations.

For patients the savings could amount to $2,000 a year.

If the program proves successful it could be expanded to include other common diseases and chronic conditions such as asthma, depression or arthritis and extended beyond its one-year pilot phase, according to the Midwest Business Group on Health, a Chicago-based coalition of employers that is coordinating the program.

Nationally, more than 30 employer groups are rolling out similar programs this year in cities including Milwaukee, Pittsburgh and Los Angeles.

I have written on the Black Hole of STD as well as Lowering Rx Co-pays to reduce costs so here is a related item which focuses on the connection.

Results from a model project launched in 1997 by the city of Asheville, N.C., show a 50 percent reduction in sick days and no worker's compensation claims filed by the diabetes patients in the program between 1997 and 2003.

Asheville has expanded its program to people with asthma and high blood pressure.

So far, Chicago-area employers Pactiv Corp., the City of Naperville and the Jewish Federation of Metropolitan Chicago have agreed to participate in the program.

"Employers are beginning to realize that cost-shifting by itself will not change behaviors," said Larry Boress, chief executive of the Midwest Business Group on Health. "This is not just an isolated incentive where you are giving away trinkets or dollars but is part of a change in employee-benefits strategy to move people away from an entitlement mentality. The idea is that in order to change employee behavior and change the attitude in the way employees manage their health, employers are moving to value-based benefit designs."

Direct and indirect costs of diabetes to the U.S. health-care system are more than $130 billion a year, including emergency room visits, extended hospital stays and absenteeism, the Chicago group said, citing national studies. Some 20 million people have diabetes, including 600,000 in Chicago.