As we've repeatedly shown, adding mandated benefits to health plans increases premiums for everyone, while rarely addressing underlying costs. Touted by special interest groups, it's sometimes difficult for politicians to say "no." And insurance companies make attractive targets: easily portrayed as "the bad guys," one almost imagines carrier CEOs twirling handlebar mustaches while grinning at how they've once again shortchanged their clients.
Which is why an email we recently received from For Grace is so disturbing and disingenuous:
"Chronic pain attacks 76.2 million Americans each day. When those people visit their physician in search of medicine or treatments to help alleviate their suffering, many find their health plans prevent them from getting the prescriptions their doctors have deemed best to treat their condition. Some of the ways this is done include little known practices such as “step therapy,” “fail first” and “therapeutic switching.”
For Grace is a nonprofit advocacy group which claims to be "devoted to ensuring the ethical and equal treatment of all women in pain." While that sounds noble, their email betrays a rather twisted portrayal of how the system really works.
For starters, insurance companies have no power to dictate to providers how they treat their patients, nor can carriers prohibit their insureds "from getting the prescriptions their doctors have deemed best." Insurance companies have the power only to decide how much (if any) they will pay toward the cost of those treatments.
And then there's the snide reference to "step therapy." As defined in the email, this technique is "designed to lower costs and ostensibly provide higher-quality care. The policies are also called "fail first" policies by some, since the drugs must fail to help the patient before the patient receives coverage for a different option." And that's fairly accurate. But the email goes on to tout a bill in the California legislature that would prohibit insurers from overriding a doctor's prescription. The Golden State's legislators really ought to consult with their counterparts in Georgia, Florida, and Alabama, since those states want to do exactly that.
And it's interesting that For Grace isn't training its sights on CMS, since Medicare does the exact same thing. Under Part D, one must go through a lengthy appeals process to overturn that agency's step therapy requirements. Perhaps the folks at For Grace know that it's far easier to fight an insurer than The Feds.
The real issue, however, is whether or not step therapy is effective at both controlling costs and obtaining desired health outcomes. I asked one of our industry insiders to help educate our readers in why step therapy is often successful. He was kind enough to give us a brief tutorial as to why outlawing it would be a bad idea:
"Step therapy is a program where certain prescriptions will only be covered if a prior series of medications or treatments have been tried first. I cannot speak to other carriers, but we have a very limited step-therapy program. I would assume that other carriers programs mirror ours. As outlined by the doctor mentioned, it is usually the higher cost drugs or lifestyle drugs. That is not the whole picture, however, as effectiveness is also a key driver. Take Nexium for example. It was removed from our formulary not just because the cost was prohibitive, but because there were other PPIs that were more effective."
So in this case, a medication that was both more expensive and less effective was relegated to a non-preferred status. Does that mean that an insured is forbidden to buy and take it? Of course not, but that insured will pay more out of his own pocket for the privilege, which saves money for the carrier, and thus all the other insureds. Why would this be a bad thing?
And what about the argument that carriers only do this to avoid paying for more expensive meds?
"Step is a combination of effectiveness and cost control, and both of those pieces need to be in place in order for the program to be successful. If only the cheap drugs are used without an eye for effectiveness, we could see an increase in negative outcomes that have a higher treatment cost on the backend."
In other words, carriers recognize that cheaper isn't always less expensive in the long run.
For Grace is concerned about pain meds, but the same arguments would apply to any other class of drug. Whether it's Nexium, or Lipitor or steroids, it's important to remember that just because something costs more doesn't mean that it's more effective or desirable. And certainly, requiring carriers (not to mention Medicare) to avoid looking at "the big picture" increases costs for all of us.