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Perspectives on High Deductible Health Plan Strategy

Posted by Matt Breese on Dec 20, 2016

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In recent years, the adoption of high-deductible health plans (HDHPs) is on the rise. HDHPs allow employers to control rising healthcare costs by shifting costs to the employees. In the pharmaceutical industry, the utilization of drugs stays relatively the same for major chronic areas, even when drug cost-sharing is limited. However, this is not always the case with more expensive and highly managed drugs.

Manufacturers need to understand this driver of change in payer/PBM coverage in order to determine where and when to contract with payer/PBM controlled HDHPs.

What are HDHPs?

High-deductible health plans offer lower monthly premiums in exchange for larger costs at the time of care. According to The Mercury News, “While employees may see less coming out of their paychecks, they’re on the hook for more out-of-pocket costs before their insurance coverage kicks in.”

Many healthcare professionals have expressed concern about the long-term impact of these policies, which place more of the financial burden on patients. For example, “Patients may be forgoing important care and potentially costing the health care system more in the long run,” according to Health Affairs.

When Are High Deductible Health Plans Beneficial?

Despite long-term concerns, many companies are shifting to high-deductible health plans to reduce their current spending. These plans are not always beneficial to the employees.

For young and healthy employees, high-deductive health plans with low monthly payments are cost-effective. When individuals are not taking prescription medications and rarely visit the doctor, having the larger paycheck each month is more valuable than having a traditional health plan.

In contrast, consider the example of Tessa Mandy, described in The Mercury News“Her 12-year-old son Jack has Type 1 diabetes... As a result, he requires more visits to the doctor, not to mention his insulin pump, blood-test strips, back-up syringes and other related supplies.” For individuals like Mandy, a higher-premium plan with a lower deductible and lower co-pays and is the most cost-effective option.

Drug Pricing Trends

A 2014 report by Optum revealed that when a group of employees received several choices for health plans including both non-high-deductible plans and high-deductible plans, the average out-of-pocket drug costs (OOP) per patient increased significantly.

In fact, “The average OOP drug costs per patient for the Choice treatment group jumped more than $70 (nearly 32 percent from $232 to $306) from the year before they switched to a high-deductible CDHP to the two years after they switched,” reports Optum.

Staying Ahead of Trends for Payer Contracting 

MMIT Network stays up-to-date on significant coverage shifts such as the adoption of HDHPs. MMIT helps pharma companies hedge their risks by offering data and recommendations for optimal payer contracting based on plan make-up and coverage change monitoring.


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Topics: Industry Trends, Market Access