Employers Lose Productivity by Underfunding Health Plan Prescription Drugs for RA

Christine Miller Health Guide
  • I saw an interesting article in the NY Times online on June 26th discussing new study showing that employers who shift too much of prescription drug costs to employees end up losing more money through lost productivity than what they would have spent on the drugs. The three-year study was conducted by the nonprofit Integrated Benefits Institute (a nonprofit supported by insurers, drug companies and employers).

    The three-year study looked at the medical histories of several thousand workers with rheumatoid arthritis, working for 17 companies. The 17 companies were not identified. Among these companies, they found that more than half of the employees with RA were not taking their medications, often because the out-of-pocket expenses were too high. The workers co-payments averaged about $26 for a 30-day supply of medication.
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    The researchers determined that the 17 companies had over $17 million in costs from lost productivity, 26% more than the estimate of what they would have spent if the workers had taken their arthritis medications. They also found that employees who take medication for arthritis are less likely to file short-term disability claims (one week-six months). The results also reinforced the theory that people have a pretty low threshold for the amount of co-payments and out of pocket costs they are willing to pay before they begin to forgo medications. Similar studies focusing on other conditions and diseases, such as asthma, diabetes, and cardiovascular problems have had comparable results. They all reinforce the idea that when co-payments go up, medication use goes down, and both employers and employees lose in pay and productivity.

    The New York Times article also noted that large employers are beginning to take a big picture approach by considering productivity measures in their overall cost calculations for health care spending. Some companies are beginning to mine employee health records and claims data, trying to identify diseases of concern through patterns of lost productivity. The article lists Cisco Systems as an example. Cisco identified musculoskeletal problems and depression as conditions affecting worker productivity. The employees were encouraged to seek advice from health coaches or to seek other treatment.

    I am encouraged by the study results and the fact that more companies seem to be getting the big picture related to health care co-payments and drug utilization. Hopefully someone with my employer will see this and remember it the next time they negotiate with all of the health insurance companies in our employee benefits plan. However, the fact that individual companies are mining health records and "encouraging" employees to seek treatment scares me a little. I would hope that employers are vigilant about health information privacy and careful not to cross the line into discrimination based on health conditions.
Published On: July 09, 2007