How OTC Medicines, Supplemental Benefits Improve Care, Cost

March 15, 2021 - Research indicates the availability of OTC medicines provides $146 billion in value ($52 billion in drug cost savings and $95 billion in clinical visit cost savings) with each dollar spent on these products saving the healthcare system seven dollars. Likewise, OTC medical devices for treatment or testing generate $8 billion in potential savings by eliminating visits to a healthcare facility.

With U.S. households spending an average of $442 per year on OTC products, supplemental benefit offerings can improve the wellbeing of plan members and reduce the cost associated with expensive name-brand medications and unnecessary visits to provider organizations.

As a result, health plans are eager for opportunities to leverage OTC benefits to meet their members' needs and remain competitive in the marketplace where healthcare consumerism is having an increasing impact on health plan satisfaction and member retention.

So why are OTC benefits so attractive to consumers, especially with a pandemic continuing to impact access to treatment and medications?

"For one, these benefits can really change someone's outlook on health insurance and healthcare because it gives them access to benefits you normally wouldn't think of when you're thinking about insurance," says Sana Hashmi, Vice President of FirstLine Benefits, a company that works with health plans to make these supplemental options available to members.

"You don't think your insurance plan will cover toothbrushes, toothpaste, acetaminophen and Tylenol," she continues. "You don't think those could be something your insurance coverage could give you access to. But think about how many people are on fixed incomes. And there's this benefit that would give them the ability to get access to products that can change someone's co-morbidity."

For a person with diabetes, oral care is important. Access to a toothbrush and toothpaste can drastically limit their chances of infection and their likelihood of needing expensive intervention.

A significant problem for health plans regarding OTC benefits is that many of their members do not know these options exist. "If they did, it would change their lives by putting the focus on prevention," Hashmi stresses.

Prevention has become a cornerstone of the approach taken by federal and state programs to improve access to care, health outcomes, and care costs. However, these programs could likely achieve better care, outcomes, and spending by placing a greater emphasis on OTC products.

"Over the last decade, conservative efforts on the part of government officials have focused on giving people access to doctors and hospitals, which is an absolute must, but we all know there are more things that play into keeping someone well," Hashmi maintains.

Case in point: The pandemic has highlighted the impact of social determinants of health on the ability of individuals and populations to stay healthy and safe over the past year. The Association of American Medical Colleges reports that more than 54 million people in the United States are food insecure. And that's just one example among numerous others (home insecurity, transportation, care access, etc.).

By thinking more comprehensively about the needs of health plan members, payers can turn to OTC benefits as a means of providing the basics necessary for keeping individuals and communities healthy.

"OTC benefits, to me, are where healthcare needs to go after it covers the basics," Hashmi maintains.

The pandemic has generated resumed interest in supplemental benefits, from something deemed a nice-to-have before the pandemic to a necessity coming out of it.

"We actually had to do some convincing in the beginning," Hashmi reveals. "What the pandemic proved is how important prevention can be. If people had access to masks, supplements, food, and were healthier in general, they could have fought off the disease much better. If people had access, we could have prevented so many more deaths, and that's on us, but we didn't build that in."

While OTC benefits take a simple approach, they go a long way toward keeping members healthy and happy. According to internal FirstLine Benefits research, 96 percent of members report being satisfied with 86 percent likely to recommend the plan to others.

With the pandemic still very much part of daily life in 2021, health plans can make great strides in meeting the day-to-day needs of members by making supplemental benefits a more prominent feature, helping consumers when it matters most.

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About the Sponsor

The team at FirstLine Benefits™ works with health plans to make the healthy choice the easy choice for their members. They do this by delivering products and programs that give people access to products they need to make better decisions for their health.