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Why Study This?
Why Study This?
High cost of healthcare: $4.7 trillion in 2023 (in US, ~ 17.6% of GDP).
Price Opacity: Decisions made without prior knowledge of prices or comparable alternatives, including for prescription drugs (which account for about 10% of spending).
Extreme price dispersion: Competition fails in its price regulation role. Prescription drug prices have extreme variance - "one is faced with a bewildering range of prices for the exact same pill" (Frank, 2001), causing many patients to overpay. See graphic for the variety of prices for the same drug, across multiple prescriptions by the same prescriber. Besides opacity and a convoluted industry structure, this huge dispersion occurs due to the role of intermediaries (PBMs) in selecting products and setting prices.
Consequences of high costs: Patients discover high costs too late, leading to medication non-adherence, poor outcomes, and even bankruptcy.
Wide range of prices for the SAME drug, with the same prescriber and insurer
The Good News ... and Bad News
The Good News ... and Bad News
Federal mandates and tech companies are changing this dismal picture. New "comparison shopping" or Drug-price Decision-support at Prescribing (DDP) Tools give physicians and patients real-time accurate, personalized, out-of-pocket costs, + recommend lower-cost therapeutically-equivalent alternatives.
The tools are enabled by real-time data exchange and API calls with multiple data and IT players - including EHR systems, PBMs, insurance firms, and care providers.
But this also leads to loss of control over UI, UX - a non-ideal system design (DDP information is shown in EHR pop-ups, and often ignored), and creation of mistrust because some providers offer inconsistent content (creating mistrust).
This limits DDP effectiveness and success, which requires physicians to alter prescriptions in response to cost-saving recommendations, which hits against physicians' time constraints, ego and overconfidence, lack of training or empathy.
See below, a generic representation of a drug price comparison tool (Wong et al 2023).
What we Studied: Research Questions
What we Studied: Research Questions
We have transactional data from real-world deployment of a DDP tool delivered via multiple EHR systems across multiple healthcare practices. Data includes 15 million clinical visits over 3 years, covering (just in 2023) 230,000 prescribers, over 24,000 distinct drugs, and over 1 million patients.
Do DDP Tools have solid potential? Can they find lower-cost equivalent alternatives?
Are DDP Tools effective? Do prescribers alter their prescription decisions, leading to cost savings in drug expenditures?
What Did we Find?
What Did we Find?
DDP Tools have great potential
DDP Tools have great potential
DDP tool identifies cost-effective alternatives for about 25% of drug prescriptions, could reduce patient out-of-pocket costs by 61.982% (from $377 million), and patient plus insurer costs by 30.861% (from $1.5 billion ).
But not much is realized
But not much is realized
Prescribers switch in only about 4.3% of available opportunities, and more when savings are high, capturing 20.256% savings in patient costs (15.475% for total costs).
Higher initial cost produces higher switch rate.
Huge variation across prescribers
Huge variation across prescribers
43% never switch, the highest hit nearly 80%. Moving half of bottom 90% prescribers to 12.5% switch rate could increase savings by 6.2x.
Gender matters! Female prescribers have significantly higher switch rates. Better empathy? Less ego?
What's Next?
What's Next?
Examine impact on medication adherence and longer-term health outcomes
Does steering patients towards lower-cost drugs increase medication adherence?
Does increased adherence improve health outcomes and reduce adverse events?
Does it improve health equity?
Need for research into system design, workflow, human interaction:
Economic (and time) incentives to prescribers.
Integrate pharmacists into workflow.
Train prescribers; use social pulls (e.g., sharing switch rate data)
Visual highlights (colors? notifications?) to emphasize cost-effective medication alternatives.
Strategic Timing of Information Delivery: Provide information at appropriate times during the patient visit (e.g., start or end of appointment time).
Effective Pop-up Design: Well-timed and strategically placed pop-ups can increase the acceptance of cost-effective alternatives.
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