Employers Eye CER To Improve Employee Health, Lower Costs – NPC Survey

Large employers and those companies that self-insure are expecting that comparative effectiveness research will lead to better employee health and help companies achieve their cost-management goals, according to the results of a survey released June 21 by the National Pharmaceutical Council.

“A large majority of respondents (85%) indicated that CER research will have at least ‘moderate’ potential to improve health benefit decisions, and nearly one- quarter expect the potential to improve decisions is ‘very strong,’” a white paper issued by NPC covering the survey results states. “Interviews revealed a pragmatic expectation among employers, coalition leaders and benefit consultants that CER will provide information to make sure health investments are focused on higher value treatments.”

“I don’t think for the most part that people in the policy and research world think enough about employers as important stakeholders," survey firm exec comments.

The survey was conducted on behalf of NPC by The Benfield Group in December 2010 with 75 companies, of which 47% had more than 20,000 employees.

Chuck Reynolds, president of The Benfield Group’s employer practice, said these results show the potential power of employers as a means of applying the knowledge gained through CER research.

These survey results are “helping to recognize that the employer can play a very constructive role in activating CER outcomes,” Reynolds told “The Pink Sheet.” “I don’t think for the most part that people in the policy and research world think enough about employers as important stakeholders. I think this report says not only are they interested, but they are willing and able to put these results to work.”

John Gordon, partner at pharmaceutical and biotechnology industry consulting firm Putnam Associates, said the results of the survey were expected.

“A lot of what is in this [white paper] is pretty consistent with what you would expect,” he said. “The fact that employers are highly interested in this is very logical. Employers are really the ones footing the bill for the majority of health care costs here.”

Drugs Are Key CER Area For Employers

One aspect of CER that the survey examined was how employers used data. More than 90% of those surveyed said information was used to develop an overall health management strategy, as well as in formulating medical and pharmacy benefit strategies.

Nearly three quarters (72%) of respondents, according to the report, “indicated that they use data in determining coverage and reimbursement for specific drugs, and only about half use data in decisions regarding diagnostic tests, biologic therapies and surgical procedures.” The report does not detail further the employers' views on drugs and biologic therapies.

Respondents defined “using data” as relying on their health plans and pharmacy benefit managers to analyze data about specific treatments and recommendations from them “are then incorporated into a broader planning process in which employers (often working with assistance from benefit consultants) formulate their overall health management strategy and benefit plan design, which are ultimately implemented through their health plan and PBM partners.”

Despite CER being a lightning rod for controversy as some fear it will be used as a way to limit coverage, Reynolds did not interpret the findings as employers looking for ways to determine what does and what does not get covered.

“The first thing people need to realize is that comparative effectiveness research results are not going to be black and white,” Reynolds said. “They are going to be very much shades of grey. Unless something came out and said this treatment kills people, [employers] are not likely to be flicking switches on and off.”

One subject left out of the survey was any discussion on cost effectiveness, something Gordon sees as needing some attention, particularly when more expensive treatments are found to have the better outcomes. He cited oncology specifically, where an expensive treatment may only extend life for a few months, creating an ethical dilemma for employers because it will ask them to place a value on life.

“That’s the tough decision that employers need to make,” Gordon said. “The issue and the real problem is how do you drive comparative effectiveness to deal with that question. I think that’s the big unanswered piece in all of this.”

Addressing cost directly in the context of comparative effectiveness research remains a sensitive subject, but some observers see this as something that will have to be addressed if CER is going to play a meaningful role in controlling health care spending (Also see "Cost Quietly Remains The 800-Pound Gorilla In The CER Room" - Pink Sheet, 24 May, 2010.).

By Gregory Twachtman