Summer 2024 Insight Employer Newsletter

Independent Health and ECMC work together to improve the quality and cost of care

By Michael W. Cropp, M.D., and Thomas J. Quatroche Jr., PhD

The drivers of health care costs are so varied and complex, there is no single solution or entity that can curtail this unsustainable trend. Reducing health care costs while maintaining quality and access requires a collective approach of wide-ranging partnerships and solutions.

Such a solution has grown out of a collaboration with Independent Health and the Erie County Medical Center (ECMC), which will benefit the entire community.

In 2021, Independent Health and ECMC collaborated on an opportunity to create and implement a solution to address the challenge of costly patient readmissions. Recognizing the impact of avoidable readmissions, Independent Health provided ECMC with “innovation dollars” to improve the health prospects of Independent Health members discharged from an acute hospital stay. 

While short-term hospital stays address the most immediate treatment needs for most patients, approximately 25% of individuals with multiple chronic conditions find themselves back in the hospital within 30 days, at an average cost of $20,000 locally.

Sometimes a patient’s readmission is due to the gap between the patient’s discharge from their initial stay and their scheduled follow-up care with their provider – increasing the chance for readmission, poor outcomes, and continued medical complications, in addition to unneeded expenses for everyone involved.

ECMC used the innovation dollars to implement a care transition program focused on Independent Health members in need of this high-touch and closely coordinated care. The newly formed care team of ECMC clinicians and support professionals proactively worked with the most acute/high-risk members on a care plan for discharge and 30-day follow up.

Depending on the patient’s needs, the care plan included linking the member to community resources or to a primary care physician for follow-up care, as well as medication counseling by an ECMC pharmacist to improve education and understanding about the importance of medication adherence.

The results of the care transition pilot were striking: Independent Health members received better post-discharge care, which reduced readmissions by 46 percent for Independent Health’s commercially insured membership.

The pilot with Independent Health proved to be so successful, ECMC was recently awarded $8.3 million in funding from New York State to expand its care transitions program to reduce avoidable readmissions for all its patients.

The care transition program was among other successful collaborations between ECMC and Independent Health. Another is a virtual bridge program to support individuals with mental illness or a substance use disorder with their discharge as well. The program connects patients to an established outpatient behavioral health program to provide on-going treatment and reduce crisis episodes, which require emergency behavioral health care. 

The success of this program is proof that payer-provider partnerships and fresh approaches to longstanding challenges can pave the way to improved outcomes, better patient experiences and lower costs.

Michael W. Cropp, M.D., is chief executive officer for Independent Health, and Thomas J. Quatroche Jr., PhD, is president and CEO for Erie County Medical Center

Doing our part to help address skyrocketing prescription drug costs

Prescription drug costs continue to surge, driven by new, high-cost specialty medications, especially in the categories of weight-loss, oncology, immunotherapy and rare diseases, along with pharmaceutical companies’ annual drug price increases.

New drugs introduced in 2023 were at prices 35% higher than in 2022, and the median annual list price for a new drug in 2023 was $300,000. This skyrocketing trend is projected to continue into 2025 as emerging cell and gene therapies entering the market will exceed $1 million per patient. From a local standpoint, Independent Health’s pharmacy expenses alone totaled $500 million in 2023 and now account for almost 30% of our member’s premium dollar.

Addressing the complex drivers of health care costs takes collaborative approaches with providers. As Western New York’s only locally based health plan, Independent Health works in partnership with physicians and providers to implement solutions to deliver quality and value in pharmacy benefits.

Our team of clinical pharmacists, using detailed analysis from national sources and our own expert analysts, continually monitor trends that enable us to proactively be in front of the changing environment. In addition, our dedicated pharmacy engagement team shares reporting with provider practices on quality and prescribing patterns compared to their peers. This direct interaction not only assures the providers have access to the prescriptions they need to treat their patients, but they also have access to data to help them deliver quality, cost-effective drug management.

