Medical scheme members should not assume that their schemes will pay for high-cost specialised drugs, even when the medical reasons for using them are compelling.
Medical science is progressing rapidly and new, expensive, remedies are becoming available, offering hope to those who had limited chances of survival on older treatments.
But recently, the Council for Medical Schemes Appeals Committee found that schemes had the right to consider the affordability of expensive treatments not regarded as the minimum level of care for prescribed minimum benefit (PMB) conditions.
Before making a decision on a cancer treatment, the Appeals Committee was told that schemes would have to raise contributions by 9.8 percent to pay for wonder drugs known as biologics for four different conditions. This would benefit 0.01 percent of the about eight-million-strong medical scheme population, the committee heard.
Medshield Medical Scheme had decided not to fund a R30 000-a-month treatment for a member with bone marrow cancer, a PMB condition. The Appeals Committee upheld the scheme’s decision.
This was despite the fact that the alternative treatment, currently considered to be the minimum level of care for the condition in terms of the PMB regulations, is likely to result in the member requiring a costly and high-risk bone marrow transplant.
The ruling makes no mention of the fact that stopping the expensive treatment could result in the member’s condition deteriorating and ultimately her death.
The stance taken by the Registrar of Medical Schemes and the Appeals Committee offers little hope to a pensioner member of Liberty Medical Scheme with the same cancer who planned to appeal a recent ruling by the registrar to the effect that her scheme can impose a 10-percent co-payment, amounting to R3 000 a month, on her medication.
The ruling against the pensioner contradicts an earlier ruling issued by the registrar’s office to the effect that the scheme could not impose the co-payment on her treatment.
The member, worried she may need to sell her home to fund her life-changing medicine, was recently hospitalised after an epileptic fit, brought on, her daughter believes, by the stress caused by her scheme’s decision to impose the co-payment.
These cases, involving members with chronic myeloid leukemia, have brought to the fore the broader issue of what new treatments schemes should pay for and what this will cost the medical scheme members.
Myeloid leukaemia causes a proliferation of myeloid cells in the bone marrow, and these cells accumulate in the blood. If untreated, the disease progresses from a chronic phase to an accelerated one and finally to a crisis stage, which is typically short-lived. The cancer affects 1.6 in every 100 000 people.
Sufferers can lead a life virtually free of the effects of the illness if they take a biologic, imatinib mesylate, commonly known as Gleevec.
Biologics are protein-based drugs derived from living cells cultured in a laboratory. They have revolutionised the treatment of certain cancers.
Gleevec kills off the cancer cells and stops the progression of the disease as long as the patient continues to take it. Produced by Novartis, it has radically improved the five-year survival rate of chronic myeloid leukaemia patients, and the South African Oncology Consortium (SAOC) regards it as the first line of treatment for this type of cancer.
All accredited South African oncologists belong to the SAOC, which issues guidelines on oncology benefits to schemes.
The alternative to taking Gleevec is to have chemotherapy, typically involving a medicine known as Hydroxyurea or Hydrea, which alleviates the symptoms of the disease, Dr Waldemar Szpak, the chairman of the SAOC, says. However, Hydrea does not stop the progression of the disease, and patients may need to have a bone marrow transplant – if they are able to find a donor.
Szpak says the costs of such a transplant can be up to R1 million, and there is a 16- to 40-percent chance that patients can die. In addition, not all patients are suitable candidates for a transplant, he says.
In the case that went before the Appeals Committee late last year, the Medshield member had taken Gleevec and had been reimbursed by the scheme from November 2010 until April last year.
Medshield stopped paying for the medicine – claiming, according to the ruling, that the state had ceased to offer Gleevec at its hospitals. The member complained to the registrar saying her condition was a PMB and that Gleevec is available in state hospitals.
The registrar ruled against the member and the member appealed.
The Appeals Committee dismissed the appeal based on a submission from the registrar’s Clinical Review Committee that the cost of Gleevec is “prohibitive” and schemes would need to increase your contributions to fund it. “The increase in premiums would result in poorer members dropping out of schemes because they can no longer afford coverage,” the ruling says.
In its submission, the Clinical Review Committee confirmed that Gleevec is highly effective.
It says “existing treatments are not as effective as Gleevec and if resources were not a constraint treatment could be considered a PMB level of care”.
It said the cost of providing Gleevec to all scheme members with chronic myeloid leukaemia would amount to between R107 million and R122 million, while the cost of providing Hydrea is between R24 and R28 million a year.
The cost of providing Gleevec rather than Hydrea would increase contributions, for you as a scheme member, by between R3.40 and R4 per month per beneficiary.
However, the Clinical Review Committee says Gleevec is not the only new treatment that needs to be considered as a minimum treatment for PMB conditions. A biologic called Mabthera needs to be considered for the treatment of diffuse large B-cell lymphoma, as does Herceptin for breast cancer and Gleevec for gastro-intestinal tumours after surgery.
The cost of making these biologics the minimum treatment for PMBs would raise your contributions by 9.8 percent a year, the review committee says.
Dr Monwabisi Gantsho, the Registrar of Medical Schemes, says the regulatory framework governing the PMBs is under review and will hopefully be completed by the end of this year.
“It is unfortunate that in the meantime beneficiaries must incur and be held liable for co-payments in relation to new treatment regimens such as the biologics for many cancers. What is also important right now is effective communication between schemes and their members in funding PMB treatments of beneficiaries,” he says.
