Giving Specialty Drugs Outside Hospital Settings Could Save $4 Billion Annually, Report Says

A new report released Monday by UnitedHealth Group finds that administering specialty drugs—which are typically injected or infused—in homes or in independent physician offices instead of hospitals could save as much as $4 billion each year.

The report focused on the 5 conditions—multiple sclerosis (MS), immune deficiency, rheumatoid arthritis (RA), inflammatory bowel disease (IBD), and chemotherapy—that account for more than 75% of spending on administered drugs.

Changing the setting of administration would save $16,000 to $37,000 per privately insured patient per year, the report said, reflecting a savings opportunity between 33% and 52%.

By condition, the report separated monthly costs by place of administration:

• For MS, monthly drug costs of $10,849 when given at home versus $11,619 in a doctor’s office and $20,965 in a hospital setting ($37,000 savings for 4 months of treatment).
• For immune deficiency, monthly drug costs of $6828 when given at home versus $6736 in a doctor’s office and $12,180 in a hospital setting ($32,000 savings for 6 months of treatment).

For 2 conditions—RA and IBD—costs were slightly higher when drugs were administered at home versus a provider’s office, but both sites were still far less than hospital settings.

• For RA, monthly drug costs in the home setting were $5783 versus $5512 in a doctor’s office and $11,451 in a hospital setting ($28,000 savings for 5 months of treatment).
• For IBD: monthly drug costs in the home setting were $6979 versus $6005 in an office and $11,273 in a hospital setting ($21,000 savings for 4 months of treatment).

For chemotherapy, the report found a $16,000 savings for 4 months of treatment ($8281 monthly costs for a provider’s office and $12,315 for a hospital setting).

The report comes as the use of specialty drugs is increasing; since 2013, annual growth in per capita spending on administered specialty drugs has averaged 14%. With healthcare costs expected to reach $6 trillion by 2027, policymakers have been grappling with different ideas to try to reverse the trends.

The report said that treating patients at home could add to physical and mental wellbeing, with fewer schedule disruptions related to work or family, without the likelihood of adverse drug events or side effects.

Compared to independent physician offices, hospitals charge more for specialty drugs and their administration, whether treatment occurs in a hospital or in a hospital-owned physician practice.