Rohit Khanna

Ok, so it’s actually two words. But if you haven’t heard of ‘fail first’ policies, they are surely coming to an insurance company near you very soon. And if you have heard of the term ‘fail first’, it’s likely that you or a loved one has experienced the agony of having to deal with an illness through the lens of this policy.

Put simply, fail first policies are designed to curb potentially expensive spending on drug therapies by mandating that patients fail on a less expensive treatment first before moving on to more costly options.

And this trend has mushroomed over the last 15 years: for example, in 2013, 67% of employer-sponsored health insurance plans reported that they had implemented fail first (also known as ‘step’ therapy) policies, an increase from 27% in 2005.

The immediate reaction is that these employer-sponsored plans don’t cover the vast majority of patients or the disease states that are most prevalent in the general population. In other words, much ado about nothing. Well, wrong on both counts.

We know that some of the largest employers in the US participate in these plans and we also know that fail first policies are being applied to the coverage of drugs used to treat a wide variety of chronic conditions, including cancer, rheumatoid arthritis, mental health disorders, hypertension, diabetes, pain, HIV and hepatitis C.

In other words, these policies are not reserved for the orphan disease drugs or the therapies that impact the few.

To be fair, there are many states that have set limits on how far insurers can take these fail first policies in terms of maximum duration of fail first therapies, an appeals process for patients and the mandatory exclusion of fail first policies in certain situations4. Many analyses of their impact on overall costs has been mixed, with some studies showing a reduction in costs and others showing a drug cost reduction but also an offsetting increase in other healthcare service costs.

Challenging medical decisions

But there are two larger issues which are troubling and show no sign of abatement: at what point are we no longer comfortable having private insurance companies challenging the clinical decision-making of trained physicians?

And when do we start to get really uncomfortable with the idea that insurance companies’ implementation of policies (fail first, lifetime caps, annual caps, exclusion of drugs from patient choice, etc) is a metaphor for an increasingly disturbing aspect of our health care system, which is that private insurance companies’ policies are not designed with the patient in mind. They are designed with profit in mind.

On the issue of interfering with the clinical decision-making of trained physicians, many in the policy world stand clearly on the same side of the fence: we must limit the extent to which faceless corporations who have never examined, diagnosed or cared for patients hold the power in deciding what therapeutic treatment options these same patients can use to manage their disease. This decision should be left to doctors and patients. Period.

On the second issue, this is admittedly a little trickier. After all, private insurance companies are for-profit entities that are responsible to shareholders and customers.

Having said that, we need to return to the centre of decision-making in healthcare: the doctor. The prospect of drug toxicity, major adverse events or lack of efficacy should be recognised criteria for allowing patients to skip a fail first approach to care management and the only requirement to validate these criteria should be a written assessment by the patient’s physician.

With the public health impact of fail first policies unclear and the real possibility that many such approaches may result in lower drug costs, but higher overall health system costs downstream, it is time to be more aggressive in (re) establishing a doctor-patient centric system.

This is not about cutting the insurance companies off at the knees or being suspicious of their motives. Policy experts are wary of health insurance market failure and rightly so.

We need to find a way to reward these important players in the overall efficient functioning of our health system. But let’s face it, the pendulum of ‘control’ has swung, as many would agree, in the wrong direction.

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Rohit Khanna is Managing Director of Catalytic Health, a healthcare communication, advertising & strategy agency. He can be reached at: rohit@catalytichealth.com