Rx Decision: A Decision Support Tool for
Choosing Prescription Drug Plans for
Patients
Chris Anderson
Joey Fadul
Anupam Menon
Harold Terceros
Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
2
Context
• In 2009, the US spent $2.5 trillion dollars towards
healthcare, almost 17% of gross domestic product
(GDP) [1]
• One step to reduce the total expenditure was the
implementation of the Affordable Care Act, or
“Obama-care”
• Passed by Congress but currently being litigated
in the Supreme Court
• Constitutionality of un-insured fines
• Medicaid expansions, etc.
[1] Centers for Medicare & Medicaid Services-www.cms.gov
5/28/2016
3
Context: Affordable Care Act
• Affordable Care Act offered the following proposed
changes: [2]
• Incentives of $40,000 for physicians to use an Electronic
Medical Record (EMR) System
• Gradual discounts to covered drugs (brand name and
generic) to lessen the burden on patients in the
“doughnut hole”
• Creation of Heath IT (HIT) Extension Programs that would
facilitate regional adoption efforts
• Provision of funds to states to coordinate and promote
interoperable EMRs
• Accelerated construction of the National Health Information
Network (NHIN)
[2] www.healthcare.gov/law
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Context: Rx Costs
• R & D phase has large attrition rate during development [5]
• 5000 drugs screened
• ONLY 5 enter testing
• No income from this stage
• Approximately 70% of cost during first 12 years (completion of clinical
evaluations)
Proportion of Chronically Ill Who Have
Taken Fewer Rx Drugs Due to Cost
Percent
25
20
15
10
5
0
Private Insurance
Percent
5
Medicare/
Medicaid
20
[5] Rowberg, Richard. CRS Report for Congress, 2001
[6] Adapted from Center on an Aging Society, Georgetown University, 2004
5/28/2016
Uninsured
22
5
Context: Chronic Conditions in America
• In 2005, 7 out of 10 deaths were from chronic
conditions
• Heart disease, cancer, strokes accounts for 50%
of deaths each year [7]
• Population using more healthcare services, including:
• Physician visits, hospital care, etc. [6]
[6] Center on an Aging Society, Georgetown University, 2004
[7] Center for Disease Control (CDC)
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Context: Patient Experience
• The use of prescription drugs is a necessary component in
our healthcare industry in order to treat/control America’s
rising chronically ill population
• Patients are expected to make health related decisions
during encounters with their physician (mean
encounter duration is ≈ 20 minutes) [8]
• Doctor assesses patient’s concern and gives
recommended course of action
• Patient must make decision in the face of:
• Uncertainty in outcome of prescribed course of
action
• Complexity of insurance decisions (coverage)
[8] Medscape. Laurie Barclay, MD, 1 Nov. 2009. Web
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
8
Stakeholders: Cause & Effect
Physicians
Awareness of Rx Interactions
Or Availability
Prescriptions, Procedures,
Behavioral Changes
Awareness of Insurance
Coverage
Government
Regulated
Research &
Development
Finding Information
Patients Don’t
Pick Optimal
Uncertainty of
Prescribed Outcomes
Assess and Prescribe
Course of Action
Lawsuits
Patients
Will Ins. Cover
Next Action
Complexity in
Decision-Making
Trouble Comparing
Qualitative Data
Runaway Healthcare Cost
Negotiate Pricing w/
Insurance Co’s
PBM
Pharmaceutical Sales
To Physicians
PBM Negotiation
Districting
Plan
Pricing
Coverage
Offering
Availability
Physician Accepted
Large Attrition Rate
Pharmaceutical Companies
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Insurance Companies
9
Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
10
How Insurance Works
• Insurance is analogous to a bet between you and the
insurance company
• They are betting that they will take in more money,
in the form of premiums, than they will pay out in
benefits
• Policy is a contract that spells out what will be
covered and how much the insurance will cover of
your incurred medical costs
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Key Terminology
• Prescription Drug Plan (PDP)-Insurance plan used to
cover prescription drugs as part of Medicare Part D
• Doughnut Hole-Point at which PDP stops offering
coverage of prescriptions; then offering coverage again to
patients in “catastrophic coverage” phase of plan
• Premium-Amount paid each term (i.e. per month) to
purchase insurance
• Deductible-Amount initially incurred by patient before
insurance policy begins paying for covered expenses
• Cost Sharing-Co-payment amount-Set dollar amount for
services rendered. Co-insurance %-covered split between
patient and insurance, after deductible is met
• Formulary-Listing of covered drugs
[10] Centers for Medicare & Medicaid Services, 2012
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Medicare Terminology
• Medicare-A national health program for those under age
65 with certain disabilities, above 65, and anyone with end
stage renal disease (kidney disease requiring dialysis or a
transplant)
• Four parts to Medicare
• Part A-Hospital insurance-covers inpatient care in hospitals, skilled
nursing facilities, hospice, and home health care
• Part B-Medical insurance-covers doctor services, outpatient care,
durable medical equipment used in home healthcare
• Part C-Advantage plans incorporating Parts A, B, and D (if
elected); run by Medicare approved private insurance companies,
and may include extra benefits for an extra cost
• Part D-Prescription drug coverage-helps cover prescription costs
and protect against higher costs associated with certain
prescriptions, and run by Medicare approved private insurance
companies
[10] Centers for Medicare & Medicaid Services, 2012
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Medicaid Terminology
• Medicaid-A state administered health insurance
program available to certain low-income individuals
and families who fit into a recognized eligibility group.
