Issue Area - Drawbacks of Component Management
Component Management Fails to Save Health Care System Costs: The Case of Restrictive Formularies, Second Edition, 2000
This 81-page monograph updates and extends the information first compiled in 1996. The monograph reviews the literature through mid-1999 on the effects of restrictive formularies, caps, copays and prior authorization on total costs and treatment outcomes. Taken together, the reviewed literature makes the overwhelming case that such policies are likely to have unintended negative consequences. Fact sheet available.
Formulary Limitations and the Elderly: Results from the Managed Care Outcomes Project, by Susan Horn, PhD, et al., The American Journal of Managed Care, Vol. 4, No. 8, 1998
Evidence is presented that the elderly are at particular risk from formulary restrictions, an important issue as more Medicaid and Medicare patients enroll in managed care. This 1998 article by Horn shows that selecting less expensive drugs may lead to greater side effects in the elderly.
Formulary Restriction of Selective Serotonin Reuptake Inhibitors for Depression: Potential Pitfalls, by Paula L. Hensley and H. George Nurnberg, PharmacoEconomics, Vol. 19, No. 10, 2001
Psychotropic drugs and their associated costs can be a limiting factor in mental health treatment coverage. As a result, restrictive formularies are a common method of attempting to limit costs. This paper explores the intended and unintended consequences of having a single or exclusive selective serotonin reuptake inhibitor (SSRI) on a formulary and concludes that the practice of having a single SSRI on the formulary for a health care plan seems ill founded. Giving the primary care physician several antidepressant choices can provide more options to continue treatment of his or her patient in the less expensive
primary care setting. In terms of cost containment, formulary restrictions are far more likely to have the opposite effect.
Fraction of Nursing Home Admissions Attributable to Urinary Incontinence, by Alan Morrison, PhD, Richard Levy, PhD, Value in Health, Vol. 9, No. 4, July/August 2006
This brief article calculates the proportion of nursing home admissions of the elderly attributable to urinary incontinence (UI) and finds that estimates of the fraction of nursing home admissions attributable to UI exceed those previously assumed and show an imbalance between the sexes. Policies that support reimbursement for treatments of UI in the community might help prevent or delay institutionalization and offset some of the costs.
The Impact of Tiered Co-Pays: A Survey of Patients and Pharmacists, 2003
Employers increasingly have adopted strategies to reduce prescription drug expenditures, including cost-sharing arrangements that require employees to pay a greater share of the costs. In 2002, approximately 57% of people with employer-sponsored health benefits were enrolled in multi-tier co-pay plans. The growing use of tiered benefit plans and increasing co-pay levels has prompted concern that higher co-pays may lead patients, particularly those with chronic illnesses, to reduce prescription drug compliance and,
consequently, experience negative health outcomes that result in increased utilization of other health care services. To view the study instruments, click here.
Intended and Unintended Consequences of HMO Cost Containment Strategies: Results from the Managed Care Outcomes Project, by Susan D. Horn, PhD, et al., The American Journal of Managed Care, Vol. 2, No. 3,
1996
Contrary to common assumptions, greater formulary restrictions may result in decreased quality of patient care, increased use of services and higher medical costs. This 1996 study by Susan Horn, PhD, disputed widely held beliefs that formularies reduce pharmaceutical and overall health care costs.
State Medicaid Program Issues: Preferred Drug Lists, 2003
This issue brief identifies issues, requirements and considerations relating to preferred drug lists (PDLs). Developed for state audiences, the brief addresses policy, operational and procedural issues; federal provisions for patient protection; specific case studies; provisions of the Florida Medicaid patient suit settlement agreement; evaluation methodologies; and principles
to consider.
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