Zero-Dollar Drug Copays Lowered Total Chronic Disease Spending

Value-based insurance designs that incorporate zero copay programs for certain drugs may help decrease total chronic disease spending—including member and payer costs—when the designs focus on a broad set of drugs and cover multiple chronic diseases, a study published in the American Journal of Managed Care discovered.

The study followed a value-based insurance design program by Blue Cross Blue Shield of Louisiana (BCBSLA) called the Zero Dollar Co-pay program. BCBSLA eliminated out-of-pocket healthcare spending on chronic disease management for asthma, diabetes, hypertension, or mental illness. The assortment of drugs covered on this list was very comprehensive.

From 2015 through 2016, 265 patients entered the program. All patients were at-risk and had at least one of the four chronic diseases covered under Zero Dollar Co-pay, with the primary conditions being hypertension and diabetes. Their conditions accrued high costs, with patients on average seeing 193 percent higher total spending than other BCBSLA members in 2015.

Once part of the program, patients could access the drugs relevant for their chronic disease management at no cost. Usually, the drug was a generic version, but for drugs that had no generic equivalent the list included the branded version.

Overall healthcare spending dropped by 18 percent, or, on average, around $205 per member per month, the study found. When broken down into pharmacy spending and medical spending, the former saw little change while the latter saw an average decrease of 25 percent—or around $195.

“Results suggest that BCBSLA’s ZDC program accomplished something unusual in health care—enhanced patient access to medication and reduced total spending—through the elimination of co-pays for a subset of primarily generic medications in various chronic condition drug classes,” the researchers found.

Zeroing out copays is far from a new concept. Payers have tried it for diabetes, opioid treatment, and certain generic drugs.

Previous research testing zero copay insurance programs, however, did not find that this strategy led to lower overall healthcare spending for chronic disease management.

The researchers of the current study indicated that zero copay programs may have greater success if they incorporate two elements.

First, zero copay programs should offer a comprehensive set of drugs. BCBSLA’s value-based insurance design targeted a small set of drugs in each drug class, as opposed to only reducing costs for one class of drugs. The study also included antidepressant as a class, which most studies have not.

“Importantly, patients with chronic disease typically have multiple comorbidities and have a higher rate of mental illness relative to the US population as a whole,” the researchers explained. “The VBID programs studied thus far have generally not supported a wide range of medications that take into account a patient’s full medical complexity.”

Second, zero copay programs should address multiple chronic diseases, not just one or two. A third of the patients in the Zero Dollar Co-Pay program had more than one chronic disease and were well-served by participating in a program that might help lower costs for more than one condition.

While the program did not prove to lower prescription drug spending, it did demonstrate one way in which value-based insurance designs can decrease overall healthcare spending for health plans.

Since the study ended, BCBSLA has expanded this program’s enrollment by 20-fold.

“Future work should evaluate whether total spending reductions hold for the expanded population, as well as explore whether patients substituted branded for generic medications and whether patient savings were concentrated in certain patient types, such as members taking antidepressants,” the researchers suggested.