• Specific requirements must be met (vary from state to
state):
-Age
-Pregnancy Status
-Disability
-Blindness
-Income
-Resources
-U.S. Citizen / Lawfully admitted immigrant
• Dual Status-Those under age 65 who are eligible for
Medicare because they receive Social Security or
disability from the Railroad Retirement Board
[11] Disabled Medicare Beneficiaries by Dual Eligible Status: California, 1996-2001 June F. O’Leary, Ph.D.,
Elizabeth M. Sloss, Ph.D., and Glenn Melnick, Ph.D.
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Medicare Part D
Pros
• Commonly Used Drugs
• Generic or Brand Name
• Mail Order (larger supply)
• Out-of-pocket costs
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Cons
• # of Insurance Providers
• Formulary Listing
• Drug Rates
• Plan Changes
• Out-of-pocket costs
15
Medicare Part D Out-of-Pocket Breakdown
Medicare Part D Cost Responsibility
Cost Responsibility Split (%)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Deductible
Medicare
Patient
0%
100%
Cost Sharing
Doughnut Hole
75%
0%
25%
100%
Prescription Drug Plan Cost Stage
Catastrophic
Coverage
95%
5%
[10] Derived using Centers for Medicare & Medicaid Services, 2012
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Medicare Part D Out-of-Pocket Breakdown
Medicare Part D Cost Breakdown
(Example Using $20,000 in Drug Cost)
$25,000.00
Dollars ($)
$20,000.00
$15,000.00
$10,000.00
$5,000.00
$Patient
Total Drug Cost
Cumulative Patient Outlay
Deductible
Cost Sharing
$320.00
$320.00
$320.00
$652.50
$2,930.00
$972.50
Doughnut
Hole
$3,727.50
$6,657.50
$4,700.00
Catastrophic
Coverage
$667.13
$20,000.00
$5,367.13
Prescription Drug Plan Cost Stage
[10] Derived using Centers for Medicare & Medicaid Services, 2012
5/28/2016
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
18
Problem Statement
Patients are not able to make optimal health decisions
regarding their physical AND financial well-being due to:
• High level of complexity in the options with which
they are faced
• Insurance options and available coverage
• High level of uncertainty in the prescribed course of
action
• Prescriptions/Procedures
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Need Statement
A decision support tool (DST) is needed to consolidate
PDP information
• Draw consolidated information across insurance
carriers
• Minimize patient time spent on initial research
• Answer basic questions about Medicare plans,
products, and the companies entrusted to serve
the general public
5/28/2016
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
21
Task Analysis: Preliminary
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22
Task Analysis: Decision Support Tool
Physician Prescribed Course
of Action
Patient
Condition
Personal
Attributes
Decision Support
Tool
Insurance Plan
Preferences
Public Use
Files
5/28/2016
Ranked List of PDPs
Graphical Interpretation
of Rx Cost vs. PDP cost
Prescription
Drug Plans
23
Decision Support Tool: Walkthrough
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
25
Primary Data Source
• Center for Medicare/Medicaid Services
• Public Use Files (PUF) containing de-identified
information for chronic diseases from year 2008
• Oracle 10g XE
• Converted PUF data from .csv format into Oracle
database
• Manipulate and sift through data with SQL queries
in order to obtain useful data
• Lost roughly 25% of data due to lack of
Medicare Part D data
• End result: Medicare Part D data from 23.7
million beneficiaries
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PUF Data Breakdown
• PUF data provides information on patient profiles
consisting of
• Age ranges (5 year cohorts)
• Whether or not the patient has a given chronic
illness
• Diabetes, Heart Failure, Cancer, etc.
