The importance of improving medication adherence came into sharp relief last week as IMS and Medicare released new U.S. prescription spending data.
In the midst of the seismic shift in how Medicare reimburses providers, U.S. spending on prescription medications reached a staggering $374 billion in 2014 according to data released by the IMS Institute for Healthcare Informatics. More specifically, and as reported by Meghana Keshavan in Medcity News, Medicare just released data on its Part D drug program indicating 2013 spending levels reached $103 billion. The introduction of new therapies capable of curing hepatitis C and fewer products losing patent protection are part of the cause for these massive spending levels.
What is lost in the conversation involving numbers so large and ever-increasing that they seem impervious to positive effect is the waste due to medication non-adherence.
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According to a previously released IMS Institute for Healthcare Informatics in “Avoidable Costs in U.S. Healthcare,” responsible use of medications can eliminate at least $213 billion annually in avoidable costs. Medicare’s portion of that $213 billion in wasted spending represents a savings potential of $42 billion per year.
This visibility into U.S. spending on prescription medications demonstrates the magnitude of the potential savings associated with two disease states in particular, hepatitis and diabetes.
Prescription medication spending and the shift to value-based care
As the shift to value-based care continues, providers, and the national healthcare system including ACOs and Medicare especially, should be looking to pharmacists to reduce the overall healthcare spend and improve patients’ lives by addressing medication nonadherence (MNA).
A Personalized Approach to Medication Nonadherence
At the Abarca Forward conference earlier this year, George Van Antwerp, managing director at Deloitte, discussed how social determinants of health and a personalized member experience can improve medication adherence and health outcomes.
We define value as outcomes divided by costs. The value of curing a person with hepatatis C, could be placed at avoiding a $500,000 liver transplant (outcome), divided by cost ($94,500 for a 12 week course of Harvoni with excellent adherence to the therapy), a more than 5 to 1 value proposition. Other examples of appropriate metrics for outcomes include readmission rates and viral load data for hepatitis and HIV patients.
Another chronic disease state about which we know a tremendous amount is diabetes. 20% of the overall U.S. healthcare spend goes to treating diabetes. The newly released Medicare data indicate $1.5 billion spent on Januvia (patent-protected) and $227 million on Metformin (generic), both diabetes therapies.
My early analysis indicates Medicare patients with diabetes who fail to achieve adequate glycemic control due to medication non-adherence is 33%. According to a study published in Diabetes Care, the publication of the American Diabetes Association examining the effect of medication nonadherence (MNA) in a population of U.S. Veterans, the annual increase in medication costs for patients with HbA1c>10 is $5,465. The annual increase in those costs for patients after five years of MNA is $13,135.
A 35 percent increase in medication adherence (a number we know to be attainable through our own medication management protocols) yields savings potential for Medicare diabetes patients alone in the $3.7 billion – $8.9 billion range.
Improving medication adherence improves outcomes and reduces costs
As my colleague at Curant Health, CEO Patrick Dunham, and I have discussed on many occasions, MNA is the longest lever available to the U.S. healthcare system to improve outcomes and reduce costs. We also know with reasonable certainty that improvements in medication adherence are capable of reducing hospital readmissions among Medicare home care patients with the potential to realize savings of $2.7 billion.
Going back to the $42 billion annual savings potential for Medicare in overall MNA, a 33% improvement in that number yields nearly $14 billion, enough to pay for repealing the Sustainable Growth Rate, legislation signed in to law last month after years of patchwork “doc fixes.”
But administrators and clinicians cannot achieve this alone. The U.S. healthcare system must expand the network of accountability. Almost all accountability currently lies with physicians. Moving forward, lawmakers and policy experts should consider the proper use, engagement and role of accountability for each provider type (including clinical pharmacists) and ask, “Are all available resources being tapped to positively affect the outcomes and cost variables in the healthcare value quotient?” More specifically, “How do all concerned improve patients’ quality of life by improving medication adherence?” When that happens, quality of life and outcomes go up while waste goes down.
