Costs and Utilization Associated With Pharmaceutical Adherence in a Diabetic Population

Published Online: February 01, 2004
Kera L. Hepke, MS; Mary T. Martus, RN, BSN; and David A. Share, MD, MPH

Objective: To determine whether adherence with pharmaceutical therapy affects well being and total costs associated with diabetes treatment.

Study Design: Retrospective cohort design using insurance claims in an open access, nonmanaged care setting.

Patients and Methods: Patients with diabetes were under age 65 years, continuously enrolled with medical and drug eligibility, and identified by using methodology based on the Health Employer Data and Information Set. Patients were identified in 1998. The level of adherence to drugs used for diabetes, utilization, and medical costs were measured in 1999. Regression analyses statistically controlled for age, sex, illness severity, and product line.

Results: Of the 57 687 patients identified with diabetes, 55% were male and 90% were age 40 years or older. Study members taking a prescription medicine for diabetes were significantly older and marginally sicker than those not taking a prescription medicine for diabetes. Patients without diabetic drug claims had the lowest medical costs, whereas younger patients and female patients had higher costs and utilization. A threshold effect was observed, where a target level of adherence was needed before medical care costs were reduced. Increased pharmaceutical adherence was associated with fewer emergency department visits and inpatient admissions. Increased medication adherence was associated with decreased medical care costs. Increased medication adherence was not associated with decreased overall healthcare costs because medication costs offset medical care cost savings.

Conclusions: Increased adherence with pharmaceutical therapy was associated with decreased use of medical care services, suggesting improved disease control and well being, but not with lower costs.

(Am J Manag Care. 2004;10(part 2):144-151)

The Centers for Disease Control and Prevention estimates that approximately 11.1 million people in the United States have been diagnosed with diabetes and an additional 5.9 million people have the disease but have not yet been diagnosed.1 Diabetes is the leading cause of new cases of blindness, end-stage renal disease, and lower extremity amputations in working-age adults and the fifth-leading cause of death by disease in the United States.2 In addition, people with diabetes are 2 to 4 times more likely than the general population to have heart disease or experience a stroke.1

Not only are serious health burdens associated with the progression of diabetes, there also are significant economic consequences. On average, the cost of healthcare for a person with diabetes in 2002 was 5 times more than the cost for a person without diabetes.3 The American Diabetes Association estimated that $132 billion in expenditures were attributable to the direct medical costs and indirect costs (premature mortality and disability) associated with the disease in 2002.2

Many of the complications associated with diabetes can be delayed or prevented through improved disease management and self care, including aggressive management of cardiovascular risk factors; early identification and treatment of hypertension, kidney disease, retinopathy, peripheral neuropathy and vascular disease; and increased glycemic control through diet, exercise, and/or taking insulin or oral diabetes medications.

Long-term prospective studies have established that improved blood glucose control reduces the risk of onset and slows the progression of complications in people with type 1 and type 2 diabetes. The Diabetes Control and Complications Trial, results of which were published in 1993, established that intensive therapy of patients with type 1 diabetes delays the onset and slows the progression of retinopathy, nephropathy, and neuropathy by 50% to 70% compared with conventional treatment regimens.4 The United Kingdom Prospective Diabetes Study, results of which were published in 1998, demonstrated an overall 25% decrease in microvascular complications among patients with type 2 diabetes who had intensive glucose-lowering therapy compared with conventional therapy.5 Although adherence to medication regimens is crucial to achieving glycemic control and preventing microvascular complications, a number of studies have indicated many people with type 2 diabetes do not use medications as prescribed.6-9

According to a report by the Task Force for Compliance 10 medication nonadherence is a pervasive problem. The Task Force report cites numerous studies that demonstrate patient failure to fill or refill prescriptions and lapses in the continuity of dosing regimens, and notes that compliance is especially low for patients who have chronic diseases not associated with symptoms or in which the symptoms occur erratically. The annual cost of medication noncompliance, including hospital and nursing home admissions, increased ambulatory costs, lost productivity, and premature deaths, has been estimated at over $100 billion per year in the United States.11

To what extent does adherence with pharmaceutical therapy affect well being and total costs associated with the treatment of diabetes? Using administrative data, we examined a large, insured segment of Michigan's population to:

  • Develop a methodology to assess adherence with medications used for diabetes.
  • Examine the relationship between adherence with medications used for diabetes and overall costs of care (medical and pharmaceutical).
  • Determine whether adherence with medications used for diabetes affects well being, as reflected in rates of emergency department visits and inpatient admissions.


