Broadening our Understanding of Out-of-Pocket Costs: A Conversation with Real Chemistry’s Market Access Leaders

The high costs of U.S. healthcare will, once again, be a hot topic of conversation in this election year. And it’s not that surprising, since out-of-pocket (OOP) healthcare expenditures cost U.S. families over $430 billion dollars as recently as 2021 – a number that’s almost certainly even larger today. Yet for as big of a financial burden as this number represents, it’s likely a significant understatement, as most analyses of OOP costs focus primarily on insurance and product-related expenditures like deductibles, cost-sharing payments, or the direct costs of medical supplies. Recently, two of my colleagues from Real Chemistry’s Market Access team, Chris Juday and Theresa Schmidt, partnered with researchers from Merck and the University of Michigan’s Center for Value-Based Insurance Design (V-BID) to broaden the scope of what might be considered OOP costs from the perspective of patients and caregivers. The resulting article, “Expanding the Catalog of Patient and Caregiver Out-of-Pocket Costs: A Systematic Literature Review,” was recently published in Population Health Management, and it is now stimulating some interesting conversations about policymaking, access strategy innovations, and the continued challenge of reducing healthcare financial toxicity in this country.

?I recently had the chance to sit down with Chris and Theresa to learn a bit more about their OOP cost analysis – what made the project unique, what they learned, and what new questions their work raises for future research and manufacturers’ market access strategies. Below, I share some highlights and key takeaways from that conversation.?

Why did you and your colleagues decide to take on this systematic literature review? What makes it important right now?

Theresa: We know how much affordability and access can impact patient health outcomes – especially in historically marginalized or underserved communities. But we also sensed that research and conversations about out-of-pocket costs were incomplete. Insurance-related expenses have heavily influenced the narrative here, so when most people think about OOP costs, they tend to first think about things like deductibles, copays, and co-insurance. But not everybody thinks about the added costs of the metro ride to the doctor, or parking, or the time you miss from work for your appointment.

We know that OOP costs are a big problem in this country. But to even begin to address the issue, we need to make sure we have shed light on all the dark corners so that people really understand the problem – in all of its complexity and nuance. When I go to research a new topic, the first thing I look for is a recent systematic literature review. If you’re not familiar with the term, it involves a rigorous search methodology that basically looks at every single published article meeting a set of specific search criteria. No one had really done a true systematic literature review on the broader set of OOP costs – at least not as comprehensively as we felt the issue warranted. So, we seized the opportunity.

What made this project unique?

Theresa: As I mentioned, this is probably the most comprehensive look at out-of-pocket expenses experienced by patients and their unpaid caregivers. But equally important was how we determined what “counts” as an out-of-pocket expense. Before we did the literature review, we actually talked with patients and caregivers about the expenses they’re experiencing in the real world – and about how those expenses are impacting their lives. And what they said heavily influenced our screening criteria. It helped us refine our approach to think broadly about what all these OOP expenses could be, and it pushed us to ask how we might categorize them in ways that help payers, policymakers, and those who support patients better understand what people are facing when they seek a diagnosis or a medical treatment that involves any kind of expense.

Chris: To further emphasize that point: for a cost to qualify for this study, it had to be perceived as a real cost from the patient’s perspective. We treated that as our “true north.” Whenever we weren’t sure, we asked if this was genuinely published research considering the patient or caregiver perspective. If the information came from providers but was still about what patients were really experiencing, that was OK. We used those first-hand interviews to guide our scope, but we wanted it to be a little broader than that.

Theresa: That comprehensive and patient-centered approach, coupled with this rigorous methodology of evaluating and categorizing the potential costs, has really resonated with the patient groups I’ve spoken to since completing this work.

What were some of the most significant insights coming out of the research?

Chris: For one, this analysis made painstakingly clear that the direct medical costs we so often talk about as out-of-pocket expenditures – those really are just the tip of the iceberg. And below the surface, there’s a whole lot more we must acknowledge if we really want to move the dial on access, affordability, and adherence.

Theresa: That’s right. Across the 817 articles in our study, we captured 31 distinct categories of OOP costs, and those spanned direct medical costs like we’ve been talking about, plus direct nonmedical costs like transportation or childcare, and indirect spending – what some might call opportunity costs – like absenteeism from work or lost productivity.

Chris: I think for those of us working on this project – including Mark Fendrick, who has spent over twenty years focused on this very topic – we were all surprised at how much wider the catalog was than we expected. As someone who’s spent a lot of time in market access – working at or with manufacturers on things like pricing, contracting, and patient support programs – this research tells me that there’s a lot more to consider than we normally think of when we talk about access strategies. It’s really interesting, as it helps to illustrate why making something deeply discounted or “free” doesn’t necessarily solve the problem. There are just so many other variables. Even if you made a drug free or more accessible, if you didn’t also ameliorate the transportation costs or ensure appropriate support at home, your patient may still not be able to stay on recommended treatments.

For manufacturers, the levers that they’ve traditionally tried here, in many cases, still aren’t going to be exhaustive enough. That doesn’t mean that it’s wholly on the manufacturer to solve these problems, but if they’re only looking at this piece or that piece of the puzzle, they’re missing the larger picture. Ultimately, that’s why I found this project fascinating and why I think the issue deserves more study.

What new questions does this raise for you? How might this propel additional research on financial burdens and OOP costs?

Chris: There are so many potential directions to take this research, and we’re actively looking for partners who may be interested in exploring some of those questions with us. For example, we’re very interested in understanding how patients and caregivers prioritize these costs and weigh them when making decisions. Which of these factors are the biggest influencers and which are the smallest? Which matter more or less from a patient perspective? And how might that vary by whether patients are dealing with chronic or episodic conditions?

Theresa: I’m also interested in more qualitative, interview-based research to understand how these expenses that we catalogued actually show up in people’s lives. How are they impacting healthcare decisions and healthcare outcomes, and how do different people perceive and experience these expenses in the real world?

This kind of research would also open opportunities for us to explore how inequities and social determinants of health come into play when it comes to the expenses people have, the trade-offs they have to make, and their access opportunities. How might the impacts of marginalization, bias, systemic racism, or geography shape what individuals learn about the support systems available to them, financially and otherwise? I’m thinking here of knowing how to access things like copay cards, or having access to people who might be able to help you find childcare, or getting coaching on how best to use employee benefits – if you even have those kinds of employee benefits. So much depends on who you are and what resources you have. These are real-world health equity questions. And I think future research definitely needs to dig into them more.

What is the biggest thing you hope biopharmaceutical manufacturers take away from this initiative?

Chris: When you think about out-of-pocket costs, you need to think more broadly than your organizations traditionally do. So, whether you’re actively trying to address these barriers or not, you need to understand those factors and their ripple effects so that you can make smarter choices about the costs and value decisions you’re considering – before you enter a new market. You can go in “eyes wide open” and see the bigger picture.

Theresa: Building on that, you [manufacturers] need to understand that these costs impact access to your medications in a very real, substantive way. By helping patients and families navigate the system more effectively, you will help to increase access for your therapies.

Interested in learning more about this research or other ways that Real Chemistry supports market access teams with evidence planning, outcomes research, or access and value strategies? We’d love to collaborate and innovate with you on the path to expanding patient access for life-changing therapies. Contact me at [email protected].