Health Affairs

The recent moves by states to bring their Medicaid prescription drug benefits under managed Medicaid plans has fully taken root: the percentage of Medicaid prescriptions filled under managed Medicaid plans jumped from 19 percent in September 2011 to 46 percent in June 2012. As yet, the impact this might be having on patient care has not been examined. While it is early days to see the impact on health outcomes and whether better preventive services are being provided at lower cost, any changes in the utilization of prescription drugs can be an early indicator of longer term impact.

At the IMS Institute for Healthcare Informatics, we have looked at four states — Kentucky, New Jersey, New York and Ohio — and compared changes in the use of anti-psychotic, respiratory and diabetes medications between patients who switched to managed Medicaid coverage and those who remained in fee for service. Although this is a limited-scale review, we thought this could be a useful contribution at a time when state (and federal) decision-makers are crafting plans that will have important long-term impacts on many Americans from 2014 on.

While our analysis shows there are early signs indicating a change in care received by patients, the lack of consistent measureable change suggests that states’ efforts to bring better care at lower costs to their Medicaid beneficiaries has yet to be fully realized.

With global spending on medicines likely to reach one trillion dollars by 2014, and growing concern about the cost-effectiveness of all parts of healthcare spending, an examination of the ways in which medicines are used is both timely and relevant to understand their impact on patient outcomes and the costs of delivering healthcare.

A recent report by the IMS Institute for Healthcare Informatics tackles the issue of understanding the linkage between responsible medicine use and health system costs. By examining six levers for improving medicine use, and developing an economic model to estimate global avoidable costs, the Institute was able to illuminate the magnitude of the opportunity for improvement – avoiding costs for health systems while maintaining or improving health outcomes.