Cost Sharing Cuts Employers' Drug Spending- But Employees Don't Get the Savings
Abstract
Spending on outpatient prescription drugs has increased at double-digit rates for the past decade and is now the third largest component of health care expenses after hospital care and physician services. In an attempt to control costs, many employers and insurers have adopted incentive-based formularies, in which drugs are placed in different tiers. Under these arrangements, most drugs are covered, but enrollees have different co-payments depending on the tier to which a drug is assigned. Do increased patient cost sharing and formulary restrictions reduce pharmaceutical use and costs? To answer this question, a RAND team led by economist Geoffrey Joyce examined more than 700,000 person-years of data on beneficiaries enrolled in health plans from 25 private employers. The study is the largest ever conducted involving non-elderly patients enrolled in employer-sponsored health plans.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 01, 2003
- Accession Number
- ADA411929
Entities
Organizations
- RAND Corporation