• Whether or not a patient is dual eligible
• Information on each profile includes
• Prescription drug costs per year
• Number of prescriptions per year
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Decision Support Tool: Sample Results
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Decision Support Tool: Sample Results
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Decision Support Tool: Sample Results
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Decision Support Tool: Sample Results
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Decision Support Tool: Sample Results
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Decision Support Tool: Sample Results
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“Doughnut Hole” and “Catastrophic” Coverage
Doughnut
Hole
Catastrophic
Range
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
35
Weight Calculation
• Mean Reciprocal Rank (MRR) is a statistical method
to measure performance of the predicted results
n
1
∑Rank
i
MRR = i =1
# ofRanks
• MRR used in tool for weight calculation where users
rank their personal preferences of insurance
attributes
• Tier I (coverage attributes)
• Plan Cost, Previous Experience, Formulary Choices
• Tier II (plan cost breakdown)
• Deductible, GAP Coverage, Cost Sharing, Premium
Payment
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Utility Function
• Insurance plans ranked in terms of Plan Cost,
Formulary Choices, and Previous Experience
3
CoverageUtility = Σ [WCoverageAttribute •U CoverageAttribute]
n =1
• Plan Cost is further broken into Monthly Premium,
Deductible, Cost Sharing, and GAP Coverage
4
CostUtility = Σ [WCost Attribute •U Cost Attribute]
n =1
• Utility function determines ranking of 30 Virginia
based Medicare Part D Prescription Drug Plans
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Sensitivity Analysis
• According to the customer’s preferences, each
attribute was ranked and used to solve the weights
• The following formula was used to solve the
sensitivity analysis for weights of the ranked PDPs:

o
w
j
w j  1  wi  
o

w

k

 k i

 , j  i



• The weights were calculated for the attributes
important to the user in order to rank the suitability of
insurance plans
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Sensitivity Analysis
• There were three combinations under which the
sensitivity analysis was conducted
• When the insurance/cost attribute ranking was
equally distributed
• When the insurance/cost attribute ranking was
incrementally distributed
• When two of the insurance/cost attribute rankings
were tied
5/28/2016
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
40
Simulation
• Crystal Ball was used to perform Monte Carlo
simulation on the suggested insurance plans
• Enters random values as inputs based on
assigned distributions
• Discrete Uniform Distributions
• Random # generation for health profiles from
PUF dataset
• 10,000 trials
Resulted in multiple plans remaining in top 10
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Simulation: Outcome
• Sensitivity # 30 Ranked PDP-Envision Rx Plus Silver
• Never makes the top 10 by reducing the price
• Ranked # 10 if formulary increases from 2,446 to 6,395
• (2.6 times its original formulary listing)
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Simulation: Outcome Mitigation
• Additional criterion defined by user; maximum
monthly premium for insurance plan
• Resulted in wider range of plan rankings
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Simulation: Estimated User Savings
• 95% Confidence Interval: $77.66 to $1877.99
• Range: -$332.40 to $1978.10
• Estimated Average Savings: $1,243.00 w/
50% saving more than $1,389.74 per year
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
•
•
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•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
45
Usability Test: Human Subjects Review Board
• The goal of the Human Subjects Review Board
(HSRB) is to protect the rights of human research
subjects [11]
• Of the six exemptions to perform human studies
without prior approval, item four qualified the
following study to be done without approval of the
HSRB
[12] Office of Research Subject Protections-http://research.gmu.edu/ORSP/HumanSubjects.html
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Usability Test: Design
• Usability test designed to evaluate
• Ease of use of tool (intuitiveness)
• Understandability of tool
• Was administered to subjects with minimum age of
55 years old
• Subjects were asked to
• Participate in timed run through decision tool
• Complete timed checklist consisting of 8 questions
regarding their results
• Find costs, interpret graphical output, etc.
