Approaches to Helping the Under-Insured

September 2008

Agenda

Sharing Perspectives on Helping the Under-Insured:

• A Patient

• A Co-Pay Assistance Non-Profit

• An Insurance Company

• A Physician

• A Pharmacist

• Questions?

Page 2

A Patient’s Perspective

Page 3

Judy Hodges

Breast Cancer Patient

A Patient’s Perspective

Page 4

“I sat in the oncologist’s office and kept saying, I

don’t have the money , but I’m not going to die

because I can’t pay for this. I am not going to die

because I am underinsured.”

Judy Hodges, PAN Patient

A Non-Profit Perspective

Page 5

Julie Reynes

PresidentPatient Access Network Foundation

Why Co-Payment Assistance?

Pharmacy cost trends upward exceeded all other components of medical care from 2007 - 2008.

Source: 2008 Milliman Medical Index Page 6

Why Co-Payment Assistance?

• Prescription drugs have the largest co-payments

• Prescription drug costs are estimated to continue increasing in the near term

• Physicians and hospitals have the flexibility to reduce or waive their fees for lower income patients

• If a patient can obtain the thousands of dollars it may cost to access their medications, they will be more likely to get treatment

‘We found that reductions in drug copayments increased medical adherence.’ Michael E. Chernew, Health Affairs, Jan-Feb 2008

Source: 2008 Milliman Medical IndexPage 7

Patient Access Network

Dedicated to improving access to needed health services for insured patients who cannot afford the out-of-pocket costs

associated with their treatment.

• A 501(c)(3) public charity that launched our initial assistance program in October, 2004.

• Currently supports 20 disease-state funds for oncology and chronic diseases.

• Provides co-pay assistance of from $1500 - $7500 per year for medications.

• Received favorable advisory opinion from the Office of the Inspector General (OIG) of the Department of Health and Human Services in December 2007.

• Have approved nearly 50,000 patients for cost-sharing assistance.

Page 8

The Need for Co-pay Assistance from PAN is Increasing

Demand is increasing by over

30% each year, while revenues remain stable

Source: Patient Access Network Data, 2004 - 2007Page 9

Projected2008

An Insurance Company’sPerspective

Page 10

Gary Owens

Physician and Consultant Providing the Insurance Company’s Perspective

Biotech Drugs in Development

Source: BCBSA Medical Cost Trend Report 2007

Biotech Drugs as a Growth Area

Sources: CMS National Healthcare Expenditure Projection 2003-2013

Biotech Drugs as a Growth Area

Biotech Drug Spending

What Does This Mean to a Plan?

• In 2007 Specialty Pharmacy spend was approximately 11.4% of total pharmacy spend (and was over 1/3 of the total trend driver)

• The year over year specialty trend was 12.3%

• Unit cost was responsible for 8.4% with utilization making up the other 3.9%

• Top three categories of specialty drug spending:– Autoimmune diseases (Rheumatoid arthritis, Psoriasis, Lupus)

– Cancer

– Multiple sclerosis

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Biotech Drugs and the Health Plan

• Health plans recognize that new drugs and new uses of existing drugs are creating revolutionary treatment advances.

• Coverage of drugs is essential and important for any health benefit plan.

• Purchasers are looking to plans to manage costs or pass excess cost on to the consumer

• Balancing the need of the purchaser with the needs of the consumer is difficult

• Not creating access problems for members is important.

• But so is keeping the plans affordable.

Disease Specific Examples of Drug Cost

Chronic Condition Medication Examples Estimated Cost/year

Hepatitis C Pegasys, Peg-Intron, Infergen $30,000

Multiple Sclerosis Betaseron, Avonex, Copaxone $12,000-$15000

Breast Cancer Docetaxel, Adriamycin, Herceptin, Tykerb

$12,000-$50,000

Non-Small Cell Lung Cancer

Docetaxel, Carboplatin, Avastin $20,000-$60,000

Rheumatoid Arthritis

Enbrel, Remicaid, Humira, Kineret, Rituxan

$15,000-$20,000

Pulmonary Hypertension

Flolan, Tracleer, Remodulen $65,000-$100,000

Guacher’s Disease Cerezume, Zavesca $150,000-$250,000

15Sources: 2008 Medco Drug Trend Report, Specialty Pharmacy News, October 2006

The Issues for Plans

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• As cost of therapy increase, the cost of providing care also increases

• With purchasers pressure on controlling costs, plans have looked for new ways to involve patients in the management of costs.

• However increasing co-payments and moving drugs to co-insurance tiers have brought about access issues for some patients

• Plans increasingly look to external resources to assist members get access to care

Plan Assistance to Members

• Plans provide case managers to work with patients

• These case managers can do any or all of the following:– Educate members about the medication and the need for

compliance

– Help the patient access benefits in the most cost effective way

– Help the patient discuss treatment options with their physicians and perhaps find less costly, yet clinically effective treatments

– Help the patients locate sources of financial assistance

– Inform physicians of plan benefits and options for members.

• Remember, we are all in this together and the goal of patients, physicians and plans is to provide access to high quality, yet affordable care.