PMB ETHICS CODE BEHIND DRYING UP OF FUNDING
A code of conduct for prescribed minimum benefits (PMBs) is the cause of a least one scheme changing its stance on paying for a costly cancer treatment in full.
A pensioner member of Liberty Medical Scheme suffering from chronic myeloid leukaemia was recently shocked to find the scheme had decided to impose a 10-percent co-payment on the Gleevec she is taking for the illness.
The member had been taking the medicine for a number of years and had had a ruling from the office of the Registrar of Medical Schemes in 2009, to the effect that her scheme had to pay for the medication in full and could not impose a co-payment.
The member complained to the registrar’s office again this year. In a letter to the member last month, the office notes: “Gleevec is currently not affordable to the industry and therefore not included in the PMB level of care.”
However, in 2009 the registrar’s office had ordered Liberty Medical Scheme to pay for Gleevec without any co-payment on the basis that Gleevec was available in state hospitals and that, for PMBs, schemes have to provide at least the same treatment as is available in state hospitals.
State patients continue to receive Gleevec. Novartis, the pharmaceutical company that developed the drug, provides it at no cost to eligible patients through its Gleevec International Patient Assistance Program. The drug is provided at eight public-sector hospitals through the Max Foundation, a United States-based non-profit organisation dedicated to improving the lives of people with rare cancers.
But, ironically for paying members of schemes that do not pay for Gleevec, the rules of the assistance programme exclude people with health insurance.
Dr Monwabisi Gantsho, the Registrar of Medical Schemes, says that in 2009 his office did not have information on the number of people who required biologics. It had therefore based its decision solely on the member’s clinical circumstances.
However, he says, last year the council analysed the financial impact of biologics on medical schemes.
According to Andrew Edwards, the executive principal officer of Liberty Medical Scheme, in July 2010 the Council for Medical Schemes, schemes and industry stakeholders drew up and published a code of conduct for PMB benefits.
The code states that when schemes consider the levels of treatment for PMB conditions that are available in state hospitals, the technology, medicine or service must have been purchased through a tender or buy-out process and not be available as a consequence of research, sponsored treatment trials or compassionate programmes.
Edwards says that after the code was published, Liberty Medical Scheme decided that paying for Gleevec in full for members with chronic myeloid leukaemia resulted in a disparity in the way in which benefits were distributed among members.
It therefore informed the affected patients that it would continue to pay for the medicine in full as a PMB only until the end of last year.
Members who want PMB cover now need to use the alternative treatment, while members of the scheme’s Platinum options can continue to enjoy 90 percent funding for Gleevec, but must pay the remaining 10 percent.
Edwards says Liberty cannot influence the price of Gleevec because the medicine is governed by the single exit price in terms of the medicine pricing regulations.
Asked about the cost implications for the scheme of giving members with chronic myeloid leukaemia Gleevec or treating them less effectively and possibly having to pay for a bone marrow transplant, Edwards said it is not possible to compare the cost-effectiveness.
He admits the costs are significant either way, but says the Council for Medical Schemes has acknowledged that Gleevec is unaffordable for schemes.
RAPID RISE IN COSTS OF SPECIALISED MEDICINES
Discovery Health Medical Scheme experienced a 15-percent-a-year increase in its oncology costs over the past three years, and last year had a 27 percent rise in the number of claims for specialised medicines for illnesses other than cancer.
The increase in claims for specialised non-oncology medicines, combined with a three-percent increase in the cost per script for these medicines, meant the cost to the scheme for specialised medicines and technologies rose 30 percent, Jonathan Broomberg, the chief executive officer of Discovery Health, says.
He says biologics are now used regularly in the treatment of rheumatoid disease, Chron’s disease, ankylosing spondylitis, ulcerative colitis, psoriasis vulgaris, osteoporosis, chronic renal disease and other conditions.
Discovery Health pays for biologics for the treatment of cancer from its oncology limits or, in the case of cancers that are prescribed minimum benefits (PMBs), from its risk benefits .
Broomberg says of Discovery Health’s two million beneficiaries, 25 000 are receiving treatment for cancer.
The average increase in the cost of treating these members has risen at almost 10 percentage points more than the average annual inflation rate of 5.5 percent over the past three years, and the scheme’s annual oncology bill has now reached R500 million.
Broomberg says Discovery covers the cost of Gleevec for chronic myeloid leukaemia patients in full on all its options.
He says the scheme’s decision to provide Gleevec as the PMB treatment for this cancer was based on the fact that the South African Oncology Consortium regards Gleevec as the first line of treatment for this condition.
Decisions on how to fund biologics for PMB conditions are based on evidence regarding the effectiveness of the treatment and the cost-effectiveness of the treatment relative to the alternatives, he says.
Treatments for which clinical effectiveness has yet to be proved are covered by oncology benefits paid in full up to R200 000 a year on Discovery’s lower plans and R400 000 a year on its higher plans. Thereafter a 20 percent co-payment applies.
Broomberg says 99 percent of members being treated for cancer are not paying co-payments.
He says benefits paid for members are increasing in value but because the vast majority of members pay in more than they get out, many believe that schemes do not offer them value.
Discovery’s statistics show that one out of every 10 members on the scheme derives five-tenths, or half, of the benefits paid.
Schemes need to balance the benefits paid to the very ill and to the healthy to ensure all members feel they get value for money.