Here are just two examples of how we are attempting to reduce prescription drug costs while still ensuring your employees have positive outcomes:

Use of biosimilars to achieve value

Biologics are types of medications or mixtures made from living organisms and used in the prevention, diagnosis, or treatment of cancer and other diseases. They include gene therapies, monoclonal antibodies and vaccines. Biosimilar products are FDA-approved medications that are extremely similar to their reference biologics. Because the cost of biologics is significantly expensive, Independent Health has required the use of biosimilars when available (for example, oncology drugs Avastin, Rituxin and Herceptin).  

Biosimilars for Humira became available in 2023, which has resulted in a significant discount over the reference drug Humira. In 2022, Humira represented the top drug spend at more than $30 million for our Commercial line of business. 

Results: Independent Health has contracted with biosimilar manufacturers which enables us to achieve greater savings. We have also added biosimilars for Humira to our formulary and educated physicians about their availability. It’s anticipated this will help lead to an overall plan savings of approximately $20 million per year.

Steps taken to eliminate off-label use of GLP-1s

GLP-1 agonists are a class of medications that mainly help manage blood sugar (glucose) levels in people with Type 2 diabetes. However, more recently, they’ve become popular as weight-loss medications. GLP-1s include the drug Ozempic, which is an injectable drug that costs roughly $1,000 per member per month. Ozempic is not approved as a weight-loss drug by the FDA; therefore, it is covered on Independent Health’s formulary only for the treatment of Type 2 diabetes. Nevertheless, some prescribers are prescribing this medication for their patients off-label for weight loss, which is causing drug shortages across the U.S. and Europe and increasing overall drug costs. In the first quarter of 2023 alone, Independent Health spent $600,000 on weight loss drugs.

To help manage costs and improve access for our members who need GLP-1 drugs to treat Type 2 diabetes, Independent Health implemented the following strategies and interventions in 2022: 

• Independent Health’s pharmacy system blocks coverage of prescriptions of these medications for members who do not have a diagnosis of diabetes in our system.
• Wegovy and Saxenda are two GLP-1s that Independent Health covers for weight loss with prior authorization. The prior authorization criteria was recently updated to require an in-person assessment and documentation of evidence-based lifestyle management programs and outcomes before coverage is granted.
• An ongoing review of prescribers who may be submitting incorrect information on claims and/or prior authorizations. 

Results: These interventions and strategies have prevented inappropriate use and a cost-avoidance of more than $12 million since being implemented in 2022.

Recap of 2024 New York State Legislative Session

Lawmakers in Albany have adjourned the scheduled 2024 Legislative Session after passing a late budget and over 800 bills. The session began in January with Governor Kathy Hochul introducing her Executive Budget Proposal, kicking off the budget process. Once the budget was finalized in late April, lawmakers shifted their attention to other legislative priorities, concluding their session in late June. With the November elections approaching – where every lawmaker in the Senate and Assembly is up for election – the attention has shifted towards campaigning, and it is not expected that lawmakers will reconvene this year.

During this year’s session, there were various health care provisions included in the budget as well as individual health care bills that passed both chambers. Lawmakers have until the end of December before bills need to be sent to the Governor for her signature or veto. The Governor may also ask for amendments to legislation as a requirement for her signature, also known as a chapter amendment, which lawmakers would have to address when readjourning next year.

Notable health care provisions approved within the budget include:

• Reimbursement for Mental and Behavioral Health – Starting January 1, 2025, Commercial insurers will have to reimburse mental and behavioral health services at least at the Medicaid rate for in-network providers.
• Insulin Cost-Sharing – Starting January 1, 2025, cost-sharing for insulin will be prohibited. This also applies to plans with high deductibles. 

Notable bills that passed both chambers but still require the Governor’s signature include:

• Copay Restrictions for Physical Therapy – This bill would prohibit health plans from imposing more than twenty percent of the total reimbursement to the provider of care for physical therapy services. 
• Epi-Pen Cost-Sharing – This bill would cap the amount a health plan can annually impose in cost-sharing for two epinephrine auto-injectors (i.e., epi-pen) at $100.
• Step Therapy Restrictions – This bill would prohibit step therapy protocols from requiring trying more than two drug before providing coverage and sets other standards for step therapy.
• Miscellaneous mandates – Requires coverage of scalp cooling treatment, breast cancer tattooing, exams for dyslexia, prenatal vitamins, donor milk and additional mammograms .