Tag Archives: opioids

Opioid prescription patterns affect risk scores

Opioid prescribing nationwide peaked in 2012 at over 80 prescriptions per 100 persons. Between 2012 and 2016, the prescribing rate decreased by almost 20%. Even after this decline, 19% of the U.S. population filled at least one opioid prescription during 2016.

As opioid prescribing declined, many doctors switched to other pain relief drugs. The change in prescribing patterns has potential implications for risk adjustment, because some of the drugs now being used for pain relief were previously flagged in pharmacy-based risk adjustment models as associated with high-cost conditions such as multiple sclerosis.

This brief by Christine Mytelka, Melanie Kuester, Colin Gray, and Lucas Everheart provides data on the decline in opioid prescribing and the increased use of other non-opioid pain relief drugs. Additionally, it addresses the corresponding effect that changing prescribing patterns may have on evaluating population health and risk-adjusted payments in risk-based managed care programs.

Diagnosed opioid use disorder by payer

Over 25 million American adults report suffering from chronic pain on a daily basis, and a range of adverse health outcomes accompanies their pain. Beginning in the early 2000s, opioid analgesics were increasingly seen as a solution to the problem of under-treatment that had been a concern in the 1990s. From 1991 to 2011, the number of opioid prescriptions filled at U.S. retail pharmacies nearly tripled, increasing from 76 million to 219 million per year, though those numbers have started to decrease since the peak in 2011.

Despite the recent decrease in prescriptions of opioids, the human toll of the opioid crisis has continued to intensify. Illegally acquired heroin and synthetic opioids such as fentanyl have become the leading cause of overdose deaths. Opioid overdose deaths are now the single largest factor slowing the growth in U.S. life expectancy, and if current trends continue, opioid overdose deaths could outnumber suicides by 2019.

In this article, Milliman’s Stoddard Davenport and Katie Matthews help explain the scale of the opioid epidemic within the insurance industry.

Based on a sample of over 42 million people with commercial insurance, nearly 1.3 million Medicare beneficiaries, and a Kaiser Family Foundation analysis of Medicaid beneficiaries in 49 states, we estimate that over 1.5 million insured Americans were diagnosed with an opioid use disorder in 2015 (the most recent year available). Figures 3 and 4 summarize these findings by payer. These results (and others presented throughout this report) have been age- and area-adjusted to be representative of the U.S. insured population as of 2015 using U.S. Census Bureau data.12

Figure 3: Diagnosed opioid use disorder by payer, 2015 (or most recent year)

Commercial
(2015)
622,000
Medicare
(2015)
239,000
Medicaid
(2013)
642,000

We found that about 41.4% of those with diagnosed opioid use disorder were commercially insured, 15.9% were Medicare beneficiaries, and 42.7% were Medicaid beneficiaries. Overall, the diagnosed prevalence rate of opioid use disorder was 3.28 per 1,000 for the commercially insured, 5.39 per 1,000 for those with Medicare, and 8.90 per 1,000 for those with Medicaid. Across all insurance payers, we found that the prevalence of opioid use disorder was 4.91 per 1,000.

Figure 4: National estimates of opioid use disorder diagnosis by payer, 2015 (or most recent year)

Payer Diagnosed prevalence per 1,000 Total diagnosed nationally No. (%)
Commercial (2015) 3.28 622,000 (41.4)
Medicare (2015) 5.39 239,000 (15.9)
Medicaid (2013) 8.90 642,000 (42.7)
Total 4.91 1,503,000 (100.0)

The authors also highlight the rate of opioid use disorder by age and sex.

