Costs, Hospitalizations Associated with Carve-In Versus Carve-Out Benefits Models

Researchers assessed the cost difference between an integrated total health package (carve-in model) versus pharmacy benefits purchased as a separate benefit administered by an external pharmacy benefit manager (carve-out model) and found that integrated benefits were associated with lower medical costs, fewer hospitalizations, and less emergency department (ED) visits. The results of the study were presented during AMCP eLearning Days in a poster presentation titled “Pharmacy Benefit Carve-In Versus Carve-Out: Cost and Medical Events 2-Year Retrospective Cohort Study.”

Researchers used a limited dataset convenience sample of members who were continuously enrolled in a self-insured product from 2017 through 2018 with no major benefit changes from Cambia Blue plans covering 1.6 million members in Oregon, Washington, Utah, and Idaho.

The total medical per-member, per-year (PMPY) comparison was made using a multivariate general linear model with gamma distribution to adjust for Optum Symmetry Risk Score, age, gender, state of residence, seven chronic diseases, insured group size, member enrollment in case or disease management, and plan paid to total paid ratio between the two groups. Researchers conducted sub-analyses of the seven chronic conditions: asthma, coronary artery disease, chronic obstructive pulmonary disease, heart failure, diabetes, depression, and rheumatoid arthritis.

The study included 205,835 carve-in and 125,555 carve-out members. In the carve-in cohort, average age was 34.2 years, and mean risk score was 1.1. In the carve-out cohort, average age was 35.2 years, and mean risk score was 1.1.

Members had 4% (P<0.0001) lower medical costs after adjustment, translating into an average $148 lower PMPY medical cost: $3,749 for carve-out versus $3,601 for carve-in. The carve-in cohort had an adjusted 15% (P<0.0001) lower hospitalization odds and 7% (P<0.0001) lower ED visit odds. Of chronic conditions studied, five had significantly lower costs, hospitalization, and ED visits with carve-in benefits.

“These results may be due to access to both medical and pharmacy data leading to improved care management and coordination,” the researchers concluded.

The study was sponsored by Cambia Prime and Therapeutics.

Lam S, Lockwood C, Pegus C, Smith J, Qiu Y, Gleason P. Pharmacy Benefit Carve-In Versus Carve-Out: Cost and Medical Events 2-Year Retrospective Cohort Study. Abstract U3. Presented during AMCP eLearning Days, April 20-24.