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Usability Test: Hypotheses
• Total time to use DST
• Ho: μ = 20 minutes
• HA: μ > 20 minutes
• Evaluation of checklist
• Ho: μ = 2 incorrect answers
• HA: μ > 2 incorrect answers
• Time to complete checklist
• Ho: μ = 5 minutes
• HA: μ > 5 minutes
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Usability Test: Results
25
Time to Complete
Decision Tool
n = 11
20
15
12.39
Time to Complete
Results Checklist
Expected
Actual
10
8.43
Number of Errors in
Checklist
5
1.09
0
1
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2
3
49
Usability Test: Results
Total time to use decision support tool
Ho: μ = 20 minutes
HA: μ > 20 minutes
T-test Results:
to = -10.504 < t.05, 10 =1.812
DO NOT REJECT Ho
Evaluation of checklist
Ho: μ = 2 incorrect answers
HA: μ > 2 incorrect answers
to = -3.178 < t.05, 10 = 1.812
DO NOT REJECT Ho
Time to complete checklist
Ho: μ = 5 minutes
HA: μ > 5 minutes
to = 3.713 > t.05, 10 = 1.812
REJECT Ho
Since we reject estimated time to complete the checklist, but not the amount
of errors in results interpretation and time to complete the tool, we can
conclude that the tool is easy to use, results are easy to interpret, but the
results tab is too complex to interpret given a 5 minute time limit.
• If the time to complete the checklist was increased to 6 min, 30 sec we
would not reject the null hypothesis
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Agenda
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
•
•
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•
•
•
•
•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
51
Recommendation
• We recommend the designed DST be implemented
in the waiting rooms of physician offices; given the
ease of use, and relatively quick time to complete the
tool
• Secondly, we recommend the DST be implemented
on insurance broker websites in order to give user’s
an unbiased, no obligation estimate…allowing the
user to compare all plans in their selected region;
thus breaking the barrier to the insurance
industry
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Future Work
•
•
•
•
•
•
5/28/2016
Implement prescription lookup system
Medicare Part C (Advantage Plans)
Special Needs Plans (SNPs)
Expand beyond Virginia
Expand data files to include health outcome data
Dynamic health behavior for patients
53
Agenda
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•
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Context
Stakeholder Analysis
Insurance Terminology
Problem Statement
Needs Statement
Decision Support Tool
•
•
•
•
•
•
•
•
•
5/28/2016
Task Analysis
Video Description
PUF Dataset
Output
Method of Analysis
Monte Carlo Analysis
Usability Test
Recommendations/Future Work
Project Management
54
Work Breakdown Structure (WBS)
HCAS Project
1.0
Research
2.0
Design
4.0
Analysis
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3.0
Management
5.0
Communicate Results
55
Budget Breakdown
• Budget calculated with a rate of $60 per hour
• Hours determined by task length from Gantt chart and
which group members will working on each task
Task
Total Hours
Total Cost
1.0 Research
65
$3,900
2.0 Development/Design
622
$37,320
3.0 Management
115
$6,900
4.0 Analysis
242
$14,520
5.0 Communicate Results
296
$17,760
Total Project
1340
$80,400
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Earned Value and Hours Management
Earned Value Tracking
1.20
% Complete
1.00
0.80
Earned Value
0.60
Estimated
Earned Value
0.40
0.20
0.00
0
5
10
15
20
25
30
Time (Weeks)
• Today
• SPI = 1.05
• CPI = 1.52
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1600
1400
Hours Worked
• Beginning of
Semester
• SPI = 0.67
• CPI = 1.21
Hours Management
1200
Planned
Hours
1000
800
Actual
Hours
600
400
200
0
0
5
10
15
20
Time (Weeks)
25
30
57
Gantt Chart
• Start of Fall semester through Briefing # 2 (October,
24)
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Gantt Chart
• Briefing #2 (October, 24) through Faculty
Presentation (December, 2)
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Gantt Chart
• Spring Semester through SIEDS Competition (April,
27)
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Questions?
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References
[1] Centers for Medicare & Medicaid Services-www.cms.gov
[2] www.healthcare.gov/law
[3] Congressional Budget Office-Technological Change and the Growth of Health
Care Spending
[4] www.globalsecurity.org-Russian Military Budget
[5] Rowberg, Richard. CRS Report for Congress: Pharmaceutical Research and
Development: A Description and Analysis of the Process, 2001
[6] Center on an Aging Society, Georgetown University, 2004
[7] Center for Disease Control (CDC)
[8] Medscape. Laurie Barclay, MD, 1 Nov. 2009. Web
[9] Testimony of David A. Balto To the Committee on the Judiciary, Subcommittee
on Antitrust, Competition Policy and Consumer Rights United States Senate,
Dec. 2011
[10] Centers for Medicare & Medicaid Services, 2012
[11] Disabled Medicare Beneficiaries by Dual Eligible Status: California, 1996-2001
June F. O’Leary, Ph.D., Elizabeth M. Sloss, Ph.D., and Glenn Melnick, Ph.D.