Rates of opioid use disorder varied widely by age and sex, with men generally experiencing higher rates of opioid use disorder through age 65, and women experiencing higher rates from 66 and older. Rates were quite low through childhood, followed by a marked increase in the late teen years, peaking in the mid-20s at a rate of 5.47 per 1,000 for women (at age 24) and 10.00 per 1,000 for men (at age 25). Rates showed a sharp drop-off in the late 20s, followed by a rise to another peak in the mid-30s of about 3.76 per 1,000 for women (at age 35) and 6.37 per 1,000 for men (at age 36). From the late 30s through age 64, the gap between men and women closed and both experienced prevalence rates hovering between 3.50 to 4.00 per 1,000 through retirement age. Opioid use disorder rates for Medicare beneficiaries were generally higher for women than for men, and tapered off with advancing age. Comparable data for Medicaid were not available.

Plan sponsors must consider several strategies to manage pharmacy costs

In recent years, pharmacy costs have been a hot topic. Plan sponsors must remain vigilant and stay current on industry strategies used to manage pharmacy costs. In this article, Milliman consultant Ajanthan Balasinkam outlines a number of important considerations for plan sponsors, including plan design, contracts, the opioid crisis, and the specialty pipeline.

Allocating health plan costs in the coming year

As 2018 gets underway, it is important for employers and health plans to consider what healthcare costs could lie ahead in the new year. Keeping the following issues in mind while working toward potential solutions will be helpful in managing costs.

Opioid abuse
According to the U.S. Department of Health and Human Services, the number of opioids prescribed since 1999 has nearly quadrupled and the increase in prescriptions has resulted in an increase in opioid abuse. As a result, health plans are beginning to take steps to curb that abuse. Plans can look to cover or encourage the use of painkillers that are less likely to be abused, such as lower-dose opioids or those that are not easily crushed or otherwise changed. As an example, a number of insurers have indicated that they will no longer cover OxyContin beginning in 2018. In addition, plans may want to consider contracting with substance abuse counselors if their populations have addiction problems or the potential for them. Milliman has analyzed a large commercially insured database and looked at variables such as demographics, mental health, physical health, etc., which can be used for predictive purposes in order to determine how susceptible a population may be to opioid abuse.

Hospital consolidation
In 2016, for the first time ever, less than half of physicians practicing in the United States were independent, according an American Medical Association study. Physicians who work with hospitals are able to charge a facility price at a physician’s office, which has resulted in an increase in hospital costs and significant discrepancies in price for the same services. Therefore, price transparency, coupled with quality information, becomes imperative for the consumer (the employer that provides health benefits and the employees who receive those benefits). There are various vendors who can offer to the consumer the ability to “shop” for surgical procedures and/or physicians based on both price and quality metrics. Additionally, plans can offer narrow network designs, which can incentivize high quality and low price (by “carving out” expensive hospitals that don’t offer higher-quality services).

Uncertainty of the ACA
The Patient Protection and Affordable Care Act (ACA) remains the law of the land, but there continues to be uncertainty around the legislation. The uncertainty is mostly in the individual market, but large losses to insurers and increasing premiums for consumers would have an impact on the group market as well, as healthcare for individuals and groups are intertwined. With signing of the recent tax bill into law, the individual mandate will be repealed in 2018, which will likely result in healthier individuals leaving the market—4 million in 2018 and 13 million by 2027, according to the Congressional Budget Office (CBO)—and premiums increasing for those remaining by an average of more than 10%, according to the CBO. Congress is also continuing to consider ways to repeal the employer mandate, which would have a more direct impact on the group market.

Alternative payment strategies
Plans will also continue the trend of considering alternative payment strategies. The ACA introduced the idea of accountable care organizations (ACOs), which incentivize quality care through shared savings based on trend guarantees. ACOs are usually facilities or professional organizations, but there are also prescription drug shared savings programs that offer trend guarantees, and we expect them to gain some popularity in the coming year. Prescription drug shared savings programs are a unique way to achieve plan savings, in that they align the incentives of the pharmacy benefit manager (PBM) and the plan, as both are focused on controlling costs. In a typical prescription drug contract arrangement, the PBM can offer pricing discount and rebate guarantees without necessarily needing to be concerned with the average wholesale price of the drugs.

The above issues are just a few of what could potentially be on the horizon for 2018 and beyond. We will continue to monitor these issues and others as we begin the new year.