Study: Higher copayments hurt patients

In one of the first studies to examine this significant shift in insurance coverage, higher copayments not only helped control costs but also apparently led some employees to stop taking their medications.

Researchers at Harvard Medical School, who reported their results in today's New England Journal of Medicine, examined what happened to employees whose companies raised medication copayments dramatically or moderately. At the unnamed company that raised copayments dramatically, 16 percent of workers who were taking ACE inhibitors for high blood pressure stopped taking the medication altogether; 32 percent of workers taking proton-pump inhibitors for heartburn stopped, and 21 percent taking statins to lower cholesterol discontinued their medicine.

The study did not follow these patients to determine whether their health deteriorated.

At this particular company, an additional 35 to 50 percent of employees taking these drugs switched to lower-cost drugs -- the original intent of the higher copayments.

"We definitely want to provide this information to employers, health plans, and policy makers," said Harvard researcher Haiden Huskamp. "These arrangements sprang up pretty recently, and they're the dominant method now, but there hasn't been a lot of information about their effects on patients."

She said the information is particularly important for federal regulators as they decide how to implement prescription drug coverage for senior citizens enrolled in Medicare.

In an accompanying editorial, Cindy Parks Thomas of Brandeis University said that while Congress debates Medicare prescription drug coverage, "a quiet revolution has been taking place in the way benefits are managed for 200 million Americans who already have insurance for prescription drugs."

Just a decade ago, most employees paid a standard $5 copayment for a prescription, no matter what kind of medication they bought. Now, 63 percent of all health plans have adopted so-called "three-tier formularies," which often charge workers $10 for generic drugs, $15 for preferred or low-cost brand-name drugs, and $25 or more for non-preferred or expensive brand name drugs. This means, Thomas said, that for specific drugs, an insured person pays up to half the full price -- a dramatic change from the mid- and late-1990s.

These three-tier plans have saved money for health plans and employers, reducing drug expenditures up to 30 percent, by encouraging members to buy fewer prescription drugs and cheaper ones.

But, Thomas said, "important questions remain regarding the effect of these formularies on patients' health outcomes."

The Harvard study didn't answer these questions, but suggested that negative effects on patients are possible and that more research is needed. Almost all Massachusetts health plans and employers have three-tier

formularies. The researchers studied pharmacy data from 1999 to 2001 gathered by Medco Health Solutions, which manages pharmacy benefits for health insurers and employers. Researchers tracked employees at two companies that were adopting higher copayments, and who had filled at least two prescriptions for ACE inhibitors, statins, and proton-pump inhibitors before the change. They reviewed patients' prescriptions for six months after their companies adopted higher copayments. They compared changes in patients' behavior to those at two other companies that had not made any changes in copayments.

The most dramatic change --patients dropping drugs altogether -- occurred at the company that increased copayments from $7 for all drugs to $8, $15, and $30. It is possible, however, that some of these employees continued taking their drugs but switched to filling their prescriptions under a spouse's health insurance plan.

Researchers also studied a company that made more modest changes -- keeping a $6 copayment for generic drugs and a $12 copayment for cheaper brand-name medicines but adding a $24 copayment for expensive brand-name drugs. Employees at that company switched to less expensive drugs but did not drop their medicines more often than those at the comparison company.

"What we would recommend to employers and health insurers is to go slowly," said Dr. Patricia Deverka, vice president of scientific affairs for Medco.

Liz Kowalczyk can be reached at kowalczyk@globe.com.