Robert S. Oscar, R.Ph. CEO/president of RxEOB, has more than 25 years of experience in healthcare, having developed and implemented successful programs to effectively manage pharmacy benefit risk, including pioneering work in the Medicare HMO market. In 2

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While it appears there is very little most Americans can agree on when it comes to healthcare these days, one exception is that prescription drug therapies cost too much.

Whether the plan is government-sponsored or commercial, in a blue or red state, aimed at Boomers or millennials, or any other permutation, the feeling is 

 and threatening to go even higher-unless someone does something about it. By which people mean the government, despite all the risk and disruption legislation and regulation can bring.

Whether at the federal or state level, politicians on both sides of the aisle have been talking a great deal lately about finding ways to lower the cost of prescription therapies. But so far that’s all it’s been-talk. In the meantime, prescription drug prices continue to rise, and members must cover large and increasing out-of-pocket costs for the medications they need. On the member side, these high costs can lead to difficult choices-especially for Medicare and Medicaid members.

Some members will look to stretch their supply of medications by taking smaller doses or taking them every other day instead of every day. Others may forego them entirely when faced with the choice of paying for medications or purchasing other necessities such as food or rent. Still others may sacrifice their own medications so their children can get the care they need. No matter which choice they make, however, their health outcomes are negatively affected, reducing their quality of life while increasing their health plans’ long-term costs.

The good news for health plans (and their members) is they don’t have to risk a political solution to reduce the patient’s out-of-pocket cost for drugs. Instead, they can use a combination of machine-learning (ML)-based predictive analytics and hypertargeted communications to inform members about lower cost (but equally effective) alternative therapies-both generics and therapeutic equivalents-and motivate them to either make the change themselves or speak with their physicians about their options. Here’s a look at how that might work.

For this hypothetical example we will use a multi-state health plan with 250,000 covered lives including Medicare, Medicaid, and commercial members. Using pre-configured drug-switching rules, the analytics will look for members taking non-preferred products who have not previously tried (and failed) the lower-cost alternatives. The targets include members taking 200 name brand drugs which could be converted to lower cost generics, and 20 classes of high-cost drugs that could be converted to lower cost therapeutic equivalents.  

These analytics yield a total cohort of 2,083 members who are presumed to be unaware that there are lower-cost alternatives to the medications they’re currently using.

Once the targets have been confirmed, the payer begins its efforts to inform those members about alternatives. Rather than simply sending out generic messages, however, they use the analytics to search the members’ history, demographic and sociographic profiles, etc. to give them information they can use to create hyper-targeted, personalized messages that address each member’s specific needs and concerns.

The most obvious example is a message informing a member that he/she is currently paying $X per month for a particular medication, resulting in a cost of $XX per year if taken as-prescribed. But by switching to the preferred alternative, the member can reduce that cost by $Y for a total out-of-pocket expense of $YY.

Payers can also use patterns in paid claims to detect when members are attempting to “stretch” a prescription across additional days, a strategy that can render the medication ineffective. A message can be created saying, “we understand how expensive it can be to take medication X each day, and that it can be tempting to try to make it last longer by not taking it as-prescribed. But to produce the best health results it is important for you to take your medication as prescribed. To address both needs, we can recommend this generic or alternative therapy that will deliver the same results at a substantially reduced cost, helping you gain the full benefits of your medications while fitting your budget better. Talk to your doctor about it.”

By using analytics to determine what challenges members may be facing, and then hyper-targeting the messages to show how moving to a generic or therapeutic equivalent will help members achieve their best health outcomes while addressing their financial concerns, payers can help drive the behaviors they desire more effectively.

How much can a health plan expect to save through these efforts? Based on our clients’ experience, the analytics show that of the 196 members targeted to switch from a branded drug to the generic equivalent, 45 will be converted-a rate of 23%. That yields an estimated savings per conversion of $3,392.73, or $152,673 per year.

The 1,943 candidates for conversion to a generic therapeutic equivalent (i.e., switch from one generic to a different but therapeutically equivalent generic) will typically yield a 5.5% conversion rate. Those 107 members will deliver a savings per conversion of $1,467.89 for total estimated savings of $157,064. Finally, the 907 candidates for shifting from the non-preferred brand to a branded equivalent are expected to convert at a rate of 7.4%. These 67 members will generate savings of $667.83 per conversion for a total estimated savings of $44,823.

