DrugTrendsToday.com

Finding Alternatives to Private-Fee-For-Service Plans

Carriers dropping Medicare Advantage Private-Fee-For-Service (PFFS) plans for 2010 have left an estimated 660,000 seniors in need of a new plan for next year.  Many may be confused about their options, and may be wondering about what plans offer similar benefits to their current PFFS plan.  With less than two weeks left in this open enrollment season, it’s even more important to make the decision process as easy as possible.

What are the options?  Generally, Original Medicare or a Medicare Advantage PPO plan will provide the most similar benefits to a Medicare Advantage PFFS plan. Most Medicare PPO plans include prescription drug coverage, but seniors choosing Original Medicare will need to sign up separately for a Medicare Prescription Drug plan. They may also opt for a Medicare Supplement plan (Medigap) to help offset some of the costs from Original Medicare.

Seniors can use our free online PlanCompare tool to compare all of these plans in their area based on their drug regimen and preferences, and determine the best – and lowest cost – option for them.

Total Annual Cost: The Impact of Transparency on Healthcare Expenditures

In these hard economic times many people are wondering how best to manage their costs, and healthcare costs loom large in that context.  Most people pay for healthcare in two ways: premiums and out-of-pocket costs.  For perfectly healthy people the premiums are the bulk of their costs, but for everybody else the out-of-pocket costs are a key constraint.  Ironically, when choosing a health plan, which impacts both premiums and out-of-pocket costs, people focus on premiums and often ignore out-of-pocket costs, as they are so difficult to estimate.

Thus, there is great potential for total annual cost as a means for lowering healthcare expenditures for seniors, payors, and for ultimately driving down the overall cost of healthcare.  The bottom line is, comparing and choosing an optimal health plan based on total annual cost – which includes premiums, drug copays, and other medical expenses such as doctor visit copays – delivers significant cost savings for beneficiaries over shopping by premium costs alone. 

Based on analysis of 2009 data, using total cost comparison resulted in a 4-fold increase of Medicare Part D enrollments that minimize cost compared to a total population who have enrolled via all channels (e.g. agents, brokers, direct – most of which tend to compare premiums only, and not total cost).

In a related analysis (of a population of over 91,000 enrollees), we found that seniors who chose their plan based on total annual cost estimates spent a collective $172 million out-of-pocket, compared to the $205 million spent by seniors who chose the plan with the lowest premium.  That’s a difference of 16%.

Evidence also shows that using premium comparisons only can result in higher costs to the Federal government in subsidies, and substantial savings can be achieved through posting of total cost components in an Exchange setting, as is proposed as part of the healthcare reform on the Hill.

Further, adding transparency to a market re-orders the supply curve, initially lowering product and service costs—which in turn lowers premiums in later periods.  This is especially relevant when market participants have limited visibility as to the market clearing price, as we have seen with Medicare Part D.

This is just one small piece of the equation with many future implications for our healthcare system—but for now, transparency via total annual cost comparison can at the very least make an impact for seniors evaluating Medicare plans during open enrollment this year. There are tools out there, for example DestinationRx PlanCompare or Medicare PlanFinder, that will estimate out-of-pocket costs based on seniors’ particulars, such as where they live, the drugs they take, etc. This is a tremendous help in choosing a plan that allows one to minimize total annual cost.  In essence, the total annual cost calculation is a personalized analysis of the “fine print”.

~ Alexander Grunewald

Taking Advantage of Online Tools during Medicare Open Enrollment

Medicare open enrollment begins this Sunday (November 15^th), and seniors can maximize their chances of choosing the best-priced plan by utilizing web-based tools that offer side-by-side comparison of all costs associated with appropriate plans—based on the beneficiary’s location, drug regimen, and other preferences.

We have worked closely with the Centers for Medicare and Medicaid Services (CMS) since 2003, assisting in the implementation of the Medicare Modernization Act (MMA) and developing online plan comparison tools that account for all costs, compare them across all plan types, and provide an easy-to-read snapshot for consumers that makes choosing—and using—a plan as simple as possible.

