While clinical autonomy challenges the ability of governments and insurers to change physician behavior generally, and prescribing practices in particular, Ontario and Quebec have introduced a number of initiatives. These initiatives were ranked and selected for the shorter list of core policies based on their explicit or implicit focus on prescribing/medication management.
Prescription Drug and Health Care Spending
The cost of prescription drugs continues to be a major concern for patients. Patients and policymakers are concerned that the rising cost of drugs will prevent access to life-saving treatments.
In addition, a recent study found that pharmacy benefit managers (PBMs) are saving payers and consumers $654 billion in prescription drug costs annually. This is a significant part of the overall health care spending reductions being achieved by the Biden administration.
Many commenters urged the Departments to exclude bona fide service fees from the definition of “prescription drug rebates, fees, and other remuneration,” in order to reduce compliance burdens and maintain consistency with the MLR rule, Exchange Establishment rule, and PBM Transparency rule.
P&T Committees
PBMs and health plan sponsors rely on the expertise of P&T Committees to create drug formularies. These committees are typically comprised of physicians and pharmacists without any conflicts of interest.
P&T committees review medications from a clinical perspective, based on scientific evidence and standards of practice. This includes reviewing peer-reviewed medical literature, randomized clinical trials and FDA-approved prescribing information.
Through regulation and administrative monitoring, federal officials can ensure that P&T Committee decisions are based on clinical evidence. This is essential to providing access to drugs for persons with life-threatening and progressively disabling conditions that have failed other treatment options.
Health Maintenance Organizations (HMOs)
HMOs offer a network of physicians, hospitals and other health care professionals to provide health services. Patients choose a primary care physician (PCP) who oversees their healthcare and provides referrals to specialists.
The PCPs may also refer patients to behavioral health specialists or community health workers. This personal approach to healthcare promotes prevention and wellness and helps manage chronic diseases.
The Tax Equity and Fiscal Responsibility Act of 1985 (TEFRA) subsidizes an initial prepayment to HMOs to cover their monthly Medicare beneficiary cost. This is known as capitation.
Preferred Provider Organizations (PPOs)
PPOs allow beneficiaries more choice of doctors, hospitals, and other providers than HMOs. They usually offer cost-sharing incentives for choosing in-network providers, such as deductibles and coinsurance.
Our analysis shows that Medicare PPO enrollees are similar to recent enrollees of competing CCPs, but PPOs may be experiencing favorable selection (see figure). This could result in disproportionately selecting sicker beneficiaries who are more costly for the plan. As a result, PPOs will probably face difficulties with cost sustainability. This concern was acknowledged by the MMA, which provides for risk sharing outside of corridors to aid regional PPO network development in rural areas.
High Deductible Health Plans (HDHPs)
HDHPs, paired with tax-favored savings accounts, are an emerging healthcare market trend. These health plans typically include a high deductible before insurance starts to pay, and patients often face copayments or coinsurance before meeting their annual maximum.
Studies suggest that higher deductibles discourage people from seeking needed care, particularly early in the year. This leads to lower utilization of medical services and prescription drugs, and ultimately to poorer health outcomes.
To offset a high deductible, some employers provide their employees with pre-deductible coverage for medicines and health services to prevent exacerbations of chronic conditions. This approach may help increase beneficiary use of health services and reduce overall health system costs.
Health Savings Accounts (HSAs)
An HSA is a tax-advantag account that helps you save money for future healthcare costs.* How, it can only be use with a high-deductible health plan (HDHP).
Eligible medical expenses include health plan deductibles, copays and coinsurance amounts, prescriptions, acupuncture, bandages and first aid supplies, hearing aids and certain over-the-counter medications. In addition, if you’re remodeling your home and need lead-based paint removal, an HSA can help pay for this cost.
Unlike FSAs, HSAs are owner the individual, so funds remain with you if you change jobs or retire. Also, the account’s investments can earn tax-free interest.
Fee-for-Service
A medical service that your health insurance company pays for after you pay a co-payment or meet your deductible. A request by you to your health insurance company for reimbursement of a medical service you received.
Under the fee-for-service model, physicians have a strong incentive to provide as many services as possible since they get paid regardless of the quality of the care provided. However, steadily rising costs and concerns about quality have encouraged a push to shift away from fee-for-service towards alternative payment models such as value-based purchasing (VBP). This involves linking provider payments to performance on a set of quality measures.
