Bylowering co-payments on prescription drugs and promoting diseasemanagement companies can cut health care costs, finds a three-year study commissioned by theFlorida Health Care Coalition.

"The increased cost of fully following a prescribed drug regimenis more than offset by fewer emergency-room visits and inpatienthospitalizations. The disease management program is yet another outreach to assistand remind employees of the importance of using their medicationsto control their chronic illness."

The study, which was reported in journal Health Affairs, showsthe direct cost benefits to companies that implement "value-basedinsurance design" and use it with a disease management programthat promotes and educates employees about preventive health care.Companies can earn a return of $1.33 return via lower co-paymentsfor every dollar spent up front on medication during a three-yearfollow-up period, the study reveals.

"Amid soaring health care costs, this validates that old sayingthat an ounce of prevention is worth a pound of cure, and that'sespecially true where it often hurts most, in our pocketbooks,"says Becky Cherney, president and CEO of FHCC, which commissionedthe study with support provided by Merck & Co. Inc.

The study studied the effects of value-based insurance design aswell as disease management on diabetics. Diabetes is a chronic andexpensive condition reaching 7.8 percent of the U.S. population,according to the American Diabetes Association.

Earlier studies have found comparable improvements in medicationadherence attributable to lower co-pays. However, the FHCC studyalso shows companies can save money.

By taking medication and participating in a disease-managementprogram, patients' avoid more involved and costly care in thefuture, according to the study.

"This study demonstrates how the synergy of value-basedinsurance and disease management not only greatly improvescompliance with medical guidelines, but it also reduces the directmedical costs associated, in this case, with diabetes," says Dr.John J. Mahoney, medical director of FHCC. "We found that we wereable to achieve savings in the entire outpatient arena."

The study, which began Jan. 1, 2006, examined the effects of apharmacy program that reduced out-of-pocket costs to 10 percent fordiabetes medications and focused on two groups of planparticipants: 1,876 employees and dependents who participated in adisease management program and had value-based insurance and amatched control group that did not have value-based insurance.

After just the first year, the use of diabetes medication was3.8 percent higher among those who participated in both value-basedinsurance and disease management, compared to those only in thedisease-management program. The gap rose 6.5 percent after threeyears, according to the study.

"Not only were the effects on prescription-drug use andadherence to guidelines sustained over time," the study states,"they also grew over time."

The analysis used a baseline of 2005 with data from ThomsonReuters Advantage Suite, comprising outpatient prescription drugand medical claims; inpatient medical claims; and patientenrollment data.

"We learned that people are more compliant in using theirimportant prescriptions when we improve access by loweringco-payments," Cherney says. "The increased cost of fully followinga prescribed drug regimen is more than offset by feweremergency-room visits and inpatient hospitalizations. The diseasemanagement program is yet another outreach to assist and remindemployees of the importance of using their medications to controltheir chronic illness."

The study, Cherney adds, helps employers, providers and patientsunderstand the value of available treatment as part of ahigh-quality U.S. health-care system.

Co-authors of the study are Teresa B. Gibson, Ph.D., director ofhealth outcomes, Thomson Reuters; John Mahoney, M.D., medicaldirector of FHCC; Karlene Ranghell, MBA, RRT, project director ofFHCC; Becky J. Cherney, CEO and president of FHCC; and NewellMcElwee, executive director, U.S. Outcomes Research, Merck &Co. Inc.