A new survey indicates employers are watching their employees' healthcare spending in an effort to hold down rising healthcare costs.
Survey results released Monday by Mercer indicate employers are exploring new ways to improve compliance with regimens prescribed for employees - for example, by actively encouraging members to use generic drugs and mail-order plans.
The study by Mercer, a New York-based consulting company, also found that companies are looking at using innovative techniques to improve drug therapy compliance as a way to control total health plan spending.
"Employers and their pharmacy benefit managers have made significant changes, such as moving from an open formulary to a tiered structure, or increasing the percentage of drug expenditures paid by members," said Lisa Zeitel, senior consultant and co-leader of Mercer's managed pharmacy business.
"Our survey indicates that many employers have achieved as high a level of member cost-share as they deem appropriate - for now - and are exploring other ways to manage costs," she added. "This presents new challenges, especially in the management of highly expensive specialty drugs."
Mercer's study said prescription drug benefit costs rose 9.3 percent among large employers in 2007, while overall medical costs rose 5.1 percent.
Most employers use tiered copayments for prescription drug benefits. The most common arrangement is a three-tiered arrangement, where the insured pays increasingly larger copayments for generic, formulary brand-name and non-formulary brand-name drugs. Large employers are even moving to plans with four and five tiers, Mercer said.
More than a fifth of all large employers, and nearly half of those with 20,000 or more employees, require co-insurance for one or more drug categories, which serves to increase consumers' stakes in shopping for and getting involved in monitoring healthcare expenditures.
Employers feel the use of generic drugs provides an opportunity to lower costs. To encourage the use of generics, some employers are requiring members to pay the difference in cost between a brand-name drug and a generic, in addition to the generic copay. About three-quarters of employers have such policies in place, and others plan to add them in the next two years.
A growing number of respondents - 45 percent in 2007 versus 34 percent in 2005 - say they have recently reviewed plan benefits and limits for specialty or biotech drugs. This trend is more prominent among larger employers
"Since there is such a large number of specialty products in the pipelines of drug manufacturers, employers are very concerned with how to manage this high-cost and rapidly expanding area of pharmaceuticals," said Peter Wickersham, senior consultant in Mercer's managed pharmacy business.
A newer trend among employers, that of providing financial incentives for members who maintain high levels of drug compliance, is being used by only a limited number of employers. And a smaller percentage of employers now waive or reduce copays for specific classes of drugs contingent on the member participating in a related disease management program.