Seeing Through the Cost of Your Drugs
By Megy Karydes
Like many families, mine is one that requires a daily dose of medicine to keep our bodies healthy. Last year, the two prescriptions for my daughter and me cost us $200 through our family insurance plan provided by my husband’s employer. This year, his company changed our plan to a health savings account, and I entered a world of hurt and confusion. Last Jan. 1, our cost for the two prescriptions jumped from $200 to $2,431.85. In one week, the price of one increased by more than $700. Why?
The biggest barrier in healthcare today is cost—not only the high amount we have to pay (insurance premiums, deductibles, co-pays, etc.) but not knowing what we will have to pay or why we will have to pay that amount.
Managing our health involves managing our healthcare. But what can you do when your physician says you need physical therapy, yet you have no idea how much it’s going to cost—or when prescription drug prices will fluctuate like the stock market gone off the rails? It also doesn’t help when physicians don’t have the costs of services and prescriptions available to them or even know the full range of options available to you.
A truly transparent healthcare market would allow us to know what we’re paying for, why it costs what it does and what other options might exist for us. This would lead to a system that would better serve patients and encourage better practices by healthcare services and insurance providers.
Managing Hospital Costs
Americans spend nearly $3 trillion annually on medical care. Of that figure, nearly one-third of healthcare spending is on hospital care while an additional one-fifth of healthcare dollars are spent on physician care, according to the National Center for Policy Analysis.
Vineet Arora, MD, MAPP, is well versed in how the cost of care affects us. As a hospitalist at the University of Chicago Medicine, she works closely with physicians and physicians-in-training to help identify patients who might have difficulty paying for services or medication when they’re admitted to the hospital. She also advocates for hospitals to be more price transparent with physicians, so doctors can be thoughtful of the services they order on behalf of their patients. The topic of price transparency is so important in healthcare, it’s covered in a new book she co-authored: Understanding Value-Based Healthcare.
If you’re being rushed to the emergency room, you’re less likely to have conversations about the price of tests or services since the emergency room physician’s goal is to stabilize a patient or get to the root of the problem immediately. Also, fearing a possible lawsuit, physicians are more apt to request tests to rule out possible causes than to worry about how much you’ll be charged for a chest X-ray.
Doctors may only know the ballpark cost of a test or medication because each person’s insurance plan differs. It doesn’t help when, as Arora says, hospitals aren’t exactly forthcoming with their chargemaster. The chargemaster is a listing of items billable to patients or their health insurance provider. The rates for each item is often negotiated between hospitals and health insurance providers, who then determine what will actually be paid to the hospital. While every hospital has a chargemaster, getting access to its contents can prove difficult, unless you’re in the state of California. The Payers’ Bill of Rights forces all California hospitals to provide the state with their chargemaster and make it available at the hospital or on the hospital’s website.
In the absence of that data, patients are left to guess what their bill will look like after a hospital visit.
“One of the things that we advocate for with our physicians and physicians-in-training is to screen all patients for problems related [to] paying for drugs,” Arora says. “A lot of patients go directly to the pharmacy [after a hospital visit]. They might be discharged from the hospital to refill an antibiotic or a new anticoagulant, a brand name perhaps, when a less costly generic is not available, because maybe they just had a heart attack or a stent put in. And it turns out they may not have the resources to pay for the medication at that moment, and they are left making difficult choices.”
Choices like leaving without buying the medicine or not being able to make rent the next month.
Those on multiple medications, like many seniors, have it worse. Due to an inability to pay, they may choose to not fill a prescription or to ration portions by either splitting pills or taking medicine every other day, she says. As a result, they may be doing more harm to themselves than good. “For example, diabetic patients need to get their glucose under control, and half their medication isn’t going to help,” Arora warns.
Apps and websites, like GoodRx and LowestMed, can help a patient find the lowest cost of a prescription; they work much like finding the lowest airline ticket. GoodRx even has coupons for some drugs to help offset the price. Another option is Consumer Reports, which gives readers information not only on the cost of the drug but also its efficacy and other drug options.
As director of Educational Initiatives of Costs of Care, Arora and her team created free web-based modules on how to improve cost-conscious medication prescribing, GOTMeDS.
