According to a report by the Kaiser Family Foundation, prescription drug spending has been one of the fastest growing components of national health care expenditures, increasing at double-digit rates over the past decade.
To combat these skyrocketing costs, benefit professionals and self-funded group plans are continually searching for ways to maximize savings for both the plan and its members. It is becoming even more of a priority now as a result of the down economy.
An increasingly popular program offered by pharmacy benefit managers and health plans is tablet splitting, which can be effective in managing costs and increasing cost-effective prescription benefit usage.
The concept of tablet splitting is very simple. It allows members to get medications at a higher dosage and split the tablets in half, saving both plan dollars and member out-of-pocket expenses.
There are several critical components to implementing a successful program. The employer, PBM, prescribing physician and patient each must do their part for tablet splitting to be effective.
Plan design
Tablet splitting is easy to implement with percentage copay plans, as the savings are a built-in feature. With certain plan designs, however, special programming by the PBM may be needed to adjudicate tablet splitting claims with a reduced copay.
Qualifying medications
Not all medications are safe to split, so a defined list of medications appropriate for splitting is a very important part of any tablet splitting program. The list should be developed by a PBM's pharmacy and therapeutics committee, which consists of a team of expert pharmacists, physicians and medical professionals. They make the selections according to specific criteria, which may include medications that are:
- Directed for a once-daily dosage schedule.
- Not dependent on a limited therapeutic range.
- Flat-priced or nearly flat-priced to present an opportunity for savings.
- Not delivered by an extended release system.
- Not enteric coated or of a special formulation that would be damaged.
Ensuring proper dosages
For tablet splitting, the dosing indication on the prescription will likely need to reflect "take one-half tablet daily." This helps physicians make sure patients have a clear and concise understanding of how to correctly take their medications in compliance with the new dosage indication.
The new dosage indication may also be necessary for the pharmacy and PBM to process the prescription claim appropriately for members to save money with tablet splitting. This is especially true for plans with flat-dollar copayments.
The importance of employer involvement Communication is another key to a successful tablet splitting program. Plan sponsors should actively promote the program among members to increase awareness and participation. They can partner with their PBM to help members gain a better understanding of tablet splitting.
Quality PBMs offer standard communications pieces, such as brochures, payroll stuffers, electronic newsletters, presentations, Web sites, Webcasts and member portals, ready for use by plan sponsors.
The patient's role
Patients also need to be proactive. When a decision is made to split tablets, it is their responsibility to initiate the tablet splitting process by seeking a new prescription for the revised dosage from his or her doctor.
Tablet splitting in action
Innoviant, a prescription solutions company, offers a tablet splitting program called Half Tab Rx. The following snapshot demonstrates current utilization and projected savings from the 12 medications approved for the Half Tab Rx program. In this example, the plan has a flat-dollar copayment structure and approximately 3,400 members.
Without Half Tab Rx, the plan and its members cumulatively spend nearly $160,000 annually in prescription costs - approximately $120,000 by the plan sponsor and $40,000 by members.
With Half Tab Rx, the same plan and its members may save more than $20,000 in annual prescription costs based on 25% of members using Half Tab Rx. This equals an approximate savings of $15,000 for the plan sponsor and $5,000 for members.
Actual savings will vary based on individual plan design and member compliance, but tablet splitting programs already are creating savings for plans and their members.
As benefit professionals and self-funded plan groups partner with PBMs to implement tablet splitting programs, everyone has a role in making sure it succeeds. From the plan sponsors and PBMs to the physicians and members themselves, everyone plays a critical part in making these programs successful and ensuring the path to true bottom line savings.
That’s the word following the release of a new study from the Economic Policy Institute. The research says that a “play or pay” mandate, as is included in both House and Senate health care reform proposals, would cause fewer job losses than originally speculated and health care reform in general would create more job openings.
Despite these findings, many still insist that such a mandate would have grave consequences for companies and those they employ.
The nonprofit and nonpartisan think tank released the study in the midst of strong debate over an employer mandate, with many arguing that such a mandate would cause massive job losses. The report’s author, Phillip Cryan, who wrote the report as a Masters thesis in Public Policy at the University of California-Berkeley, disagrees, citing that not only are these concerns over job losses “overstated and unfounded,” but a health care reform package that includes a “play or pay” mandate would on the whole cause a “significant boost to employment,” he states in the study.
According to Cryan, prior studies that predicted much higher unemployment rates used widely different parameters, with some measuring the effects of a 40% tax on payroll. In what Cryan presents as the worst-case scenario with an 8% payroll tax (on the steep end of the 4% to 8% range proffered by policymakers), 166,095 jobs would be lost or 0.1% of employees would be put out of work.
“I think that many of the people who are making those claims of huge job losses from a ‘play or pay’ policy are motivated more by their political opposition to the president’s reform package than by a careful look at that prediction,” says Cryan.
Other findings, which use other baselines, put the job toll much higher. In a study for the National Bureau of Economic Research, Katherine Baicker, a professor of health economics at the Harvard School of Public Health predicts that 0.2% of full-time workers and 1.4% of uninsured full-time workers would lose their jobs due to a health insurance mandate. However, she assumes that employers would be mandated to pay 80% of the premiums for their employees, a proposal that was floated in the health care debate during the early ‘90s. As far as Cryan is aware, no other study takes into account the 4% to 8% payroll tax range.
