Paradoxical effects of cost reduction measures in managed care systems for treatment of severe psoriasis.

Brad A. Yentzer, Christopher B. Yelverton, Gregory L. Simpson, Jason F. Simpson, Wenke Hwang, Rajesh Balkrishnan, Steven R. Feldman

Research output: Contribution to journalArticle

Abstract

BACKGROUND: Insurance companies vary widely in their coverage policies for severe psoriasis therapies. Unfortunately, coverage policies for psoriasis therapies do not necessarily follow current treatment paradigms, such that more expensive second or third line treatments may be more easily obtained than first line treatments. METHODS: We reviewed insurance policy bulletins, statements of coverage/medical necessity, and prior authorization forms for three large insurance carriers regarding psoriasis treatment with biologic agents and phototherapy. A cost comparison was performed to estimate total costs to patients and insurer under the current system as well as a hypothetical system in which co-pays and deductibles are eliminated. Additionally, we reviewed the total cost to an insurer for placing a patient on a trial of home phototherapy before approving use of expensive biologics. RESULTS: Requirements for coverage for phototherapy treatments are often the same, if not more stringent, than those for biologics. On an annual per patient basis, insurance companies pay an estimated $5, $76, and $23,408 for home phototherapy, office phototherapy, and biologics, respectively. The first year cost to patients, however, is estimated to be $2,590, $3,040, and $920 for home phototherapy, office phototherapy, and biologics, respectively. An initial 3-month trial of home phototherapy yields a graded annual cost savings to insurers of $21,610 to $2,110 per patient. DISCUSSION: The evolution of psoriasis treatment has resulted in a paradoxical situation in which the use of lower-cost psoriasis treatments, with longer safety track records, is discouraged relative to newer options. If co-pays, deductibles, and prior authorization requirements that discourage phototherapy were reduced or eliminated, more patients and physicians would likely choose phototherapy over biologics. This has the potential to reduce overall healthcare costs for psoriasis management.

Original languageEnglish (US)
Pages (from-to)1
Number of pages1
JournalDermatology Online Journal
Volume15
Issue number4
StatePublished - 2009

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Phototherapy
Managed Care Programs
Psoriasis
Costs and Cost Analysis
Biological Products
Insurance Carriers
Deductibles and Coinsurance
Insurance
Therapeutics
Health Care Costs
Cost Savings
Biological Factors
Physicians
Safety

All Science Journal Classification (ASJC) codes

  • Dermatology

Cite this

Yentzer, B. A., Yelverton, C. B., Simpson, G. L., Simpson, J. F., Hwang, W., Balkrishnan, R., & Feldman, S. R. (2009). Paradoxical effects of cost reduction measures in managed care systems for treatment of severe psoriasis. Dermatology Online Journal, 15(4), 1.
Yentzer, Brad A. ; Yelverton, Christopher B. ; Simpson, Gregory L. ; Simpson, Jason F. ; Hwang, Wenke ; Balkrishnan, Rajesh ; Feldman, Steven R. / Paradoxical effects of cost reduction measures in managed care systems for treatment of severe psoriasis. In: Dermatology Online Journal. 2009 ; Vol. 15, No. 4. pp. 1.
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title = "Paradoxical effects of cost reduction measures in managed care systems for treatment of severe psoriasis.",
abstract = "BACKGROUND: Insurance companies vary widely in their coverage policies for severe psoriasis therapies. Unfortunately, coverage policies for psoriasis therapies do not necessarily follow current treatment paradigms, such that more expensive second or third line treatments may be more easily obtained than first line treatments. METHODS: We reviewed insurance policy bulletins, statements of coverage/medical necessity, and prior authorization forms for three large insurance carriers regarding psoriasis treatment with biologic agents and phototherapy. A cost comparison was performed to estimate total costs to patients and insurer under the current system as well as a hypothetical system in which co-pays and deductibles are eliminated. Additionally, we reviewed the total cost to an insurer for placing a patient on a trial of home phototherapy before approving use of expensive biologics. RESULTS: Requirements for coverage for phototherapy treatments are often the same, if not more stringent, than those for biologics. On an annual per patient basis, insurance companies pay an estimated $5, $76, and $23,408 for home phototherapy, office phototherapy, and biologics, respectively. The first year cost to patients, however, is estimated to be $2,590, $3,040, and $920 for home phototherapy, office phototherapy, and biologics, respectively. An initial 3-month trial of home phototherapy yields a graded annual cost savings to insurers of $21,610 to $2,110 per patient. DISCUSSION: The evolution of psoriasis treatment has resulted in a paradoxical situation in which the use of lower-cost psoriasis treatments, with longer safety track records, is discouraged relative to newer options. If co-pays, deductibles, and prior authorization requirements that discourage phototherapy were reduced or eliminated, more patients and physicians would likely choose phototherapy over biologics. This has the potential to reduce overall healthcare costs for psoriasis management.",
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Yentzer, BA, Yelverton, CB, Simpson, GL, Simpson, JF, Hwang, W, Balkrishnan, R & Feldman, SR 2009, 'Paradoxical effects of cost reduction measures in managed care systems for treatment of severe psoriasis.', Dermatology Online Journal, vol. 15, no. 4, pp. 1.

Paradoxical effects of cost reduction measures in managed care systems for treatment of severe psoriasis. / Yentzer, Brad A.; Yelverton, Christopher B.; Simpson, Gregory L.; Simpson, Jason F.; Hwang, Wenke; Balkrishnan, Rajesh; Feldman, Steven R.

In: Dermatology Online Journal, Vol. 15, No. 4, 2009, p. 1.

Research output: Contribution to journalArticle

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AU - Yentzer, Brad A.

AU - Yelverton, Christopher B.

AU - Simpson, Gregory L.

AU - Simpson, Jason F.

AU - Hwang, Wenke

AU - Balkrishnan, Rajesh

AU - Feldman, Steven R.

PY - 2009

Y1 - 2009

N2 - BACKGROUND: Insurance companies vary widely in their coverage policies for severe psoriasis therapies. Unfortunately, coverage policies for psoriasis therapies do not necessarily follow current treatment paradigms, such that more expensive second or third line treatments may be more easily obtained than first line treatments. METHODS: We reviewed insurance policy bulletins, statements of coverage/medical necessity, and prior authorization forms for three large insurance carriers regarding psoriasis treatment with biologic agents and phototherapy. A cost comparison was performed to estimate total costs to patients and insurer under the current system as well as a hypothetical system in which co-pays and deductibles are eliminated. Additionally, we reviewed the total cost to an insurer for placing a patient on a trial of home phototherapy before approving use of expensive biologics. RESULTS: Requirements for coverage for phototherapy treatments are often the same, if not more stringent, than those for biologics. On an annual per patient basis, insurance companies pay an estimated $5, $76, and $23,408 for home phototherapy, office phototherapy, and biologics, respectively. The first year cost to patients, however, is estimated to be $2,590, $3,040, and $920 for home phototherapy, office phototherapy, and biologics, respectively. An initial 3-month trial of home phototherapy yields a graded annual cost savings to insurers of $21,610 to $2,110 per patient. DISCUSSION: The evolution of psoriasis treatment has resulted in a paradoxical situation in which the use of lower-cost psoriasis treatments, with longer safety track records, is discouraged relative to newer options. If co-pays, deductibles, and prior authorization requirements that discourage phototherapy were reduced or eliminated, more patients and physicians would likely choose phototherapy over biologics. This has the potential to reduce overall healthcare costs for psoriasis management.

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