How Much Could Medication Adherence Save Your Company?
Wellness Moves from Bottom Lines to Positive Outcomes
World at Work Benefits & Work-Life Focus | October 10, 2016
Health-care costs have skyrocketed over the past two decades. Employers and workers bear the brunt of this trend. Between 2005 and 2015, employer contributions to health insurance premiums increased by 61%, according to the Kaiser “Employer Health Benefits Survey.”
Naturally, employers are seeking strategies to counter rising health-care costs. One important strategy to consider is to focus on medication adherence. Why? According to the Network for Excellence in Health Innovation, medication non-adherence is a leading driver of high health-care costs, adding up to $290 billion annually. It’s the leading cause of preventable morbidity and mortality, responsible for 30% to 50% of treatment failures and 125,000 deaths annually, says the American College of Preventive Medicine. As the industry scrambles to improve quality and lower costs, non-adherence to medication is a topic that healthcare providers, payers and self-insured employers should address.
The most common contributing factors of medication non-adherence are:
- Lack of a clear immediate benefit/not understanding the reasons for taking the medication • Confusion about the medication and how to take it
- Concern about side effects
- Psychological resistance.
Most of these barriers can be resolved through patient engagement, education and communication. Implementing a program to engage a large patient population effectively — to stay one step ahead of nonadherent behaviors, send patients refill reminders and ensure that patients have the education they need to take medications properly — isn’t easy to do.
That’s where targeted patient engagement solutions come into play. Intelligent, automated communications combined with live support from licensed clinicians enable organizations to proactively help patients take medications as prescribed.
Employers could potentially save hundreds of millions of dollars in employee productivity — not to mention additional savings in reduced health-care costs — by improving patient engagement and driving interventions around medication adherence for employees and dependents covered through their health plans. In particular, employers have an opportunity to save money by engaging those with common, but costly, chronic conditions.
These savings may sound like a pipe dream, but consider these statistics:
- 3.8 billion prescriptions are written every year, yet more than 50% of them are taken incorrectly or not at all.
- 75% of patients do not take their medications as prescribed.
- Patients who don’t take their medications as intended have a higher risk for hospitalization, re-hospitalization and premature death.
- Poor medication compliance is implicated in more than 125,000 U.S. deaths per year.
According to the Centers for Disease Control and Prevention, as of 2012, about half of all adults in the United States had one or more chronic health conditions. A Georgetown University study estimates that 34% of adults age 18-65 have at least one chronic condition. By 2020, half of the U.S. adult population will have at least one chronic condition.
For the purpose of this article, chronic conditions exclude obesity and include the top eight that require clinical intervention or support: asthma, chronic obstructive pulmonary disease (COPD), coronary artery disease (CAD), congestive heart failure (CHF), depression, diabetes, hypertension and metabolic syndrome/ high cholesterol.
A Cost-Savings Scenario for Medication Adherence
A study in the Journal of Occupational and Environmental Medicine found that employees with chronic conditions who adhere to their prescribed medications had up to seven fewer days away from work annually than those who were not adherent, translating into estimated annual savings of nearly $1,700 per adherent employee.
What does this mean for an employer’s costs in real terms? The average size of the workforce for a Fortune 500 company is approximately 50,000 employees. Based on the most conservative nationwide statistics, we’ll assume that more than one-third of the workforce (adults age 18 to 65) covered by a company’s health plans has at least one chronic disease and 75% in any given year are not on the proper medications. Below is the potential financial impact in a single year:
- 50,000 covered employees x 30% with at least one chronic condition = 15,000 employees
- 15,000 employees (with at least one chronic condition) x 75% not taking Rx properly = 11,250 employees
- 11,250 employees (with at least one chronic condition and not Rx adherent) x $1,700 (amount that could be saved if employee was adherent to meds for their chronic condition) = $19,125,000
Employees’ adherence to medication could save a Fortune 500 employer more than $19 million annually.
Employees who are adherent to their medications also generate savings as the result of fewer emergency department visits and fewer inpatient hospital days. In fact, researchers for CVS/Caremark have found that adherent employees saved the following amounts compared to their non-adherent counterparts for these common chronic conditions:
- Congestive heart failure patients saved $7,823 per year.
- High blood pressure patients saved $3,908 per year.
- High cholesterol patients saved $1,258 per year.
- Diabetes patients saved $3,756 per year.
Employers seeking to improve the health of their employees and their health-care spend would be wise to consider a medication adherence program. Smart, automated communication solutions are valuable, cost-effective means to make this possible and realize the many benefits of improved medication adherence.