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Healthcare is expensive, and it’s only getting more costly as time goes on. In 2022, U.S. healthcare spending topped $4.5 trillion, or 17% of the nation’s GDP. Medicare spending comprised 21% of that figure, which was a 4% increase from the previous year.
With Medicare Advantage (MA) plans now serving more than half (54%) of the Medicare-eligible population, the financial math can start to seem fairly daunting for MA leaders who aim to provide exceptional care to an aging population without breaking the bank.
The situation gets even more complicated when considering that older adults tend to stick with MA plans as they get older and sicker, bringing more costs into the system along with heightened requirements for plans to stay one step ahead of the complex care required for individuals with multiple chronic conditions and other significant health needs.
For MA plan leaders, the challenge becomes finding the most effective strategies for reducing costs, while still maintaining the exceptional care quality and member experiences demanded by the CMS Star Ratings system—and by a consumer base that has more and more incentives to seek out the biggest bang for their buck.
The solution lies in empowering the efforts of pharmacists who interact directly with members, or providers responsible for managing the medication needs of a member population.
By focusing on providing these key players with the data and resources needed to uncover and resolve the maximum number of drug therapy problems (DTPs) experienced by plan members, as well as other opportunities for intervention and savings, MA plans can improve member health, to reduce medical spending and improve long-term sustainability.
What’s driving up costs in the Medicare Advantage system?
MA enrollment is skyrocketing as the over-65 population continues to grow. By 2060, there will be more than 30 million more older adults in the U.S. than right now—and if current spending trends continue, this population segment is likely to see annual average increases in per capita costs of just under 5% per year.
A large proportion of these costs are skewed toward members with the most complex clinical and socioeconomic needs, with the costliest 5% of individuals responsible for approximately half of all spending. These are typically the members with multiple comorbidities requiring multiple medications to treat them. In fact, approximately 40% of older adults take 5 or more medications, with significantly higher rates among those with common conditions, such as heart disease and diabetes.
And the price of these medications is increasing. Between January 2022 and January 2023, over 4,200 drug products saw price increases, with 46% exceeding inflation, which was 6.4% during that period. The average price hike was 15.2%, equating to about $590 per product. This is a significant rise from the previous year’s average increase of 11.5%. As a result, older adults are reporting difficulty affording medications and healthcare.
In terms of overall spending, prescription drug expenditures grew by 8.4% in 2022, reaching $406 billion. This growth outpaced both hospital care and physician services, which grew at slower rates of 2.2% and 2.7%, respectively.
These escalating costs, driven by price increases and other factors such as market monopolies on brand-name drugs, have a significant impact on both healthcare budgets and patient access. 
Medication optimization to reduce medical spending
MA plans can start to take control of member health and medical spending by getting ahead of drug therapy problems (DTPs) within the member population. A critical strategy to accomplish this is through medication optimization—allowing MA plans to identify and resolve DTPs, helping enhance health outcomes and reduce the medical spending associated with worsened health conditions.
Medication optimization helps plans ensure medications are being used safely and effectively, which allows prescriptions to deliver the positive outcomes intended by a prescribing physician, while also helping to prevent any negative health situations that could occur if the medications weren’t being taken properly or at all. It involves a data-driven approach that bolsters provider interactions with members, such as during a comprehensive medication review (CMR), helping ensure members have access to appropriate medications, and are filling and taking them as prescribed. This is especially important in managing multiple prescriptions, which is not only a challenge for members, but also for healthcare providers and health plans.
Providers often face the task of consolidating information from various sources to get a comprehensive view of a member’s medication list. When gaps in medication data occur, it can result in improper prescribing, such as duplicate medications or harmful drug interactions, often leading to DTPs.
Tackling DTPs head-on
Drug therapy problems contribute to nearly 100,000 hospitalizations among older adults each year. A study found that 452 patients experienced over 3,100 DTPs in 3,309 pharmacist consultations, with an average of seven issues per person. They’re also associated with poor health outcomes, negative member experiences and a financial burden on the healthcare system, costing between $495 billion and $672 billion annually.
The financial benefits of addressing DTPs are substantial. For every gap in medication management closed, annual pharmacy savings can exceed $1,300, and the healthcare system saves an average of $2,260 per resolved DTP by preventing more expensive acute care. MA plans can achieve these outcomes by partnering with a technology solutions provider that specializes in optimizing medication use to drive both financial and clinical improvements. Identifying and resolving DTPs is often an effective first step that can assist with improved health outcomes and cost savings.
Using advanced technology to analyze multisource data, including clinical, pharmacy and medical claims data, MA plans can better pinpoint potential DTPs for members. This allows them to identify risks, and engage members and providers to resolve DTPs—helping ensure treatment recommendations are safe and effective, for improved wellness and avoidance of negative interactions or health outcomes.
Empowering the outreach efforts of pharmacists
Even members who typically avoid interacting with health plans may be open to learning more about how to optimize their medications, especially if it means switching to a lower-cost alternative or removing an unnecessary drug from their routine.
Plans can foster these positive interactions by using a robust data analytics platform to equip pharmacy outreach staff with detailed data on the member’s current medications and medical history. This valuable insight helps to uncover the maximum number of DTPs for resolution by the pharmacist and an improved experience and health outcomes for the member.
The right tools to support clinical outreach and engagement
With easy-to-use dashboards that surface aligned medical and pharmacy data to empower the pharmacist’s conversation with the member, staff can identify more DTPs in fewer interactions while building trust with individuals. Choosing the right partner to provide these leading-edge technologies and experienced outreach staff can help MA plans extend their capabilities and maximize the value of the resources at hand.
Combined with effective engagement strategies, such as motivational interviewing, these conversations can support positive behavior changes that may include improved health literacy, and increased adherence with medications that support better health outcomes.
Empowering prescribing providers
Providing providers with the data needed to resolve DTPs within a member population is another application of medication optimization to reduce a plan’s overall medical spending.
Providers are often on the frontlines of care but can struggle with incomplete or fragmented medication data, especially when managing complex member populations with multiple prescriptions. By utilizing a platform that identifies DTPs in a population where multiple data streams converge, health plans or other risk-bearing entities gain a clear understanding of potential risks—such as drug interactions, inappropriate dosages, untreated medical diagnoses, or adherence issues—that may otherwise go unnoticed.
A medication optimization strategy can streamline the process of resolving these DTPs by consolidating data from various sources and delivering actionable insights directly to providers. This not only helps reduce errors but also facilitates targeted interventions, allowing providers to resolve DTPs efficiently and effectively.
In conclusion
Incorporating a medication optimization strategy is essential for MA plans to maximize resolution of DTPs, drive improved health outcomes and reduce medical spending associated with worsened health conditions. By working with the right technology solutions partner, MA plans can ensure that members are receiving the most appropriate, cost-effective treatments.
This approach not only strengthens the financial health of the plan but also fosters a more member-centric care model, where medication use is safe, effective and aligned with long-term health outcomes.
To learn more about how to maximize identification of DTPs, improve member health outcomes and control avoidable spending, contact AdhereHealth to schedule a consultation.
Authored By:
Levi Sanderson, PharmD.
AdhereHealth Senior Director of Clinical Solutions
