How Digital Pills Could Change The Health Insurance Game

Shopping, social networking, finance, and education have all gone digital. Why shouldn’t your healthcare go digital too?

On Nov. 13, the FDA approved its first ever digital pill, a landmark decision for the future of U.S. health care.

Dosage Goes Digital

The first ever digital pill will be a version of Bristol-Myers Squibb Co BMY’s antipsychotic drug Abilify. But it could open a floodgate that may change the way insurance companies assess a customer’s coverage eligibility.

Digital pills monitor and report drug dosages to family members and physicians to help ensure patents are taking medications as prescribed. Patients must consent to the data sharing beforehand, but insurance companies may see an opening to potentially deny coverage to patients who do not follow their prescribed regimen.

Cost Savings?

At the same time, insurers could incentivize customers to choose digital pills by providing them with coverage discounts. If digital pills pave the way to more adherence on behalf of patients, they could help lower the overall cost of healthcare in the U.S.

“When patients don't adhere to lifestyle or medications that are prescribed for them, there are really substantive consequences that are bad for the patient and very costly,” said William Shrank, CMO of the health plan division at the University of Pittsburgh Medical Center.

In fact, the New York Times estimates that patients who do not take drugs as prescribed add an extra $100 billion annually to the total cost of U.S. health care. When patients don’t take their medications as prescribed, their health can deteriorate, leading to more costly treatments down the line.

Unanswered Questions

For now, the biggest question surrounding digital pills will be whether or not insurance companies will cover them at all. The digital version of Abilify is expected to be more expensive than the standard version, and insurance companies will likely need to see evidence that the drug is helping reduce total cost before they will voluntarily cover the digital version.

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