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A Physician’s Perspective

Page 18

Allan B. Goldstein, MD

Physician and Consultant

The Problem of Financial Barriers

Page 19

Office Visit Co-Pay• $30 – 50 out-of-pocket for each office visit• For weekly visits, $120-200 per month, $1,500-2,600 per yr

Oral Medication Co-Pay• Higher co-pay for brand (tier 2) and non-preferred (tier 3) meds

Parenteral Biologics• Increasingly subject to 20% co-insurance (tier 4)• Yearly costs for biologics may reach $100,000 or more• Co-insurance may be $20,000+ per year

Medicare Prescription Drug Coverage (Part D)

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• Premium: $0-100+ per month

• Deductible: $275 per year

• Coinsurance: $559 (25% of first $2,510)

• “Donut Hole”: $3,216 (no coverage $2,510 to $5,726)

• Total Out-of-Pocket $4,050 excludes monthly premium

• “Catastrophic” Coverage: patient pays 5% of any

expenses over $5,726

Total Out-of-Pocket = Lots!

The Scope of the Problem

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Endocrinology

Gastroenterology

Hematology

Neurology

Oncology

Pediatrics

Pulmonology

Rheumatology

Some Specialties Impacted:

The Scope of the Problem

Page 22

AnemiaBreast CancerColorectal CancerCutaneous T-Cell LymphomaLung CancerMultiple MyelomaMyelodysplastic SyndromeNon-Hodgkin’s LymphomaPancreatic Cancer

Some Diagnoses Impacted:

Rheumatoid ArthritisPsoriatic ArthritisAnkylosing SpondylitisCrohn’s DiseaseCystic FibrosisMultiple SclerosisGaucher’s diseaseGrowth Hormone Deficiency

Physician Responses

Page 23

• Absorb the co-pay

• Collect the co-pay up front

• Refer to hospital or clinic

• Stop providing infusion services in the office

• Employ sub-optimal treatment regimen

• Hire staff to conduct financial evaluation

• Identify and counsel patients unable to meet out-

of-pocket requirements

Consequences for Patients

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• Disruption of the patient/physician relationship

• Increased travel and inconvenience

• Financial stress or distress

• Failure to take medications

• Sub-optimal treatment

• Clinical deterioration and/or disease process progression

The underinsurance challenges may negatively impact the patient’s health.

A Pharmacist’s Perspective

Page 25

Edith Rosato, PharmD

Senior Vice President, Pharmacy Affairs and National Association of Chain Drug Stores

Foundation

National Spending on HealthcareCost increases for hospital outpatient services and prescription drugs continue to outpace those for inpatient and physician services.

Annual Per Capita Percentage Change in Health Care Spending, by Category of Service, 2001-2006

Source: Bradley C. Strunk, Paul B. Ginsburg, and John P. Cookson. "Tracking Health Care Costs: Declining Growth Trend Pauses In 2004." Health Affairs Web Exclusive, June 21, 2005; and Ginsburg,

Paul B., Bradley C. Strunk, Michelle I. Banker, and John P. Cookson. "Tracking Health Care Costs: Continued Stability But At High Rates In 2005." Health Affairs Web Exclusive, Oct. 3, 2006.

The Underinsured: Coping With Rising Prescription Drug Costs

• Represent 25M in 2007 and rising

• 72M or 41% of working-age adults have problems paying medical bills– 29% unable to pay for basic necessities– 39% use savings– 30% take on credit card debt

• 46% skimp on medications

• 33% compared to 19% of adequately insured used ER

• The uninsured population compounds this issue

Sources: The Commonwealth Fund, Biennial Health Insurance Surveys, August 2008

The Current State of Medication Adherence in the U.S.

• Estimated annual costs to the healthcare system: $177B

• Only 50% of patients take medications as prescribed

• Reasons for non-compliance:– Cost– Forgetfulness– Denial of the illness– Misunderstanding of the directions– Lack of understanding of the disease– Lack of symptoms

• Impact of chronic disease: – 130M patients (45% of population); 7-10 deaths annually– $1.3 Trillion annual drag on economy – Represents 91% of all prescriptions filled

The Result is a Significant Public Health Crisis

Sources: National Council on Patient Information and Education, “Enhancing Prescription Medicine Adherence: A National Action Plan”. August 2007

Community Pharmacy Response• Many chains have introduced prescription savings

programs to assist the uninsured or underinsured

• Covers prescription brand and generic drugs, preventative and lifestyle drugs, vision, dental and hearing…even pet meds

Other Discounted Drug Programs and Financial Assistance Programs

HealthCare Club of America

Retail Clinics• Health and wellness destination• Offers affordable healthcare• One-stop shopping convenience

Government Programs

• Health Resource Services Administration 340B Program– Safety Net Clinics

• Medicare Part D: Covering the “donut hole” patients

• SCHIP: America’s Promise Alliance and All Kids Covered

Healthcare Reform Debate: Opportunity to Advocate for Patients

• High quality, affordable and accessible healthcare coverage should be the goal of any reform proposal

• Cost-sharing, such as patient co-pays, should be set at affordable levels and not prevent patients from seeking appropriate medical care

• Patients should have access to the most cost-effective medication to treat their condition

• Lower cost, equally effective generic medications should be encouraged

• Preventative services such as medication therapy management should be encouraged

Role of the Pharmacist

• Convenient, highly accessible community based health resource for patients

• Pharmacists are knowledgeable about available programs for uninsured and underinsured patients

• Encourage patients to utilize and interact with their pharmacists

Conclusions

Page 35

• Patients are making life or death decisions based on their ability to pay for healthcare• Each healthcare component is trying to help in its own way• Medication costs are a large component of the challenge.• Each healthcare component has constraints imposed by the government, stockholders, funding, etc.• Many challenges remain• Healthcare reform is likely to create new challenges

Questions?