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Simple Steps Can Save Health Plans Big Dollars: Study

North Carolina hospital cut costs without raising members' expense, study found

TUESDAY, Aug. 7, 2007 (HealthDay News) -- A combination of four measures helped one U.S. hospital's health plan control prescription drug costs and save more than $6.6 million over three years, according to a study published Aug. 7 in the American Journal of Managed Care.

The study, from Wake Forest University Baptist Medical Center, in Winston-Salem, N.C., found that this multi-pronged approach not only helped control prescription drug costs, but also preserved plan members' use of medications for chronic conditions.

The Medical Center, which includes Wake Forest University Health Sciences and North Carolina Baptist Hospital, has more than 11,000 employees.

"One reason for this success may be that the plan was careful to avoid shifting costs to its members," lead author Dr. David P. Miller, assistant professor, Section of Internal Medicine, Wake Forest University School of Medicine, said in a prepared statement.

"Whenever a drug was changed to a more expensive tier or removed from the formulary, the members' out-of-pocket costs were the same or less if they changed to the less expensive alternative," Miller said.

The four measures used by the Medical Center's health plan included: reclassifying select brand-name drugs to non-preferred status (which resulted in about half of the annual savings); the removal of non-sedating antihistamines from the prescription drug formulary; the introduction of pill-splitting; and limiting quantities of select medications not intended for daily use.

"The study demonstrated that much of what we spend on prescription drugs is wasteful, and that other institutions, hospitals, health plans, state and federal governments can learn from our experience," co-author Dr. Curt D. Furberg, professor of public health sciences, said in a prepared statement.

More information

The American Academy of Family Physicians has more about prescriptions and insurance plans.

SOURCE: Wake Forest University Baptist Medical Center, news release, Aug. 7, 2007
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