Nearly three out of four Medicare beneficiaries who enroll online use a DestinationRx tool, either via Medicare.gov, our independent PlanCompare site, or various web portals such as Medicare.com, Medicare.org, and AOL Health.

PlanCompare has been expanded this year to include a number of upgraded features, such as:

• an updated Medicare 101 guide with more content to help the consumer understand Medicare, therefore helping them choose the best plan for their situation;

• the option to view by annual or monthly cost, including a monthly graph that creates a visual for the user to see the rise and fall of their costs over the next year, for each plan;

• the addition of Medicare Advantage and Medigap plans;

• a new “Did You Know” section, to guide the user throughout the site;

• an additional/more detailed list of benefits in a “Summary of Benefits” PDF document; and

• a new function that details out drug restrictions such as prior authorization, quantity limits, and step therapy.

Open enrollment is a free chance for seniors to evaluate their Medicare plan options and, if needed, make a change for the better.  We urge seniors to take advantage of this valuable opportunity—and the web-based tools that make it easy to compare, choose and use the absolute best option for them.

~Jim Yocum

Making the Most of Medicare Open Enrollment

With Medicare open enrollment fast approaching (it starts November 15^th), there are three key considerations seniors should keep top of mind:

1) Exercise your right to choose.  While you may be happy with the plan you currently have, it doesn’t hurt to shop around.  At the very least, you may find that the current plan is making changes to premiums or drug coverage that will impact your expenses next year.  Your drug coverage needs may also have changed due to changes in your medications. Or you may be surprised to find another plan that covers all of your needs – for less.

2) Look at the big picture.  The plan with the lowest monthly premium may not necessarily be the lowest cost option.  Take into account all anticipated out-of-pocket costs – including premiums, drug co-pays and other medical expenses such as doctor visit co-pays.

3) Consider lower cost alternatives for prescription drugs.  Combined with the optimal plan, choosing generic or therapeutically comparable options can maximize savings – and help avoid the dreaded “doughnut hole”.

Our PlanCompare Tool offers Medicare beneficiaries a convenient and easy-to-understand way to compare, choose and use the Prescription Drug Plan (PDP), Medicare Advantage Plan (with or without prescription drug coverage) or Medicare Supplemental plan that is best for them and their families.

Top Drugs Searched on DestinationRx.com - September 2009

The searches on our drug comparison website for September have been tabulated.  As has been the usual, the top three drugs searched in September were Lipitor (high cholesterol), Tri-Sprintec (contraceptive), and Synthroid (hypothyroidism).  Top drug categories searched include central nervous system agents (such as analgesics, sedatives and antidepressants), hormones and synthetic substitutes (including Tri-Sprintec and Synthroid, above), and cardiovascular drugs (like the top-searched Lipitor and other high cholesterol drugs, among others) (chart 2). 

 

Top Drugs Searched on DestinationRx.com - July 2009

July’s search numbers from our drug comparison website are in.  As shown in the first chart, the top three drugs searched in July were Lipitor (high cholesterol), Tri-Sprintec (contraceptive), and Synthroid (hypothyroidism).  Topping the list of categories most searched in July were central nervous system agents, hormones and synthetic substitutes, and cardiovascular drugs (chart 2).

 

No Immediate Relief for Biologics Costs in Sight

The New York Times recently reported that it is unlikely that costly biologic drugs – such as Avonex for multiple sclerosis, or Avastin for cancer – will have less expensive generic versions (biosimilars) available any time soon, and even when generics appear on the market the savings may not be all that significant.

In June 2009, the Federal Trade Commission (FTC) released a report entitled, “Follow-on Biologic Drug Competition.”  In this report, the FTC evaluated whether or not follow-on biologics (“generic” or biosimilar drugs) would cause price competition with innovator biologic drugs. As one of its conclusions, the FTC determined that giving  the FDA the authority to approve biosimilar drugs via an abbreviated pathway may result in efficiently bringing these drugs to market and increasing competition with biologic drugs.

