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. 2017 Feb;55(2):191-198.
doi: 10.1097/MLR.0000000000000630.

Impact of a Value-based Formulary on Medication Utilization, Health Services Utilization, and Expenditures

Kai Yeung  1 , Anirban Basu, Ryan N Hansen, John B Watkins, Sean D Sullivan
Affiliations

Impact of a Value-based Formulary on Medication Utilization, Health Services Utilization, and Expenditures

Kai Yeung et al. Med Care. 2017 Feb.

Abstract

Background: Value-based benefit design has been suggested as an effective approach to managing the high cost of pharmaceuticals in health insurance markets. Premera Blue Cross, a large regional health plan, implemented a value-based formulary (VBF) for pharmaceuticals in 2010 that explicitly used cost-effectiveness analysis (CEA) to inform medication copayments.

Objective of the study: The objective of the study was to determine the impact of the VBF.

Design: Interrupted time series of employer-sponsored plans from 2006 to 2013.

Subjects: Intervention group: 5235 beneficiaries exposed to the VBF.

Control group: 11,171 beneficiaries in plans without any changes in pharmacy benefits.

Intervention: The VBF-assigned medications with lower value (estimated by CEA) to higher copayment tiers and assigned medications with higher value to lower copayment tiers.

Measures: Primary outcome was medication expenditures from member, health plan, and member plus health plan perspectives. Secondary outcomes were medication utilization, emergency department visits, hospitalizations, office visits, and nonmedication expenditures.

Results: In the intervention group after VBF implementation, member medication expenditures increased by $2 per member per month (PMPM) [95% confidence interval (CI), $1-$3] or 9%, whereas health plan medication expenditures decreased by $10 PMPM (CI, $18-$2) or 16%, resulting in a net decrease of $8 PMPM (CI, $15-$2) or 10%, which translates to a net savings of $1.1 million. Utilization of medications moved into lower copayment tiers increased by 1.95 days' supply (CI, 1.29-2.62) or 17%. Total medication utilization, health services utilization, and nonmedication expenditures did not change.

Conclusions: Cost-sharing informed by CEA reduced overall medication expenditures without negatively impacting medication utilization, health services utilization, or nonmedication expenditures.

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Figures

Figure 1a
Figure 1a
Observed and expected medication expenditures Per Member Per Month (PMPM) in intervention (Value-Based Formulary (VBF)) and control groups combining expenditures from member and health plan perspectives
Figure 1b
Figure 1b
Observed and expected non-medication expenditures Per Member Per Month (PMPM) in intervention (Value-Based Formulary (VBF)) and control groups combining expenditures from member and health plan perspectives
Figure 1c
Figure 1c
Observed and expected overall expenditures (medication and non-medication) Per Member Per Month (PMPM) in intervention (Value-Based Formulary (VBF)) and control groups combining expenditures from member and health plan perspectives
See this image and copyright information in PMC

References

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