“For this kind of predictive analysis, there’s always going to be a range of reasonable predictions because there are a lot of assumptions that you build into the methodology of that kind of study,” he explains. “The entire range of reasonable assumptions for the effect on employment of a ‘play or pay’ policy adopted, hypothetically, in isolation goes from small positive to small negative. Even in the worst-case scenario that small negative effect is likely to be vastly outweighed by the positive effects of health care reform [in its broadest sense].”
Others argue that Cryan’s own parameters miss the point by measuring the entire employment base instead of narrowly examining those that would be hit hardest: small businesses who tend to not offer employer-covered health care and lower income workers.
“There are plenty of problems with an employer mandate: it isn’t free and it will have some unemployment effects, the [EPI paper] doesn’t dent that in any way,” says Tom Miller, resident fellow American Enterprise Institute for Public Policy Research. “There are a lot of heroic assumptions in there that don’t stand up, in addition to which, the other components of employer-based opposition to a mandate goes beyond whether they will have to cut payroll, but actually whether they will lose control with their benefit structure.”
Perhaps this speaks to why Wal-Mart stated in a June 30 letter to President Barack Obama that they would support a ‘play or pay’ employer mandate; they feel they can’t stop the mandated fee, but they may be able to curb the mandated restrictions and regulations.
“We are for shared responsibility. Not every business can make the same contribution, but everyone must make some contribution. We are for an employer mandate which is fair and broad in its coverage, but any alternative to an employer mandate should not create barriers to hiring entry level employees,” wrote Mike Duke, Wal-Mart president and CEO, along with Andrew Stern, president of Service Employees International Union and John Podesta, president and CEO of liberal think tank Center for American Progress.
Regardless, Cryan thinks that it “sends a clear signal to other employers” to shoulder the responsibility of providing universal health care. He recommends that all employers “sit back for a minute and think through the likely effects on productivity and retention associated with everyone having secure access to quality health care.”
Wal-Mart’s announcement may be testament to the strong political steam behind the mandate proposal or perhaps the company is merely being prudent by jumping on the moving train before it reaches the station in the hopes of having some influence over the train’s cargo. Either way, there is much at stake in not only whether there is an employer mandate, but also what form it takes. Those watching the debate would be wise to understand both where different researchers end up in their estimation of the impact of ‘pay or play,’ as well as understanding how they got there.
Senate lawmakers are considering tax credits for sponsors offering employee wellness programs, in part to deter employers from curbing health benefits in a post-reform environment.
Currently House and Senate leaders are furiously working on a handful of bills in hopes of finding viable measures that can garner enough votes for approval. Key sticking points remain the cost of reform – in the area of $1 trillion – and the possibility of a government-run public health plan option. Some key Democrats are pushing hard for a government plan to keep private insurers honest, but others favor a more moderate approach such as purchasing cooperatives operated by members.
Some analysts predict a government-run plan would prompt employers to cut health insurance programs, even if it meant they would have to pay a fee for not playing. That’s why members of the Senate Finance Committee inserted a provision designed to hold the line on employer investments in wellness programs.
Under current tax code, costs for an employer-provided wellness program for employees are deductible by the sponsor as a business expense. Under the proposed option, a tax credit would be allowed for 50% of the costs paid by an employer for providing a “qualified wellness program” during a taxable year. The amount of the credit would be limited to an amount not exceeding $200 for each employee not exceeding 200 employees, plus $100 for each additional employee in excess of 200 employees.
Only employees generally working more than 25 hours per week are taken into account. For purposes of the credit, any amount paid for food or health insurance could not be included as a cost of the wellness program. The credit would not be refundable and would not be paid in advance and would be available for a maximum of five years.
To claim the tax credit for eligible expenditures, an employer would be required to obtain a certification by the Secretary of Health and Human Services, in coordination with the Director of the Centers for Disease Control and Prevention, and the Secretary of the Treasury, that its program meets the definition of a qualified wellness program. Reports indicate that Senators would also like to give CDC money to serve as a resource for employers, to help them create and standardize wellness programs.
In order for a program to be a qualified wellness program under the proposal, all employees would be required to be eligible to participate in the program. Further, under the proposal, a qualified wellness program includes four components: health awareness (such as health education, preventive screenings and health risk assessment); employee engagement (such as mechanisms to encourage employee participation); behavioral change (elements proven to help alter unhealthy lifestyles such as counseling, seminars, on-line programs, self help materials); and a supportive environment (such as creating on-site polices that encourage healthy lifestyles, eating, physical activity and mental health).
For an employer with 500 or more employees, to be a qualified wellness program, a program would be required to include all four components. For an employer with less than 500 employees, to be a qualified wellness program, a program would only be required to include at least three of the four components. In addition, to be a qualified wellness program under the proposal, the program would be required to be consistent with evidence-based research and best practices, as determine by the Secretary, such as research and practices described in the Guide to Community Preventive Services and Guide to Clinical Preventive Services and the National Registry for Effective Programs.
Options such as the wellness tax credits could emerge as important bargaining points as lawmakers continue to seek compromises and agreement on an omnibus package they might send to President Obama this fall.