The total net result is a blended conversion rate of 7.2%, which generates $354,560 in annual savings and a per member per year (PMPY) cost reduction of $1.42. All while making the cost of medications more affordable for their members.

There is always risk that federal and state governments will act to help rein in the high cost of prescription medications, given the current political climate.  That doesn’t mean payers are stuck doing nothing, however. By applying the right ML-based and other analytics to their data and using the results to send hyper-targeted messages to members, payers can take the lead in bringing skyrocketing drug prices back under control in a way that benefits the members-and their own bottom lines.

Robert Oscar, RPh, is chief executive officer, RxEOB, Richmond, Virginia. RxEOB is a leader in the health informatics and technology industry, serving millions of health plan memnbers.

Articles

Why lowering drug costs can start with machine learning and better patient interaction.

How Hypertargeting Patient Communication Lowers Drug Costs

	Medication non-adherence is a growing issue for patients, physicians and health plans. A 

 by the United States Government Accountability Office indicated that in each fiscal year from 2009 through 2011, the most expensive 5% of Medicaid-only enrollees accounted for almost half of the expenditures for 

Medicaid-only enrollees. In contrast, the least expensive 50% of Medicaid-only enrollees accounted for less than 8% of the expenditures for enrollees.  

	Patient nonadherence to prescribed medications is associated with poor therapeutic outcomes, progression of disease, and an estimated burden of billions per year in avoidable direct healthcare costs.

	Beyond medication non-adherence for Medicaid enrollees, the total costs to the U.S. healthcare system for non-compliance include a direct cost estimated at $100 billion to $289 billion annually and costs of $2000 per patient in physician visits annually, according to the CDC.

Read: Ten ways to boost medication adherence

	It’s clear that medication adherence needs to be a key area of focus for plans and providers hoping to provide higher-value care. Here’s how offering messaging to patients through their preferred channels of communications can help.  

	For health plans and providers, understanding the what, when and how of personalized messaging delivery is critical to more compelling engagement with patients.

 noted by the American Heart Association, the potential of text messaging and other mobile-phone based methods (mobile health or mHealth) to engage patients has been met with great enthusiasm because of the relatively low cost, transportability, and widespread use of mobile technologies. 

	Creating a personalized healthcare messaging program for patients via text messaging, email, portals and other outreach programs should begin with determining and accommodating the patient’s preferred method of communication.

	This can be determined through programs that request a response from patients regarding their preferences.

	Health plans and providers should consider content for messaging that reflects the language preference of the member, healthcare savings topics that are determined using the patients’ current benefits, and health improvement tips that offer social network site support that are of value to the patient.

	Creating a coupon offer for a free screening at a healthcare services location that is close to the patient suggests to the patient that the health plan or provider understands the patient’s interest in convenience, while delivering medication reminders via mobile messaging can be an impetus to adhere to medication guidelines to help raise adherence and lower costs associated with non-compliance.

 using text message reminders for diabetes patients has shown success for enhancing patient support and self-care for chronic conditions.

	The program showed an average decrease of HbA1c levels from 7.9% to 7.2%, while individuals that had the most poorly controlled HbA1c levels dropped from 10.3% to 8.5% in only six months.

	The total cost of care declined $812 per participant, reflecting a savings of $1,332 in inpatient, outpatient and emergency department visits, offset by a $520 increase in drug costs, according to program researchers.  

	The ability to use a variety of different messaging platforms, including text messaging, email and portals, to reach patients to raise adherence rates and lower non-compliance costs will be critical for health plans and providers.

	As health plans continue to see their medical losses climbing higher for their covered patients, they will quickly see that deploying innovations within the areas of mHealth could offer them the best approach for improving patient access to care and quality of care.

Robert S. Oscar, RPh, CEO/President of RxEOB, has more than 25 years of experience in healthcare

RxEOB assists health plans, PBMs and their patients with software applications and services to reduce costs and improve care quality. 

Medication non-adherence is a growing issue for patients, physicians and health plans. Here’s one effective solution.

Effective patient messaging drives higher value healthcare

, according to The Commonwealth Fund. Despite the high cost of healthcare, American doctors and patients rate the U.S. healthcare system lower than its cohorts on most performance dimensions, from patient outcomes to access, efficiency, and equity.

	One proven method of improving those performance dimensions is mobile health, or mhealth. It offers new strategies for meeting healthcare needs. These strategies are more efficient and convenient for the patient, and they streamline the management of chronic diseases and pharmacy utilization.

