Improvements in 6 Key Areas of Medication Use Could Save More Than $200 Billion Annually

Irresponsible use of medicine, including non-adherence and medication errors, costs the United States more than $200 billion a year, representing 8 percent of the country’s total annual healthcare expenditures, according to a new study released by the IMS Institute for Healthcare Informatics.

The report, Avoidable Costs in U.S. Healthcare: The $200 Billion Opportunity from Using Medicines More Responsibly, examines six areas that contribute to unnecessary costs:

  • Medication non-adherence;
  • Delayed evidence-based treatment practice;
  • Misuse of antibiotics;
  • Medication errors;
  • Suboptimal use of generics; and
  • Mismanaged polypharmacy in older adults.

Together, these areas lead to the unnecessary utilization of healthcare resources, resulting in an estimated 10 million hospital admissions, 78 million outpatient treatments, and 246 million prescriptions and 4 million emergency room (ER) visits annually. The study found significant opportunities for improvement, or ways to ensure that patients receive the right medicines at the right time, and take them in the right way.

Medication non-adherence drives the largest avoidable cost, the report finds. Patients not adhering to their doctors’ medication guidance experienced complications that led to an estimated $105 billion in annual avoidable healthcare costs. But the growing use of analytics and collaboration among providers, pharmacists and patients appear to be advancing both the understanding and effectiveness of intervention programs.

Delays in applying evidence-based treatment to patients lead to $40 billion in annual avoidable costs. Of the four disease areas where patients either are not diagnosed early enough or treatment is not initiated promptly, diabetes resulted in the largest number of outpatient visits and hospitalizations. A reduction in this source of avoidable costs is possible if insurance coverage is expanded, and at-risk patients are able to receive appropriate screening and diagnostic testing, researchers note.

The report also finds that the misuse of antibiotics contributes to antimicrobial resistance and an estimated $34 billion each year in avoidable inpatient care costs. An additional $1 billion is spent on about 31 million inappropriate antibiotic prescriptions that are dispensed each year, typically for viral infections. Efforts to drive responsible antibiotics use are paying off, particularly in the declining number of prescriptions for the common cold and flu — viral infections that do not respond to antibiotics. The number of patients who inappropriately received antibiotics for colds or the flu dropped from 20 percent to 6 percent since 2007.

Many efforts are underway to address the underlying causes of avoidable spending and to improve medication use. Medication adherence among large populations of patients with hypertension, hyperlipidemia and diabetes has improved 3 to 4 percent since 2009, plus, an estimated 95 percent of patients now receive lower-cost generic alternatives to branded medications, when available.

In addition, a large number of initiatives are advancing across the healthcare landscape, including novel interventions, critical assessments of established solutions and pioneering models of stakeholder cooperation. Many of these initiatives involve a greater role for pharmacists, an integrated approach to addressing patient issues, alignment of financial incentives, and greater use of healthcare informatics to guide decision-making and monitor progress.

Source: IMS Institute for Healthcare Infomatics , June 19, 2013

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