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The costs of delivering healthcare are rising precipitously, with pharmacy claims leading the way. Between 2022 and 2023, more than 4,200 drug products saw price increases, nearly half of which exceeded the rate of inflation, according to government data. The average drug price increase during this time was 15.2%, equating to $590 per drug product.
Overall, average spending on prescription drugs accelerated 8.4% to reach $406 billion in 2022, outpacing the rise in hospital care and physician services by nearly four times. In July of 2023, more than one in four patients said they had trouble affording their medications.
Getting a handle on rising drug costs requires intensive collaboration between regulators, life science companies, providers, health plans and pharmacy benefit managers (PBMs). Each has a key role in ensuring medications are affordable, accessible and being used appropriately to maximize their value for patient outcomes.
By incorporating medication optimization into their member engagement strategy, MA plans can prevent drug therapy problems (DTPs) to improve health outcomes and avoid future medical costs, which can lead to savings for themselves and plan members. Optimizing medication use supports a favorable MLR outcome while offering better experiences for members. PBMs can harness the power of medication optimization to dive deeper into data and target members in need of outreach for education or generic savings opportunities. Together, the functions of each entity go hand in hand to support a more affordable prescription drug ecosystem.
The critical importance of optimizing medication use for MA members
With no downsides to medication optimization, MA plans need to consider a proactive, data-driven strategy for ensuring members have access to the right medications, are using them appropriately and are maintaining adherence over time to prevent downstream medical spending.
Approximately 40% of older adults take 5 or more medications, with significantly higher rates among those with common conditions like heart disease and diabetes. Keeping track of all these prescriptions isn’t just challenging for members—it’s also a perennial pain point for healthcare providers and health plans, who must often aggregate multiple data sources to get a full and accurate medication list during an interaction.
Gaps in this information can quickly lead to inappropriate prescribing, including accidentally doubling up on dosages or prescribing drugs that may interact with each other. The result is often a DTP: an unwanted and potentially harmful side effect of poor medication management.
DTPs are implicated in nearly 100,000 hospitalizations among the elderly each year. One study found a total of 3,100 DTPs during 3,309 patient-pharmacist visits for just 452 patients, which averages nearly 7 issues for each individual. In addition to associated poor member experiences and enhanced risks of poor health outcomes, DTPs cost the healthcare system anywhere between $495 billion to $672 billion annually.
Getting ahead of DTPs
To get ahead of these challenges and reduce the number of costly and dangerous DTPs that could contribute to an unsatisfactory MLR, health plans must adopt a comprehensive approach to optimizing medication use, and ensuring patients receive the most effective, safe and affordable medications tailored to their individual needs. This includes utilizing technology to identify risks and prioritize proactive outreach and education to members, helping equip them with the knowledge they need to use their medications appropriately.
The benefits of maximizing DTP identification can be significant, with an annual pharmacy savings of more than $1,300 per gap closed, and an average medical cost savings of $2,260 per resolved DTP due to the avoidance of acute medical care needs.
To achieve these results, MA plans are best suited by enlisting the help of a technology solutions partner, to deploy an effective strategy for achieving positive financial and clinical results.
Best practices for engaging in medication optimization
Optimizing medication use has both a financial component and a clinical component. On the financial side, it’s important to ensure members can afford and access their medications, which often means pivoting to generic options when available, offering home delivery or medication synchronization to reduce barriers to pharmacy engagement, and working with drug manufacturers to negotiate fair prices.
On the clinical side, MA plans need to focus on forestalling DTPs with enhanced risk stratification and analytics tools, supporting outreach clinicians to conduct thorough medication reviews, and fostering effective outreach and education to members, especially those experiencing socioeconomic barriers or daily living challenges that make it difficult to manage their medications. All these activities can contribute to an improved MLR and enhanced member outcomes. Success requires the technology and insight to drive informed, personalized outreach for medication optimization.
1. Leverage technology to empower comprehensive medication reviews (CMRs)
Data analytics are key for gaining a better understanding of how and when DTPs occur. Using the right technology platform to ingest aligned medical and pharmacy claims data allows MA plans to uncover and resolve the maximum number of DTPs—and may even illuminate additional cost savings opportunities, such as ICD-10 codes without corresponding NDC pharmacy claim codes, or opportunities to transition to lower-cost specialty drugs.
With more robust and comprehensive data on member utilization and prescriptions, plans can conduct more effective CMRs and reconcile potential issues before they turn into high-cost crisis events. Technology tools should include intuitive dashboards and seamless workflows that empower clinical outreach staff to identify concerns and engage with members with as little abrasion as possible.
2. Work closely with partners, such as PBMs, to enhance collaborative insights
Partnerships are at the core of success with medication optimization, since so many stakeholders are involved in the prescription drug environment. PBMs, who negotiate directly with drug manufacturers on pricing, set formularies and provide member education, are crucial players in this space.
Both health plans and PBMs can benefit from access to meaningful data about medication usage, which can help ensure members are using generics instead of higher-cost brand name drugs, when appropriate, and that overall spending on prescription drugs remains manageable. When PBMs can engage with effective technology and work hand-in-hand with health plans to generate actionable insights into member behaviors and potential DTPs, both parties can benefit via improved negotiations and mutual assistance with targeted clinical outreach to members in need of support.
3. Supporting members through more collaborative, person-centered care
Supplying members with knowledge about their medications, including proper adherence and potential side effects, is vital for achieving the maximum clinical benefit from medications while reducing the likelihood of DTPs. MA plans should consider investing in data-driven outreach capabilities to deliver timely CMRs, uncover socioeconomic risks or barriers to care, and encourage appropriate adherence.
At the same time, health plans need to take a similar approach to working with prescribers, pharmacists, nurses and other allied health professionals to ensure these care team members also have the latest and most accurate information about how to assist their patients with optimized medication use.
Conclusion
Fostering interdisciplinary collaboration helps coordinate medication management, develop more effective treatment plans and keep members at the center of their own care. By deploying a coordinated and structured approach to optimizing medication use, MA plans can help members avoid costly and disruptive DTPs.
Both MA plans and PBMs need a technology solutions partner that can support more affordable, accessible and appropriate medication use to avoid future spending, improve member outcomes, and keep MA plans on top of their MLR goals.
To learn more about how medication optimization can assist MA plans and PBMs with improving outcomes and enhancing value, download our sales brief or contact us today to schedule a consultation.
Authored by:
Glenn Wirick
AdhereHealth Chief Commercial Officer