There is so much debate over potential legislation, however, that it is uncertain how much of an improvement, if any, will come of it.  While some biologics have been on the market for a long time and may see biosimilar competition in the nearer-term – the patent on Amgen’s anemia drug Epogen, for example, is due to expire in 2013 – the fact is that biologics will likely be safe from competition for much longer.

In the meantime, the best things patients can do are 1) make sure they have chosen the best possible health plan for their needs, and 2) compare prices of all their drugs across all pharmacies to find the least costly options.  Although biosimilars or “generics” do not yet exist for biologics, comparable branded biologics may be available at a lower cost. In an effort to help patients work with their doctors, drug pricing comparisons and lower cost drug options of common chronic medicines as well as some biologic drugs are available through the Drug Compare Tool and other DestinationRx solutions.

~ Janie Kim, PharmD
   Director, Clinical Services

Top Drugs Searched on DestinationRx.com - June 2009

In an effort to maximize their healthcare dollar, thousands of consumers visit our drug comparison website every month to compare costs for brand name prescription drugs and their therapeutic alternatives.  The top three drugs searched in June were Lipitor (high cholesterol), Tri-Sprintec (contraceptive), and Synthroid (hypothyroidism).  Here we detail the top 10 searches conducted in June by drug category (Chart 1), and the top 20 searches by drug name (Chart 2).

 

AARP Tool Will Help Seniors Avoid the Medicare Part D Doughnut Hole

The AARP Doughnut Hole Calculator launched today, giving seniors another way to access and calculate the most cost-efficient options for purchasing their prescription drugs.  The goal, ultimately, is to avoid the dreaded “doughnut hole,” Medicare Part D’s coverage gap where beneficiaries are responsible for the full cost of their prescription drugs before the drug plan once again starts picking up the bill.

DestinationRx is powering the calculator as part of a special arrangement between AARP and CMS, using the same data accessed by the Medicare Prescription Drug Plan Finder.  Where the Plan Finder tool is designed to help beneficiaries pick the best plan, the user interface of the AARP Doughnut Hole Calculator is designed to help beneficiaries optimize the benefits of their current Part D plan.

We have studied the impact of such optimization of drug costs on seniors enrolled in Part D, with positive results: our most recent report, which covered the top five health plans in one particular zip code, showed that the average Part D enrollee with osteoarthritis, GERD, high cholesterol, and hypertension could save an average of 88%, or $4,461.36 annually – and avoid the doughnut hole entirely – when following a DestinationRx-optimized drug regimen.  Download the full text version of the 2008 Doughnut Hole Study.

 
~ Jim Yocum, DestinationRx

PhRMA/Baucus Deal: Benefits Beyond Cost Savings for Seniors in the Medicare Part D Doughnut Hole

We’ve been working to run some numbers to calculate the impact of the PhRMA /Baucus deal announced over the weekend, which aims to cut in half the cost of brand-name drugs for seniors in the Medicare Part D “doughnut hole” coverage gap.  A preliminary analysis suggests that the average senior entering the gap will save about a thousand dollars a year.  The analysis does not consider any means testing that might be applied.  There are obvious benefits for seniors in terms of immediate cost, but it may also end up being an excellent trade-off for branded drug manufacturers: the self-rationing that seniors engage in during the doughnut hole is much more heavily weighted to branded drugs, and once a drug therapy is interrupted, a significant majority of patients do not resume that therapy while another segment switches to generic alternative therapies.  The discount applied via the PhRMA/Baucus plan will keep those seniors on their regimens and reduce the self-rationing and substitution behavior that could hurt the manufacturers long-term.  This will become even more important as large numbers of baby boomers on branded medicines transition to Medicare Part D plans in the next few years.  We’ll be posting more details soon. 

 ~ Jim Yocum, DestinationRx