ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, March 21, 1996 TAG: 9603210022
SECTION: BUSINESS PAGE: B6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: ASSOCIATED PRESS
USE OF LOW-COST DRUGS can fail to cure patients and result in longer hospitalizations, researchers concluded. Six HMOs paid for the study.
HMOs that steer their patients to cheaper prescription drugs actually are increasing the cost of care in the long run because some of these people are getting sicker, a new study says.
The study challenges a key principle of health maintenance organizations - that cheaper medicines such as generics or older formulations reduce costs without degrading the quality of care.
As restrictions on drug choices increase, ``researchers found more patient visits to physicians, more emergency room visits and more hospitalizations, all of which would likely lead to an increase in medical costs,'' the study said.
The study's chief author said it showed that health plans must pay more attention to a patient's overall treatment program - not just on individual components like the cost of drugs.
``If patients and their clinicians work together to get that patient better as quickly as possible, that will lower costs, even if it means taking a more costly drug,'' said Susan Horn, a senior scientist at the Institute for Clinical Outcomes Research in Salt Lake City.
The study was welcomed by the nation's biggest HMO - 6.5 million member Kaiser Foundation Health Plans.
Kaiser has liberal policies on drug choices and puts doctors, not business executives, in charge of such decisions, said Dr. William Elliott, who is chairman of a committee that picks drugs for Kaiser's northern California region.
``It would never be in our interest to be penny wise and pound foolish because cutting back in one area obviously would increase costs in another,'' he said.
Elliott acknowledged that some HMOs impose severe drug restrictions that can be counterproductive. He wouldn't name them.
The study was published in the American Journal of Managed Care.
It covered 13,000 members of six health maintenance organizations dispersed around the country. It was paid for by the HMOs and by the National Pharmaceutical Council, which represents drug companies. The HMOs agreed to cooperate only if the study authors kept their identities secret.
More than 125 million Americans belong to HMOs or other health plans that require or encourage doctors and patients to use drugs from a preferred list called a formulary.
Health plans can make more money by sharply limiting their formularies to just a handful of drugs in each category because they can demand big price discounts from the drug makers for the right to be on the formulary.
The study examined the drug formularies of the six HMOs and how they affected the health of patients with asthma, ear infections, arthritis, ulcers and high blood pressure for eight to 12 months during 1992.
The researchers said patients covered by plans with the most restrictive formularies used other medical services twice as often as patients with no such restrictions.
Horn cited an example of how a restrictive formulary might increase health-care costs.
Traditional treatment for the sexually transmitted disease chlamydia is an antibiotic called doxycycline that is often taken four times a day for a week or longer, she said. A newer antibiotic called azithromycin can cure the disease with one dose, but the drug costs four times as much per pill.
Women on the seven-day regimen often fail to take all their medicine and so symptoms return and the disease can worsen, becoming an inflammation of the entire pelvic area and requiring hospitalization.
Patient advocacy groups said the study findings were no surprise.
William Freedman, executive director of the National Association of People with AIDS said, ``Studies are now beginning to demonstrate what we have long believed - restricted drug formularies increase costs and decrease quality of life for people living with HIV disease.''
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