All brands should strive to get the most from their copay program. We have been helping brands optimize their copay programs since copay began in the industry. 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:
1) Your offer 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 low, too low. Some start at $0 – I’m hoping this is the bottom but who knows? Keep in mind that the face value is artificial – meaning that unless your associated cap (maximum payout) is high enough, many patients won’t actually pay that face value amount.
Also keep in mind that as you reduce your face value, every one of your claims gets more expensive – meaning you’ll be paying more for patients you already have. Raising the face value can in many cases have many positive impacts. If you have a $10 copay/$100 cap and move to $15, the savings produced on claims can many times fund a $25 increase in cap level which may increase your coverage rates for patients who will actually pay your face value.
You have to ask yourself what is more effective: Having your offer cover 70% of patients when your offer is $10 or 80% at $15? Many times, the best option is the latter. Also, keep in mind that the more patients you attract at the higher copay levels, the higher incremental volume you will generate.
2) Incorrectly 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. When you are designing your copay program you must estimate not only your commercial contracting coverage but also how those HDHP’s will impact your patients’ OOP situation. Not properly forecasting this will cause your program expenses to greatly exceed your allotted budget number.
3) Treating “insured not covered” (INC) and cash patients the same in your business rules
Brands normally group 3 different types of patients together in their copay program business rules.
- “Insured not covered” (INC) patients have coverage but are in a HDHP and are subject to an annual deductible. These are patients who have commercial coverage but need to cover their deductible before that coverage kicks in.
- “Insured not on formulary” (INF) patients are insured but your brand is not covered under their insurance plan. These are patients who may never be covered.
- Cash patients have no insurance.
I believe cash patients and (INF) patients should be grouped together and should be excluded from your program because they will not have coverage and will most likely leave the brand once your offer runs out. In contrast, the INC patient will eventually regain their coverage after they have met their deductible, which will lower the cost of your overall program. Giving INC patients some type of offer to help them through their non-coverage period will most likely be in your best interest.