As specialty drug costs skyrocket, Anthem tests new idea for curbing 'shock' claims

Anthem headquarters
Anthem is taking aim at high-cost claims in Kentucky. (Anthem)

As the number of high-cost treatments continues to grow, Anthem is launching a new program in Kentucky that aims to work with providers to protect patients from “shock” bills for these therapies. 

Anthem has teamed up with St. Elizabeth Healthcare, one of the state’s largest providers, as the first partner in the new program. In the model, the health system will absorb part of the cost of these services, discounting them by as much as 45%. 

Kennan Wethington, commercial president for Anthem in the region, told FierceHealthcare these claims are growing at a “rapid” rate in a short window when they were a rarity even five years ago. 

Adapting to these costs has been a challenge across the industry, he said. 

“It really is a challenging balance to try to strike,” Wethington said. “There’s no easy answer there.” 

RELATED: Costly specialty drugs drive higher spending on provider-administered treatments, study finds 

Development of these pricey therapies isn’t slowing, either. There are a number of drugs in the pipeline that could cost millions if they gain approval from the Food and Drug Administration. Zolgensma, a gene therapy product from Novartis, set the bar for such treatments with a $2 million price tag

Wethington said that Anthem’s program was inspired, in part, by concerns from employer clients who can really feel the impacts of claims that cost hundreds of thousands of dollars or more. 

Bill Banks, vice president for managed at St. Elizabeth, told FierceHealthcare that when the program was brought up at the system’s most recent contract negotiations with Anthem, they jumped in, because offering more reliability and certainty for employers and patients aligns well with its mission. 

Since the health system is paid millions by Anthem each year for services, it’s easier for St. Elizabeth to mitigate a high-cost event than it may be for a smaller employer, he said. 

RELATED: Verma—CMS mulling outcomes-based ways to address expensive specialty drugs 

“This does not necessarily solve the problem of high-cost drugs and we don’t pretend that it does,” Banks said. “It simply transfers the risk from the employer to me as the big healthcare system. It’s still a major concern of ours.” 

Though the program is an effective measure in the near term, Banks said both hospitals and insurers are going to need to “put in a lot of effort” to continue to plan for the growth of these pricey therapies. 

Taking steps to continue addressing high or unneeded costs is key to ensuring employers are able to maintain strong benefits packages for workers, he said. 

“That’s what you should see from us in the future,” Banks said. 

Anthem is looking to expand the program within the state and ideally would have similar agreements with all of its network providers in Kentucky. It’s also considering growing into other states Anthem serves if the measure proves effective, Wethington said. 

“Our employer group partners are always looking to us for innovative ways for us to help them curtail costs while at the same time being mindful of quality,” he said.