Business Opportunities Weblog

July 5, 2007 by Rich Whittle | 2 Comments

The New York Times:

Health penny wise, medical pound foolish?

Employers that shift too much of the cost of drugs to workers in their company health plans could wind up losing more than they save, through absenteeism and lost productivity, according to a study by health policy researchers.

The three-year study, to be released today, looked at the medical histories of several thousand workers with a diagnosis of rheumatoid arthritis. The condition is a painful and incurable disease of the joints, but patients can keep it at bay by taking a special class of drugs.

The cost, as much as $18,000 a year, can be a big expense for employer health plans. Still, putting too much of the cost burden on the employee can evidently backfire.

Among the 17 employers in the study, conducted by the nonprofit Integrated Benefits Institute, more than half the workers with rheumatoid arthritis were not taking their drugs — in many cases because they considered the out-of-pocket co-payments too high.

As a result, the institute’s study found, the employers incurred $17.2 million in costs from lost productivity, 26 percent more than the estimate of what they would have spent if the workers had taken their arthritis drugs.

The workers’ co-payments were relatively low, averaging $26 for a 30-day supply, indicating a fairly low threshold before out-of-pocket costs prompted workers to forgo medication.

“This is an important study,� said Michael Chernew, a health policy economist at Harvard Medical School who was not involved in the arthritis study. “The basic message is very consistent with all the work we have done: co-pays go up, people use their medications less, and bad things happen.�

Photo by MSDesigns.

In Employees, Financing, Healthcare | 2 Comments