Specialty Drugs Administered Outside of Hospital Setting Could Save $4 Billion

Changing where specialty drugs are administered could result in reduction of $4 billion in health care costs, according to a report released by UnitedHealth Group.

UnitedHealth Group’s report explained that in the last 6 years, the annual spending growth for administering specialty drugs per person has averaged a 14% increase.

“Compared to independent physician offices, hospitals charge more for specialty drugs and their administration, whether treatment takes place in a hospital facility or in a hospital-owned physician practice,” stated the report.

The report examined the costs and savings opportunities for five different conditions, whose treatments account for 75% of costs in total administered drug health care spend: multiple sclerosis, immune deficiency, rheumatoid arthritis, inflammatory bowel disease, and chemotherapy for cancer treatment.

Administering specialty drugs for treatment of multiple sclerosis, for example, costs a privately insured individual $20,965 in a hospital, vs $11,619 in a physician’s office or $10,849 in their own home. By UnitedHealth Group’s calculations, there is a potential year savings of $37,000 for 4 months of treatment. Other savings possibilities include:

• Immune deficiency: $32,000 savings for 6 months of treatment.
• Rheumatoid arthritis: $28,000 savings for 5 months of treatment.
• Inflammatory bowel disease: $21,000 savings for 5 months of treatment.
• Cancer (chemotherapy): $16,000 savings for 4 months of treatment.

In total, UnitedHealth Group’s report states that this data reflects a savings opportunity from anywhere between 33% to 52%.

“The savings opportunity assumes half of current hospital outpatient utilization can be moved to physician offices and patients’ homes,” stated UnitedHealth Group in the report’s methodology.

UnitedHealth Group noted that health care spending in the United States is expected to grow to $6 trillion by 2026, according to data from the Centers for Medicare & Medicaid Services. In an effort to combat this, the major health insurer identified four areas where savings are possible including: avoidable hospital emergency department visits, hospital prices, specialty prescriptions, and high-value physicians. —Edan Stanley