Study Population

The study involved a retrospective cohort design using Blue Cross Blue Shield of Michigan (BCBSM) claims in an open-access Traditional indemnity and preferred provider organization (PPO) insurance setting. The Traditional indemnity plan refers to fee-forservice health insurance in which members have free choice of physicians, whereas the PPO offers members incentives for using a selected network of participating providers instead of other providers.

Patients with diabetes were identified based on healthcare claims for care provided in calendar year 1998. Claims incurred in calendar year 1999 were used to assess pharmaceutical use, medical costs (defined as BCBSM payments agreed to by participating providers and facilities), and utilization rates.

The eligible study population included all non- Medicare-eligible Michigan residents who were continuously enrolled for calendar year 1999 in a Traditional indemnity or PPO product. In addition, to ensure no coverage gaps, study members had facility, professional, and pharmaceutical benefit coverage.

The National Committee for Quality Assurance Health Plan Employer Data and Information Set (HEDIS®) specifications for identifying patients with diabetes, which rely on administrative and medical record data pertaining to HMO members, were modified for use in an open-access product with administrative data only. To be classified as a patient with diabetes, an individual must have met 1 of the following criteria in calendar year 1998:

  1. At least 1 inpatient or emergency department claim with a primary or secondary diagnosis of diabetes (International Classification of Diseases, 9th Revision [ICD-9] 250, 352.2, 362.0, 366.41, 648.0).
  2. Two professional or outpatient facility claims (incurred a minimum of 30 days apart) with a diabetes diagnosis.
  3. A filled prescription for insulin and/or an oral hypoglycemic agent.

Patients with claims reflecting gestational diabetes or patients who died in the hospital were excluded from the analysis.

Assessment of Pharmaceutical Use

Adherence measurement was based on filling a prescription used for diabetes (insulin or an oral hypoglycemic agent). For each prescription filled for diabetes, the purchase date of the prescription was recorded. Next, an end date for each prescription was calculated by adding the number of days supplied to the purchase date. This was repeated for each prescription filled for diabetes between the fourth quarter of 1998 and the end of calendar year 1999. The fourth quarter of 1998 was used to calculate those prescriptions for which the days supplied extended into calendar year 1999. Then for each day of the year (January 1, 1999 = day 1; January 2, 1999 = day 2; … December 31, 1999 = day 365), it was determined whether the patient possessed any diabetic drug (yes = 1, no = 0). The outcome for each day was summed across the year, resulting in a range of 0 to 365 days. The medication adherence rate was calculated as percentage of days (rounded to the nearest percentage) that the patient possessed any available diabetic drug during the year, using the equation:


Medication adherence rates ranged from 0% (no claims) to 100%. The closer the adherence rate was to 100%, the more adherent the member was ("adherence" was defined in this study as days with filled prescriptions for diabetic medication). Finally, each study member was placed into 1 mutually exclusive adherence category, defined as 0%, 1% to 19%, 20% to 39%, 40% to 59%, 60% to 79%, 80% to 99%, or 100%. Within each adherence category, members were assessed for costs and utilization of medical care.

It is important to recognize that study members in the 0% drug adherence group either (1) controlled their diabetes through diet and exercise alone, without the aid of diabetic medications; (2) filled prescriptions under another health plan; or (3) did not fill their diabetic prescriptions as recommended.

Assessment of Costs and Utilization of Medical Care

Resource assessment for each diabetic study member included the costs and services incurred for inpatient hospitalization, outpatient care, emergency care, clinic visits, laboratory tests, professional services, and pharmaceuticals in calendar year 1999; however, claims from skilled nursing facilities and home healthcare were excluded.

Three analyses were performed on the cost information (Table 1). First, the overall cost of healthcare (medical and pharmaceutical) for study members was analyzed, which included costs related and unrelated to diabetes care. The second and third analyses focused on costs (medical and pharmaceutical) related to care with a diabetes diagnosis.

Table 1

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