UM eases medical costs

By Katie Merx Detroit free press (KRT)

DETROIT – Beginning July 1, at least 2,100 diabetic University of Michigan employees and dependents will receive many of their essential medicines for free as part of a two-year pilot program.

The university in Ann Arbor, Mich., will waive co-pays for certain generic prescription drugs that control blood sugar, blood pressure, cholesterol and depression and reduce the risk of heart and kidney problems. It will reduce co-pays 25 percent to 50 percent for brand-name equivalents of those drugs.

The university is instituting no-pays for diabetes-related drugs hoping that it will eliminate the cost barriers that prevent employees and their covered family members from buying and using prescription medicines that could keep them healthy.

Employees who are enrolled in the university’s health maintenance organization, M-Care, will be able to get free yearly eye exams to try to catch early signs of the diabetic eye disease that is a major cause of blindness.

The idea behind providing medicines and services for free is to improve employee health and eventually save money, or at least slow increases in health costs.

University employee Allison Picinotti, 28, said she’s thrilled to hear about the program. She was diagnosed with diabetes three years ago and said she’s fortunate that so far she needs only to take insulin. It costs her about $25 a month.

But in the brief time since she was diagnosed, she already needs much more of the blood-sugar-regulating insulin. She knows her costs will go up as she ages.

“I know a lot of patients who spend hundreds of dollars a month on prescription drugs,” Picinotti said.

It’s not uncommon for a diabetic to be on a regimen of six to 10 medicines every day, said Dr. William Herman, director of the Michigan Diabetes Research and Training Center and medical director of M-Care.

Sometimes people fail to adhere to their medical regimens because of the cost associated with that many medicines, said Dr. Allison Rosen, an assistant professor of internal medicine at U-M Medical School.

But a diabetic’s failure to follow her medical regimen can result in pricier emergency department visits and hospitalizations and eventually lead to serious health complications such as blindness, amputations, kidney failure, heart disease and premature death.

When diabetics adhere to their medical regimens, studies show it prevents health complications, prolongs lives and ultimately saves money, Rosen said.

The diabetes no-pay pilot, called MHealthy: Focus on Diabetes, is similar to programs other employers have used for several years to keep employees healthy and reduce costs, including such employers as Pitney Bowes Inc. and the City of Asheville, N.C.

The City of Asheville reduced the average annual cost of care for diabetic workers by $2,000 per person as soon as it started paying the whole cost of diabetes drugs. And Pitney Bowes has saved more than $1 million each year since it cut employees’ co-pays for diabetes, hypertension and asthma drugs.

On April 17, Wal-Mart Stores Inc. announced that it plans to reduce employee co-pays for certain prescription drugs from $10 to $3.

While the university’s program is similar to the others in design, U-M believes it will be the first employer in the nation to try to evaluate the impact of targeted co-pay reductions on employee health and system-wide health-care costs.

“We hope this effort will yield solid results for our own community and provide a model for others,” said U-M President Mary Sue Coleman. “Although it will cost us money in the short run, we anticipate it will save lives and money in the long run.”

The university anticipates the two-year pilot will generate less that $100,000 in administrative costs, and increase diabetes-related drug costs by $800,000. But officials believe that will be offset by a lowering of other health-care costs for those patients.

If the pilot is successful, the university plans to continue the program and extend it to other chronically ill patient groups, such as those with heart disease and asthma.

U-M started with diabetes because a university analysis showed that a significant number of patients don’t follow their prescribed drug regimens, many people suffer from the disease and studies showed that close adherence to prescribed treatments can improve health dramatically.

“Because of the evidence of preventive benefit from certain medications is so strong, and because the opportunity to improve is so great, diabetes is a natural place to start,” said Dr. Robert Kelch, the university’s executive vice president for Medical Affairs.