The idea for GOTMeDS is for a physician to review medication with a patient, figuring out what prescriptions the patient needs to continue upon discharge and what options, if any, exist to lessen these prescription costs.
“Can you use any drugs on the $4 list?” asks Arora, as she explains the six-point strategy. Or perhaps splitting a higher dosage of the same pill is a low-cost option. “Oftentimes a higher dose of the medication is the same cost as the lower dose, especially for cholesterol-lowering drugs like statins. [For example, if the dosage of 40 mg is required, the doctor] can prescribe the 80 mg version and instruct the patient to buy a $5 pill splitter and split the pill in half, thereby taking the prescribed 40 mg. And now the patient [has saved] half the cost of the brand-name drug. Those are some easy strategies that we teach here.”
Healthcare Management and Services
Prescription prices for medications are variable. I had no idea that medication costs could fluctuate so much until one of my prescription’s cost soared in a week.
“Costs of drugs are determined in real time; [the price] is fluid; it can change during the course of the day,” says Brian Henry, vice president of corporate communications at Express Scripts, the largest pharmacy benefit management organization in the country.
Henry says there are many reasons for the price fluctuations. There are “drug manufacturers who may charge a certain fee; then you have your plan design, formulary; the co-pay; sometimes you have a shortage of a drug, or a generic is introduced,” he says. Members can access approximate costs for medications through their secure member website, he adds.
Then, you have medications that were once only available by prescription that are now over-the-counter (OTC), like Flonase, a popular nasal spray for allergies. While more readily available, the cost could rise for many patients since some OTC drugs may not be part of a patient’s prescription insurance coverage. Furthermore, the Affordable Care Act (ACA) made some OTC drugs ineligible for reimbursement through flexible spending accounts (FSAs) and health savings accounts (HSAs). However, some are eligible for reimbursement with a prescription—yes, a prescription for an OTC. It depends on your coverage.
So, what recourses are available to patients? Depending on your symptoms and diagnoses, ask your doctor what options exist, both over-the-counter and by prescription, and weigh those options both from an efficacy and price standpoint.
And, of course, apart from the pharmacy benefit management organization is the healthcare benefits provider. My family uses UnitedHealthcare, and unbeknownst to me until I began working on this story, the company has a Health4Me mobile app that can estimate costs of common healthcare services for members.
“Using this service, people can access price estimates for more than 755 common medical services across 500 care paths, including inpatient services such as back surgery, joint replacement and childbirth,” says Anthony Marusic, a spokesperson for the company.
A knee MRI, for example, in Chicago can range from $458 – $2,310. “The myHealthcare Cost Estimator allows our members to know what the exact cost of their medical service or procedure will be,” he says.
Since my husband is undergoing physical therapy for a running issue, I decided to take the estimator for a test drive. I entered the CPT (current procedural terminology) code that his physical therapist is using—you need to know the code in order to compare apples to apples, which is why communicating with your healthcare professional is key—and searched his options. The query gave me dozens of physical therapists near our zip code as well as our out-of-pocket costs and what our health insurance would cover. In his case, the cost difference among the options was nominal, but it would be worth exploring those options if you were in the market for that knee MRI and the cost differential were in the thousands.
The cost estimator feature is available via the Health4Me mobile app or online.
Protecting patients from financial harm should be part of a patient’s healthcare equation, but is not top of mind for most physicians. Their goal is to help ease their patients’ ailments. It’s a balance between ordering the sufficient number of tests to be on the safe side while still not wanting to get sued for missing something simply because they were trying to be mindful of costs.
Do we need to train the physicians to know the costs of every medication? “No,” says Arora. “You need to give them the tools to start the conversation with their patients.”
That would go a long way in allowing patients to make better-informed decisions.
But first, hospitals must be more price transparent with their physicians, so that the physicians can be better informed when ordering services or procedures that may not be necessary. Finally—and we’re moving in this direction—patients need to be made more aware of their options when it comes to shopping around for healthcare services.
The time is distant before healthcare costs in this country are anywhere near manageable for most patients. Arming ourselves with the knowledge of what’s available is the first step toward being healthy and having a healthier financial result.