CHICAGO -- After years of raising co-payments and deductibles for prescription pharmaceuticals, some employers are taking an unorthodox approach to lowering health care costs in an experimental program by - get this - paying for diabetes drugs and consultations.
For patients the savings could amount to $2,000 a year.
If the program proves successful it could be expanded to include other common diseases and chronic conditions such as asthma, depression or arthritis and extended beyond its one-year pilot phase, according to the Midwest Business Group on Health, a Chicago-based coalition of employers that is coordinating the program.
Nationally, more than 30 employer groups are rolling out similar programs this year in cities including Milwaukee, Pittsburgh and Los Angeles.
Results from a model project launched in 1997 by the city of Asheville, N.C., show a 50 percent reduction in sick days and no worker's compensation claims filed by the diabetes patients in the program between 1997 and 2003.
Asheville has expanded its program to people with asthma and high blood pressure.
"Employers are beginning to realize that cost-shifting by itself will not change behaviors," said Larry Boress, chief executive of the Midwest Business Group on Health. "This is not just an isolated incentive where you are giving away trinkets or dollars but is part of a change in employee-benefits strategy to move people away from an entitlement mentality. The idea is that in order to change employee behavior and change the attitude in the way employees manage their health, employers are moving to value-based benefit designs."
Direct and indirect costs of diabetes to the U.S. health care system are more than $130 billion a year, including emergency room visits, extended hospital stays and absenteeism, the Chicago group said, citing national studies. Some 20 million people have diabetes.
By waiving the so-called co-payment or co-insurance, employers who are part of Chicago's program are hoping that people will take better care of themselves and avoid costly hospitalizations. Inadequate treatment can lead to blindness, amputations of limbs or even death. More than 200,000 Americans die of diabetes-related complications each year.
Diabetics need greater attention partly because they usually take 7 to 12 prescriptions regularly for the disease and related conditions, and that makes compliance difficult.
"As a patient group they are one of the most highly medicated groups because they frequently have other conditions like obesity, high cholesterol and high blood pressure problems and vascular issues," said Dr. James Webster, an internist and president of the Chicago Board of Health, the governing body of the Chicago Department of Health. "It's a lot of medication to keep straight. They have to be encouraged to take their medication and know what the medication is for."
Chicago program participants, who are expected to number about 100 at the outset, will be matched up with pharmacists who will be paid undisclosed fees for private consultations.
"The pharmacist's role is to be an educator and motivator, ensuring the patient follows their physician's orders and understands how to manage and monitor their diabetes and medications," Boress said. "Studies have shown that with the treatment, education and motivation provided by this program people can dramatically improve their health while positively impacting employer health care costs."
A financial incentive for the employee coupled by close monitoring are reasons it should work, the Chicago Board of Health's Webster said.
The program differs from other employee wellness initiatives such as corporate health fairs, newsletters and e-mail reminders, which have not slowed the increase in employer-paid and worker insurance premiums.
"If this is a successful model then it can be applied to almost any condition where medication compliance is a key factor in improving someone's health and quality of life," said Midwest Business Group's Boress.
Pactiv, the maker of Hefty garbage bags, is interested in expanding the pilot program beyond Illinois. "Pactiv is making this program available to its employees enrolled in PPOs in Illinois and will consider adding additional states as the program expands," said Judy Hearn, the company's manager of health and welfare.
Such programs could be a boost to makers of diabetes drugs, who are helping to underwrite administrative costs.
British drug giant GlaxoSmithKline PLC, for example, is providing financial support to the American Pharmacists Association Foundation through a grant to underwrite costs for enrollment forms and guidelines for counseling sessions.
However, drugmakers are not able to influence the outcome of the study, pharmacists and employers involved say.
"There is no money that flows to any employer from a drugmaker," Garrett said. "The employer's commitment is to provide the waived or reduced co-pays and paying the pharmacists."
Bruce Japsen writes for the Chicago Tribune.
20.8 million Americans with diabetes (7 percent of population)
No. 6 cause of death in 2002 (73,249 deaths)
82,000 nontraumatic lower-limb amputations performed on people with diabetes, 2002
No. 1 cause of new cases of blindness in adults 20 to 74 years old
$132 billion: Estimated cost of diabetes in 2002 including medical, work loss and disability
[Source: Centers for Disease Control and Prevention]