[12] Office of Research Subject Protectionshttp://research.gmu.edu/ORSP/HumanSubjects.html
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BACKUP SLIDES
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Context: Collapse & Increased Spending
The Soviet Union’s collapse due to military spending occurred at a point where their
military expenditure reached $33 billion/year [15-17% of its GDP], but western
authorities believed this only reflected the operations and maintenance costs, and that
the expenditure was actually double the amount reported [due to weapon/ship building
being coded as “free goods to the Ministry of Defense”]. [4]
[3] Congressional Budget Office-Technological Change and the Growth of Health Care Spending
[4] www.globalsecurity.org-Russian Military Budget
5/28/2016
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Context: Rx Costs
• Correlating the two graphs show that
almost 70% of cost is reached by year
12 in R&D process
• ~34% cost due to clinical
evaluations
• Rx attrition rate during development
• 5000 drugs screened
• ONLY 5 enter testing
• No income from this stage
[5] Rowberg, Richard. CRS Report for Congress: Pharmaceutical Research and Development: A Description and
Analysis of the Process, 2001
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Context-U.S. Percent Excess in Prescription Pricing
[8] Socolar, D., Sager, A. Boston University School of Public Health. Calculations from Patented Medicine Prices
Review Board annual reports (2000 & 2002).
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Insurance Terminology
•
•
•
•
•
•
•
•
Individual Coverage-Most expensive; offered to people who don’t
have employer coverage
Group Coverage-More cost effective due to the larger number of
people in the group. Typically seen in employer context
Premium-Amount paid each term (i.e. per month) to purchase
insurance
Provider-Insurance company providing coverage in return for
premium payment
Co-Pay-Fee associated with services rendered
Deductible-Amount initially incurred by patient before insurance
policy begins paying for covered expenses
Co-Insurance-Amount of covered split between patient and
insurance, after deductible is met
Reasonable & Customary Charges-Amount that insurance is
willing to pay for a procedure performed
[10] Centers for Medicare & Medicaid Services, 2012
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Medicare Part D
• Stand Alone Plan:
• Prescription Drug Plan (PDP)-additional plan to
cover prescription drugs
• Packaged Plans (Medicare Approved/Privately
Insured Plans):
• Advantage Plans (Medicare Part C)-Packaged
with Part A/B, and offer further benefits for extra
cost
• Special Needs Plans (SNP)-Packaged with Part
A/B, and cover chronic conditions specifically
• Has emphasis on the needs of a chronic
condition
[10] Centers for Medicare & Medicaid Services, 2012
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Stakeholder Diagram
General Public
Voting
Patients use Medicare,
Made Available by Gov’t
Patients
Government Regulators
FDA
Patients Seek
Information Alone
Regulations
on Drugs
Medicare
Doctors
FDA Accepts or
Rejects Drugs
Contracts w/ Private
Ins. Co’s
Private Insurance Companies
Special Needs
Plan
Pharmaceutical Companies
R&D
Approach Insurance & Doctor’s
for Pricing Structures
Prescription
Drug Plan
PBM
[9] Adapted from Deloitte, Life Sciences Division
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Stakeholders: Pharmacy Benefit Managers (PBMs)
•
The PBM market has an expensive history of lawsuits brought on by unethical
conduct
•
Between 2004-2008, a coalition of 30 state Attorneys General have brought cases
against the “big three” PBMs securing over $370 million in damages and penalties
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•
Fraud
•
Misrepresentation to plan sponsors, patients, and providers
•
Unjust enrichment through secret kickback schemes
•
Failures to meet ethical and safety standards
Case
Damages
Reason(s) for
United States v. Merck & Co., Inc.
$184.1 million
Government fraud, secret rebates, drug switching, and
failure to meet state quality of care standards.
United States v. AdvancePCS (now
part of CVS/Caremark)
$137.5 million
Kickbacks, submission of false claims, and other rebate
issues
United States v. Caremark, Inc.
Pending
Submission of reverse false claims to governmentfunded programs.
State Attorneys General v. Caremark,
Inc.
$41 million
Deceptive trade practices, drug switching, and
repacking.
State Attorneys General v. Express
Scripts
$9.5 million
Drug switching and illegally retaining rebates and
spread profits and discounts from plans.
70