Today, an amazing story about how one state’s insurance group is paying patients to leave the country to find better deals on prescription drugs. Full measure’s Scott Thuman talks with the head of Utah’s public employee health plan to see how it works.
Scott Thuman: In the shadow of the Rockies, Salt Lake City is a glowing example of economic growth, low unemployment and a billion-dollar budget surplus. But that doesn’t mean leaders ignore the chance to save cash where they can, especially when it comes to healthcare. And since some Americans were already crossing into Mexico to buy certain prescribed drugs at a fraction of the cost paid inside the U.S., Chet Loftis, who leads the state’s public employee health plan decided, it could work for some of its members.
Chet Loftis: There was a bill that was passed two years ago that essentially said that, whenever a member participates in savings opportunities, we ought to give some of that money back. So it got us thinking about it, and in healthcare, there's so much variance in costs, and one of those areas, in particular, is drugs.
Scott: And some of the most expensive are used to treat MS, rheumatoid arthritis, and crohns, costing on average $50,000 per patient a year. Which led Loftis to not only pay for members’ travel but offer them a personal bonus of $500 each time they go. You see while importing drugs is illegal, it’s not illegal to leave the United States and bring back a three month supply, as long as it’s for personal use.
Loftis: We're talking about, over the course of a year, saving the state and other employers about $25,000 if people participate. And that is after we put them on a plane, with a companion on the plane, send them down there, pick them up at the airport, make sure they get to the location through the border, receive the drugs, see a doctor while they're there in terms of connection with the drugs, and then coming back over the border.
Scott: And on top of that.
Loftis: That's right.
Scott: They're getting money.
Loftis: Yeah. They get $500 currently, and we're looking at actually increasing that a little bit.
Scott: It soon he says, maybe a thousand dollars.
Scott: That seems like a light bulb moment where the light bulb goes on and you say, "Wait a minute. We can save a lot of money by sending them to Mexico, buying the drug there, bringing them back. And we'll even be saving so much, we can give them $500 or more just to do it."
Loftis: These, again, are drugs that not a lot of people take. We have about 170,000 people that we cover. And of that, those 170,000, about 400 have conditions that would be eligible for these drugs. And we're, of course, very selective in the drugs that we're talking about. They have to be high-cost drugs. It has to be safe for people to be able to travel for these drugs.
Scott: How much are you saving right now?
Loftis: So we have about 20 people of those 400, so we've barely scratched the surface. We've been doing it for about a year. Our savings to this point are about $250,000. We would anticipate that with the 20 people that are currently in, assuming we didn't have any others that participated, we'd be looking at about a half a million dollars.
Scott: What about a reaction from other providers, other groups similar to yours who are overseeing benefits and plans? Anyone saying, "Tell us more about this thing you are doing?"
Loftis: Everybody asks.
Scott: Everyone asks.
Loftis: Everybody asks. Everybody wants to know how we're doing it and all those kinds of things. And then they have to evaluate it from their own perspective from there.
And it's not just Mexico, they're also now offering members the chance to fly to Vancouver Canada where there's a pharmacy right at the airport.