The University Record, August 13, 2001

Prescription drug plans are designed with requirements of retirees in mind

Editor’s note: Late in 2000, then-Provost Nancy Cantor and Robert Kasdin, executive vice president and chief financial officer, charged the Prescription Drug Work Group 2002 with examining prescription drug coverage in University health plans. The following article discusses some of the issues the Work Group considered as it examined plan designs and cost containment measures.

By Kate Kellogg
Human Resources and Affirmative Action

Rising prescription drug costs are affecting people near or past retirement age perhaps more than any other segment of the population.

Aging brings health changes and chronic conditions that increase the need for medications, particularly expensive drugs to treat such maladies as arthritis, high cholesterol, high blood pressure, diabetes and ulcers. The 5,828 members of the University’s United of Omaha Plan, of which about 80 percent are retirees, averaged 9.7 prescriptions per member last year, compared to 5.6 prescriptions per member for the 30,665 U-M employees enrolled in M-CARE.

In addition to generally using more prescription drugs, retirees often travel extensively and therefore need flexible delivery options. The quality of communication with providers and pharmacists also is critical for older people, to avoid the possibility of adverse drug interactions.

The security of the prescription drug benefit and the financial impact of rising drug costs on fixed incomes were dominant themes of discussion last year in prescription drug focus groups the University held for retirees.

“The University is sensitive to the special prescription drug needs of its retirees and remains committed to continuing the current level of prescription drug coverage for that group,” said Martha Eichstadt, Benefits Office director and a member of the work group.

Delivery is a particular concern among the elderly. Those who are being treated for chronic conditions benefit from obtaining medications in 90-day supplies, which limit trips to the pharmacy. Most drug plans allow physicians to prescribe such “maintenance drugs” for patients who need long-term courses of drug therapy.

Mail-order services offer added convenience for those taking maintenance drugs. Depending upon the plan, a member’s copay may be less for mail-order medications.

Also, the plan’s pharmacy benefit manager pays for standard shipping. The work group’s report includes a mail-order feature in all three plan design options.

Currently, the University’s HAP and Care Choices plans offer mail-order prescription filling. United of Omaha, the major medical portion of the Blue Cross Blue Shield of Michigan (BCBSM)/United medical plan, is implementing a new mail-order service.

BCBSM/United members soon will receive information on the service.

“United members would still pay the entire cost at the time of purchase for drugs by mail order but will pay only one dispensing fee for three prescriptions,” explains Keith Bruhnsen, Benefits Office assistant director and a work group member.

“By using Express Scripts mail-order service, they will receive an additional 6 percent savings to the drug card program used at retail pharmacies,” Bruhnsen says.

“With mail-order prescription drugs, the prescription drugs are delivered directly to their homes with security. When the claim is submitted to United for reimbursement, the plan reimburses 80 percent after the deductible.”

As to whether mail-order programs save money for everyone, including the benefit plan, “the votes aren’t in yet,” says work group member Patrick L. McKercher, director of the Center for Medication Use, Policy and Economics.

However, this delivery method has the potential for waste if people change their maintenance drugs too frequently or find they are allergic to a medication and stop taking it in midcourse, he adds.

To minimize that possibility, health plans recommend that only patients who have been diagnosed with chronic conditions receive maintenance drugs by mail order—and only after they have been stabilized on the drugs.

Retirees have indicated a preference for using the same pharmacy for all prescriptions. That is a good idea for all members, retired or otherwise, according to the pharmacy experts on the work group.

“I encourage everyone to use the same pharmacy, if possible,” says Duane Kirking, professor of pharmacy and a work group member. “That way, all the patient’s prescription information is in one computer system, and the pharmacists can print it out for you at any time. This is also the case if you stay with one chain, as all pharmacies within a chain share records.”