Reduced Cost-sharing for Chronic Conditions Helps Employees, Employers Study Says

30 Nov, 2021 Nancy Grover


Sarasota, FL ( – Employers looking to reduce their healthcare spending and maintain – or even improve – the quality of care provided to employees may want to consider reducing cost sharing for primary care or medications for chronic conditions. A new study in the Journal of Occupational and Environmental Health suggests those strategies show promise, while high deductible health plans with a savings option are not as effective.

Researchers from Northwestern University and UnitedHealth Group in Minneapolis looked at more than three dozen studies that evaluated employer-led efforts to improve the value of their health spending. Of the 44 studies they reviewed, 25 reported improved value – for the employer, employee outcomes or both.

The Study

The continuously rising cost of healthcare has left employees struggling to provide affordable, meaningful benefits to their employees. Over the last two decades they have implemented a number of changes to their health benefit plans to keep their costs down.

“Employers have to determine whether the benefits they offer to their respective employees and their dependents will not only provide high quality care but also offer efficiently priced services for both the employer and the employee,” the authors explained. Their study is intended to provide “a clearer understanding of what evidence the scientific literature contains on employer-led health care efforts, and which avenues may be beneficial to their continued efforts to provide affordable high-quality health care coverage in the present and the future.”

All 44 studies analyzed included outcomes for both employer health spending as well as employee health outcomes. Specifically, there were three types of benefit changes included:

  • Promoting access to high-value services (7 studies)
  • Redesigning payment models or health plans (10 studies)
  • Restructuring drug benefits (27 studies)

“The most promising efforts were those that lowered or eliminated cost sharing for primary care or medications for chronic illnesses,” the researchers said. “High deductible health plans with a savings option appeared less promising.”

Restructuring Drug Benefits

Many of the 27 studies in this category looked at cost-sharing for chronic conditions, such as diabetes, asthma and hypertension. Ten showed improved health outcomes without additional costs to employees, while five also produced cost savings.  

Twelve studies addressed the redesign of pharmacy benefits, such as changing a formulary or the number of tiers, or the move to a carve-out or carve-in. One study in particular showed that carve-in benefits resulted in a savings of 4 percent in total costs and lower rates of hospitalization and emergency department visits for patients that had chronic illness.

“The cost of prescription drugs has grown rapidly, and even higher than other health services in recent years, so the prevalence of drug benefit studies in our review is unsurprising,” the study said. “Fortunately, our results show that lowering cost sharing for medications for certain chronic illnesses show promise in improving the value of employer health spending. This is particularly notable as changing cost-sharing arrangements for medications is a comparatively simple alteration, and one that does not require a major restructuring of contracts with providers.”

One issue not included in the existing literature is cost controls for specialty drugs, the authors noted. While they only are used by 2 percent of the population they accounted for about half of total drug spend in 2019. “The number of specialty drugs on the market and in development continues to grow rapidly, and the number of conditions they are designed to treat is expanding,” the study said.

Promoting Access to High-value Services

Four of the studies in this category aimed to improve access to primary care. Employers tried to eliminate copayments for their employees and families, or reduce barriers by offering onsite healthcare services. Some supported a health home model where primary care physician practices engaged with members in a coordinated manner.

“Although these studies demonstrated mixed success in reducing costs to employers, they were uniform in enhancing care quality: children were more likely to use preventive services, primary care visits increased for employees, and employee health biometric measures improved,” according to the study. “All four studies found statistically significant improvements in health outcomes; three of these studies did not result in higher spending.”

The additional studies looked at strategies to reduce cost sharing for physical therapy or substance use disorder, or increasing cost-sharing for certain imaging and surgical procedures. “None of these efforts showed success in reducing employer health spending,” the authors wrote. “The research was favorable in terms of measured employee health outcomes.”

Redesigning Payment Models

The studies in this category showed the least promising results of all three plans studied, according to the authors. They dealt with high deductible health plans with a savings option (HDHP-SOs), or alternative payment model.

Of the six studies that included HDHP-SOs, none showed improved or maintained outcomes for workers. However, savings for employers were evident and ranged from 3.8 percent to 17.4 percent.

“Our results on HDHP-SOs are concerning, given the prevalence of these plans,” the study said. “In 2020, 26% of employers offered HDHP-SOs to their respective employees, and 62% of covered workers were enrolled in HDHP-SOs.20 Our findings align with a systematic review … that reported that HDHPs appeared to reduce health care costs by decreasing both appropriate and inappropriate care, and specifically, that these plans had an adverse effect on the use of preventive health care services. Even HDHPs that offer reduced or no-cost preventive care may have a harmful impact on health outcomes because beneficiaries may be unaware of these cost-sharing exemptions. HDHP-SOs may be tempting to employers, given the potential cost savings, and to employees who desire lower premiums and the tax benefits of a health savings account, but this strategy is among the least promising to promote value in health spending.”


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    About The Author

    • Nancy Grover

      Nancy Grover is a freelance writer having recently retired as the Director, Media Services for She comes to our company with more than 35 years as a broadcast journalist and communications consultant. Grover’s specialties include insurance, workers’ compensation, financial services, substance abuse, healthcare and disability. For 12 years she served as the Program Chair of the National Workers’ Compensation and Disability Conference® & Expo. A journalism/speech graduate of Ohio Wesleyan University, Grover also holds an MBA from Palm Beach Atlantic University.

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