Medicare Monday: Adherence in Medicare and Medicaid saves money

Allyson Funk   |     September 14, 2015   |   SHARE THIS

MedMon_Catalyst_BannerIf you’ve been following along with Medicare Monday, you’ve undoubtedly heard us talk about how adherence to prescription medicines helps save money in Medicare.

Due to a growing body of evidence, in 2012 the Congressional Budget Office (CBO) began recognizing reductions in other medical expenditures associated with increased use of prescription medicines in Medicare.

 “Pharmaceuticals have the effect of improving or maintaining an individual’s health…adhering to a drug regiment for a chronic condition such as diabetes or high blood pressure may prevent complications…taking the medication may also avert hospital admissions and thus reduce the use of medical services.”

– Congressional Budget Office

Adding to the body of evidence on how adherence to prescription medicines can help save on other health costs, last week Health Affairs published new research (coauthored by PhRMA) that came to the same conclusion as CBO with regard to Medicaid expenditures: better use of prescription drugs by Medicaid beneficiaries can yield significant savings.

tn_MedMonThe study found that increasing the number of Medicaid prescriptions filled by just 1 percent reduces program spending on inpatient and outpatient services by approximately 0.20 percent for nonelderly adults and the blind/ disabled. For example, there are approximately 385,000 blind or disabled beneficiaries with fee-for-service Medicaid with mean annual costs of $6,000 on inpatient and outpatient services. A program aimed at improving drug use by 5 percent for this population would save about $23 million in one year.

Improved adherence has a meaningful impact on health care costs as evidenced by research on both Medicare and Medicaid. Learn more about adherence in our Ask About Adherence series here and continue following Medicare Monday here.

Allyson Funk

Allyson Funk Ally is a former senior director of public affairs at PhRMA focused on advocacy issues for the biopharmaceutical industry. Her expertise includes Medicare, Medicaid, 340B, health reform and more. Prior to PhRMA, her experience includes leading health communications for a large membership organization, supporting public affairs clients and working for the governor of Louisiana.

Topics: Medicare, Medicare Monday, Medicaid

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