48
HOSPI TALS IN INTEGRATED SYSTEMS
HOSPITALS/SYSTEMS DIGEST 2013
SANOFI / MANAGED CARE DIGEST SERIES
®
/ WHERE INFORMATION BECOMES INTELLIGENCE.
™
• By virtually every measure shown, system-tied
HMOs recorded lower pharmacy utilization than
their nonsystem counterparts. Further, pharmacy
utilization gaps between these two types of
HMOs widened in 2011 for several measures.
• For example, HMOs in highly integrated systems
reduced the number of prescriptions dispensed
to Medicare members by 13.3% in 2011, to 28.0
from 32.3 the prior year. In contrast, nonsystem
HMOs reported a 5.2% increase in this metric.
System-Tied HMOs Report Lower Pharmacy Utilization
PHARMACY
Multi-Tier Copay Designs Cover Large Percentages of System-Tied HMO Members
• Of members of HMOs tied to highly integrated
systems and subject to a closed formulary,
notably higher percentages were subject to
two-, three- or five-tier designs in 2011 than
similar members of HMOs not tied to systems.
• The majority (57.2%) of nonsystem HMO
members bound by closed formularies were
under a copay design with only one tier;
just 9.1% of system HMO members had a
one-tier copay tier arrangement in 2011.
Data source: IMS Health © 2013
HMOs in systems, percentage of
members using closed formularies,
by copay tier design, 2011
2,3,4
1
HMOs are considered to be in highly integrated systems if they are part of a system by virtue of ownership or contractual arrangements. HMOs
are not considered to be in integrated systems if they hold only provider network contracts with systems. All data are as of December 31, 2011.
Preoperational HMOs are excluded.
2
Copayments can be a flat dollar amount or a percent copay (coinsurance), which requires the HMO member to pay a fixed percentage of the
cost of the drug.
3
In a closed formulary, a drug not on formulary is generally not covered, unless it goes through a prior authorization process. In an open formulary,
a drug is usually covered by the HMO, even if it is not listed on formulary.
4
The percentages represent the share of all HMO members subject to a closed formulary, by copay tier system.
Pharmacy utilization and expenses of HMOs
1
HMOs in Systems
HMOs Not
in Systems
ALL HMOs
Pharmacy measure
2010
2011
2010
2011
2010
2011
# of Prescriptions per Non-Medicare HMO Member
8.9
8.6
9.3
9.6
9.3
9.4
# of Prescriptions per Medicare HMO Member
32.3
28.0
29.0
30.5
29.6
29.9
% of Prescriptions Filled with Generic Drugs
63.4% 66.2% 61.7% 61.3%
62.0% 62.3%
% of Prescriptions Filled with Brand Name Drugs
36.6% 33.8% 38.3% 38.7%
38.0% 37.7%
Pharmacy Expenditures as % of Total Operating Costs
12.0% 13.1% 13.3% 14.0%
13.0% 13.9%
Pharmacy Expenditures per Member per Year
$510.69 $548.29 $572.29 $584.04
$561.96 $577.93
Ingredient Cost per Prescription
$47.86 $49.75 $60.09 $60.92
$57.92 $58.95
Monthly Pharmacy Benefit Premium per Member
$30.86 $34.12 $41.48 $41.84
$39.13 $39.97
Monthly Pharmacy Benefit Premium per Family
$80.18 $91.25 $101.82 $104.36
$97.60 $101.51
HMOs NOT in systems, percentage of
members using closed formularies,
by copay tier design, 2011
2,3,4
Key Takeaway
With larger percentages of their members under two- and three-tier copay designs, system-tied
HMOs are able to introduce higher levels of cost sharing for their members. This may be encouraging
greater use of generic drugs, which, in turn, may help keep pharmacy premiums lower at these plans.
One Tier
(9.1%)
Two Tier
(41.7%)
Three Tier
(39.1%)
Four Tier
(3.7%)
Five Tier
(6.4%)
One Tier
(57.2%)
Two Tier
(19.7%)
Three Tier
(12.0%)
Four Tier
(9.8%)
Five Tier
(1.3%)
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