Employers who invest in healthcare benefits to keep their employees healthy, happy, and productive are undermined when health insurers force employees to switch prescription medications mid-treatment to save money. In many cases, this "non-medical switching" not only creates treatment complications and ends up increasing healthcare expenses, it generates substantial costs for employers, who suffer lost productivity and added workplace stress.
Health insurers have direct and indirect ways of compelling employees to switch medications. Directly, insurers can enact "therapeutic substitution" policies that direct a pharmacist to substitute a cheaper drug in the same therapeutic class — but with a different chemical structure — for the medication the doctor has prescribed. Indirectly, insurance companies can change a health plan's formulary to reduce coverage for a prescribed drug, making it too expensive for many patients, who are forced to switch to cheaper alternatives.
Insurers that make formulary changes in the middle of a coverage period impose sudden and significant out-of-pocket costs for employees, especially those living with chronic conditions. Many have little choice but to switch medications. A survey conducted by Global Healthy Living Foundation of Floridians whose insurers changed their formularies mid-treatment, found that nearly three-fourths (74 percent) of respondents with chronic conditions could not afford the increased out-of-pocket costs and were forced to switch to cheaper medications. Of those, 61 percent had to try multiple drugs before finding a suitable replacement.
Whether direct or indirect, non-medical switching can exact a heavy price from employees. Drugs used to treat the same symptoms can have vastly different ingredients and chemical structures, which may trigger adverse reactions, requiring trips to the emergency room or additional visits to the doctor. Over three-quarters (77 percent) of the Florida survey respondents, for example, reported side-effects from switching to new medications.
By interrupting an employee's course of treatment (often, multiple times), non-medical switching also can severely reduce treatment effectiveness. A recent study by the Alliance for Patient Access of Medicare patients on intravenous drug treatments found that those who switched medications once were more likely to have their treatment course interrupted again within two years.
Even when alternative medications have similar components, cheaper drug formulations can have subtle variations or can introduce minor impurities that render them less effective, according to an analysis in the British Journal of Clinical Pharmacology. Less effective treatments compromise employee health and increase the lifetime cost of their healthcare.
Patients that do not adhere to a course of treatment risk their disease progressing faster or their symptoms relapsing, which adds to treatment costs. Patients with Crohn's disease, for example, can experience a loss of effectiveness within a year of switching treatments. A single switch between equivalent medications can trigger breakthrough seizures in epileptics. One study of rheumatoid arthritis patients who had to switch medications documented a 42 percent increase in emergency room trips and a 12 percent increase in outpatient visits.
Nonadherence to treatment regimens costs the U.S. healthcare system $100 billion annually. The cost to employers is just as astounding, including an estimated $50 billion in lost productivity each year.
Employers pay even more, once you factor in the cost of sick leave or paid time off for workers too ill to contribute to business output. Employees out sick or seeing healthcare providers miss valuable on-the-job learning. They also place greater demands on the productivity of co-workers who have to pick up the slack, which reduces employee morale and contributes to workplace stress. Not only does the added pressure cost employers through increased absenteeism and faster employee turnover, ironically, the additional stress can trigger its own health problems — like hypertension, cardiovascular disease, and depression — which undermine an employer's reasons for investing in healthcare benefits in the first place.
Over the long term, non-medical switching does not save money for insurance providers, and any short-term savings come at the expense of employers' investments in the health and well-being of their employees. Moreover, switching robs businesses of valuable output and squeezes existing human resources to capacity. Employers that want to recoup these losses need to address non-medical switching whenever they purchase health insurance or negotiate coverage contracts.
Stacey L. Worthy, Esq. is the Executive Director of the Alliance for the Adoption of Innovations in Medicine (Aimed Alliance).
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