	Mobile Health also helps improve flagging performance dimensions while decreasing costs through time savings, fewer hospital readmissions (up to 44% in 

), and better patient outcomes, especially with traditionally hard-to-reach populations like the homebound or patients in rural areas.

	By focusing on certain trigger points in the patient’s health cycle, like appointment reminders, medication reminders and even educational opportunities through mobile devices, patients receive the information and guidance they need to become active participants in their healthcare.

	Similar to the strategy used successfully by marketers to 

, mHealth prompts plan members to act as consumers of their own health and wellness.

	Since more than 50% of payers intend to invest in some type of 

, learning to use the medium is a critical advantage to providing the highest return on investment. Here are eight ways to maximize mHealth.

, 500 million mobile users worldwide are now using a healthcare app. Patients aren’t the only users, they also include professionals and caregivers. Apps can be developed for pharmacy benefits, provider networks, preventative care or general managed care. They can range from texted appointment reminders (for more, see the next slide); to on-demand, paid video appointments with doctors; to apps that take an accurate cardiogram and send the results directly to a physician. In 2013, FDA issued its protocol for overseeing 

. They must approve any apps that would put patients at risk if they don’t work as intended, and any apps with technology that can impact the functionality or performance of traditional medical devices.

	Using healthcare messaging allows providers to take advantage of texting and push notification technology. This can reduce costs by decreasing the traditional, more costly contact methods like phone calls and mailers. It also lets consumers receive the info in the method they prefer. One survey found that 68% of patients 

feel comfortable when their doctor uses digital technology

 to automate administrative functions. In addition to appointment reminders, messaging can also include reminders, wellness and medication adherence.

	Due to increased copays and higher deductibles, the consumer’s cost-share of healthcare is growing. One way to help patients improve their health, which also cuts costs and improves patient outcomes, is to send wellness reminders. 

 that text messaging helps patients with smoking cessation and diabetes management. Wellness reminders also improve treatment compliance, such as medication adherence and doctors’ appointment attendance.

	Only 50% of American consumers take their medications properly and even fewer get their prescriptions refilled. This poses a pricey issue for managed care as the cost for medication-related hospital visits totals approximately 

 a year, according to one study. Mobile health solutions can help lower this expense by targeting consumers with reminders to fill, take and refill their prescriptions. Because most patients find technology inviting rather than intimidating when it comes to helping them manage their health, using mHealth to push for better medication adherence can also improve consumer satisfaction.

	More healthcare data is being captured than ever before. Smartphone apps are just the beginning, as data will also be collected from wearables like Fitbit and Jawbone, as well as the data from doctors, managed care companies, pharmacies and more. This information will be 

 from millions of other patients and used for predictive modeling, early diagnosis and treatment of illnesses.

	mHealth can be used to obtain information such as blood pressure, weight, blood sugar and even cardiac function. This real-time data can be used to more effectively manage chronic illnesses and predict when an intervention is necessary. 

 are already moving into the remote monitoring marketplace. Remote monitoring is especially useful for homebound patients or patients in rural areas, where doctors anywhere in the world can continuously track both healthy and at-risk patients. Catching and correcting conditions early should reduce costs and improve outcomes. The main issue with remote monitoring, in addition to pulling data from multiple platforms, is getting doctors paid equitably for the new service.

, has proven to increase patient satisfaction, reduce post-surgery problems and improve patients’ quality of life. Technology applications include chronic disease management, surgery prep and wellness. Potential outcomes include reduced hospitalizations and costs, plus increased customer satisfaction.

	Whether it’s drug utilization, prior authorization or formulary management, reporting is a critical aspect of managed care. Noncompliance issues are costly in regards to lost time and labor, and they can be detrimental to a healthcare organization’s overall standing. Taking advantage of mHealth solutions that allow reporting to be handled in real-time on any mobile device can streamline administrative tasks that many managed care companies have to deal with on an ongoing basis.

Robert S. Oscar, R.Ph. CEO/president of RxEOB, has more than 25 years of experience in healthcare, having developed and implemented successful programs to effectively manage pharmacy benefit risk, including pioneering work in the Medicare HMO market. In 2000, he founded RxEOB, a provider of software and mHealth solutions for PBMs and health plan providers. 

Learning to use mobile health or mhealth is a critical advantage to providing the highest return on investment for plans and providers.

Robert Oscar

Articles

How Hypertargeting Patient Communication Lowers Drug Costs

Effective patient messaging drives higher value healthcare

Eight ways managed care should be using mHealth