The study studied the effects of value-based insurance design as well as disease management on diabetics. Diabetes is a chronic and expensive condition reaching 7.8 percent of the U.S. population, according to the American Diabetes Association.

Earlier studies have found comparable improvements in medication adherence attributable to lower co-pays. However, the FHCC study also shows companies can save money.

By taking medication and participating in a disease-management program, patients' avoid more involved and costly care in the future, according to the study.

"This study demonstrates how the synergy of value-based insurance and disease management not only greatly improves compliance with medical guidelines, but it also reduces the direct medical costs associated, in this case, with diabetes," says Dr. John J. Mahoney, medical director of FHCC. "We found that we were able to achieve savings in the entire outpatient arena."

The study, which began Jan. 1, 2006, examined the effects of a pharmacy program that reduced out-of-pocket costs to 10 percent for diabetes medications and focused on two groups of plan participants: 1,876 employees and dependents who participated in a disease management program and had value-based insurance and a matched control group that did not have value-based insurance.

After just the first year, the use of diabetes medication was 3.8 percent higher among those who participated in both value-based insurance and disease management, compared to those only in the disease-management program. The gap rose 6.5 percent after three years, according to the study.

"Not only were the effects on prescription-drug use and adherence to guidelines sustained over time," the study states, "they also grew over time."

The analysis used a baseline of 2005 with data from Thomson Reuters Advantage Suite, comprising outpatient prescription drug and medical claims; inpatient medical claims; and patient enrollment data.

"We learned that people are more compliant in using their important prescriptions when we improve access by lowering co-payments," Cherney says. "The increased cost of fully following a prescribed drug regimen is more than offset by fewer emergency-room visits and inpatient hospitalizations. The disease management program is yet another outreach to assist and remind employees of the importance of using their medications to control their chronic illness."

The study, Cherney adds, helps employers, providers and patients understand the value of available treatment as part of a high-quality U.S. health-care system.

Co-authors of the study are Teresa B. Gibson, Ph.D., director of health outcomes, Thomson Reuters; John Mahoney, M.D., medical director of FHCC; Karlene Ranghell, MBA, RRT, project director of FHCC; Becky J. Cherney, CEO and president of FHCC; and Newell McElwee, executive director, U.S. Outcomes Research, Merck & Co. Inc.