The Lynx Group

Benefit Design and Coverage Trends Abstract

April 2014, Vol 5, No 3
Jayson Slotnik, JD, MPH
Managing Partner
Health Policy Strategies, Inc.
Bethesda, MD

Benefit Design Trends and Value-Based Oncology Coverage Related Findings from the 2013 National Employer Survey
FR Vogenberg, C Larson, M Rehayem, and L Boress

Background: Aside from healthcare reform, healthcare costs are a continued concern among employers and other purchasers that extend to biologics/oncolytics that are being increasingly scrutinized to demonstrate value over time. A significant cost challenge to employers, these drugs create logistical issues for patients, physicians, pharmacies, and manufacturers owing to their unique approval requirements, dosing, side effects, and distribution methods. Costs of biologics continue to be hard to track as they show up in both medical as well as pharmacy benefit claims.

Objective: To assess the change in level of benefit design, knowledge and communication gaps of employer plan sponsors in the area of specialty pharmacy (SP) and biologic products for conditions such as cancer, rare and immune disorders, and to identify opportunities for future benefit coverage innovation.

Methods: An online survey instrument was developed through an advisory council comprising self-funded employers in late fall 2013. The survey was disseminated through 25 business coalitions across the U.S. during 4Q2013 for completion by February 2014. Results were then analyzed by the Midwest Business Group on Health (MBGH, Chicago, IL) and the Institute for Integrated Healthcare (IIH, Greenville, SC).

Results: The 85 self-funded employers of varying size and representative SIC types completed the survey. Multi-year results for the 2014 report derived from 2011-2013 survey trends indicated that there is a continuing knowledge gap about SP; and employer and senior leadership level understanding of SP. Similar to 2012, the 2013 results showed that many did not know whether their company’s claim costs for specialty drugs had increased along with a lack of priority for action. Again in 2013, most employers are using primarily traditional benefit designs (e.g., tiered formularies, copay, and coinsurance) and not using first fill options instead of innovative benefit designs (i.e. value-based) that may be more appropriate for oncology/SP. Vendor performance continues to be highly valued yet the benefit designs continue to omit incentives to ensure aligned benefit designs for compliance to medication therapy or adherence to treatment. The growth of HDHPs is another example of the growing trend in cost sharing among employers.

Conclusion: There remain knowledge gaps and benefit design innovation opportunities lost among commercial plan sponsors that are important to those who manage oncology services or risk. 2013 survey findings demonstrate employers’ relatively low knowledge of SP drug design implications, appropriate support technologies and vendor contracting options available in their plan. Employers who improve their understanding of the many challenges in managing this area will be able to more effectively manage costs and drive better patient outcomes to meet their business objectives.

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