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Top Three Drivers of Co-pay Program Inefficiency

Written by Al Kenney on 22 January 2018. Posted in Co-Pay Program Optimization

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Many brands would love to know how to get the most from their copay program. We have been helping brands optimize their copay programs for over six years and have published a series of white papers and executive briefings on the subject (all available for free here on our website). There are many places where you can get tripped up when it comes to developing your program. The issues that we have found that cause the most inefficiency are the following:

1) Face Value is too low

In a rush to match competition or get the price down as far as possible, many brands rush into a face value that is too low. Keep in mind that the face value is artificial - meaning that unless your cap is high many patients won’t actually pay that face value amount. Also keep in mind that as you reduce your face value, every claim gets more expensive - meaning you’ll be paying more for patients you already have. Going in the opposite direction (raising the face value) does the reverse. If you have a $10 copay/$100 cap and move to $15 face value, the savings can many times fund an increased cap level to $110 or perhaps $115 which in turn covers more patients to the advertised face value on your card. So you have to ask yourself what is more effective: Covering 70% of patients to $10 or 80% to $15? Many times the best option is the latter. Also, keep in mind that the more patients you attract at the higher level copays, the higher the incremental volume will be.

2) Calculating the impact of High Deductible health Plans on your Patient’s OOP Amounts

Before high deductible health plans became so prevalent, figuring out the OOP amount your average patient was paying was just a matter of asking your managed care department. Today with more than 40% of US Households in a HDHP, many will not have coverage for up to 6 months or possibly longer per year. When you are designing your copay program you must estimate your patients’ real OOP situation or else your program will miss the mark.

3) How you treat the Insured not covered patient in your business rules (INC)

The majority of insured but not covered (INC) patients are derived from those HDHP’s. These are patients who have commercial coverage but need to cover their deductible until that coverage kicks in. These are not cash patients although if you are not careful with your business rules they can be grouped with cash patient in your program. I believe they should be treated separately because unlike a cash patient who probably will not have coverage and will most likely leave the brand once your offer runs out, the INC patient will eventually regain their coverage and be a much more loyal patient to your brand. Giving INC patients some type of offer to help them through their non-coverage period will most likely be in your best interest.