Humana's drug benefit linked to cost trade-offs

The insurer's new prescription program will base co-pays on how much the drug will save on other health care costs.

By Julie A. Jacob, AMNews staff. June 3, 2002.

Humana Inc. is taking the concept of tiered prescription drug benefits one step further with a program that will categorize benefits according to how much a drug reduces costs for hospitalization, surgery and other medical procedures.

Most insurers today have this type of benefit. Humana is changing the approach, however, by shifting to a program in which co-payments will be based on how much the drugs prevent health problems and cut future medical costs. "We decided to step back and take a look at this differently and connect [the cost] to the value," said William Fleming, PharmD, Humana's vice president of pharmacy and emerging technologies.

In Humana's new prescription drug program, scheduled to be rolled out in summer 2003 or winter 2004, medications will be divided into three "buckets." Drugs in the first bucket, which will have the lowest out-of-pocket costs for patients, will be those that provide an immediate trade-off in preventing hospitalization or surgery.

For example, antibiotics that cure bacterial pneumonia will fall in this category, explained Dr. Fleming.

Drugs that provide a longer-term trade-off in medical costs, such as those that lower cholesterol or strengthen bones, will be grouped in a second "bucket."

The third "bucket" of drugs will be those that make someone feel better or look better but do not provide any trade-off in future health care cost, said Dr. Fleming. Those drugs will have the highest out-of-pocket cost for patients. [...]