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Potential Savings From Increasing Adherence to Inhaled Corticosteroid Therapy in Medicaid-Enrolled Children
George Rust, MD, MPH, FAAFP, FACPM; Shun Zhang, MD, MPH; Luceta McRoy, PhD; and Maria Pisu, PhD
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Potential Savings From Increasing Adherence to Inhaled Corticosteroid Therapy in Medicaid-Enrolled Children

George Rust, MD, MPH, FAAFP, FACPM; Shun Zhang, MD, MPH; Luceta McRoy, PhD; and Maria Pisu, PhD
Increasing adherence to inhaled corticosteroids for Medicaid-enrolled children with asthma could cost-effectively decrease both Medicaid spending and adverse clinical outcomes.
Many asthma-related exacerbations could be prevented by consistent use of daily inhaled corticosteroid therapy (ICS-Rx).

Objectives: We sought to measure the potential cost savings that could accrue from increasing ICS-Rx adherence in children. Study Design: We measured observed costs for a cohort of 43,156 Medicaid-enrolled children in 14 southern states whose initial ICS-Rx was prescribed in 2007.

Methods: Adherence rates and associated costs were calculated from Medicaid claims. Children were categorized as high or low adherence based on the ratio of ICS-Rx claims filled to total asthma drug claims. Branching tree simulation was used to project the potential cost savings achieved by increasing the proportion of children with ICS-Rx to total asthma Rx ratios greater than 0.5 to 20%, 40%, 60%, 80%, and 100%.

Results: Increasing the proportion of children who maintain higher adherence after initial ICS-Rx to 40% would generate savings of $95 per child per year. An intervention costing $10 per member per month that resulted in even half of the children maintaining high adherence would generate a 98% return on investment for managed care plans or state Medicaid programs. Net costs decreased incrementally at each level of increase in ICS-Rx adherence. The projected Medicaid cost savings for these 14 states in 2007 ranged from $8.2 million if 40% of the children achieved high adherence, to $57.5 million if 80% achieved high adherence.

Conclusions: If effective large-scale interventions can be found, there are substantial cost savings to be gained from even modest increases in real-world adherence to ICS-Rx among Medicaid-enrolled children with asthma.

Am J Manag Care. 2015;21(3):173-180
Substantial cost savings may be gained from even modest increases in real-world adherence to inhaled corticosteroid therapy among Medicaid-enrolled children with asthma. For example:
  • Increasing the proportion of children who maintain higher adherence to 40% would generate savings of $95 per child per year.
  • An intervention costing $10 per member per month that resulted in an increase to even half of the children maintaining high adherence would generate a 98% return on investment.
  • Increasing the proportion of children who maintain higher adherence to 80% would generate Medicaid cost savings of $57.5 million in the 14 states studied.
Nearly 7 million children (9.3% of population aged 0-17 years) in the United States are currently diagnosed with asthma.1,2 Asthma is among the top 10 diagnoses leading to emergency department (ED) visits among children, accounting for 641,000 visits in 2010.3 However, with effective asthma treatment and self-management, most ED visits and hospitalizations related to asthma could be prevented.

While there are many components of an asthma management plan for preventing exacerbations and achieving long-term control, a critical measure is the consistent use of daily anti-inflammatory agents for patients with persistent asthma. Data from randomized controlled clinical trials specifically suggest that inhaled corticosteroid therapy (ICS-Rx) can improve pulmonary function and decrease symptoms,4,5 as well as decrease the risk of hospital admissions and ED visits.6,7 According to an expert panel cited by the National Asthma Education and Prevention Program, “ICSs are the most potent and consistently effective long-term control medication for asthma.”8 In a Canadian observational study, Suissa et al calculated that asthma mortality was reduced by 21% for each additional canister of ICS-Rx used in the previous year, and that discontinuing ICS-Rx also conferred an increased 90-day risk of death.9 ICS-Rx is more cost-effective than other long-term controller options10; however, while daily preventive use of ICS-Rx can have a substantial impact in reducing adverse outcomes, real-world adherence to ICSRx among Medicaid-enrolled children is unfortunately quite low.11,12

Multidimensional interventions targeting various self-management behaviors (including adherence) have been tested on a small scale, but are costly to implement on a large scale across entire state Medicaid populations. A more targeted approach focusing only on medication adherence using a prescription refill claims data feedback loop might be more cost-effective, but supporting evidence is lacking and programs of this scale are unlikely to be initiated unless there is a plausible expectation of a return on investment (ROI). An understanding of the upper bounds of rational investments in these adherence-boosting interventions and the potential ROI requires estimates of the potential cost savings that could be generated in total Medicaid claims by reducing preventable hospitalizations and ED visits. Therefore, we undertook this study to simulate the cost impact of achieving various levels of increase in ICS-Rx adherence levels among elementary school–aged children (5-12 years) initially receiving a new ICS-Rx for asthma.


Data Sources

Analyses were performed on a cohort of school-aged children with asthma drawn from a 100% sample of 2007 Medicaid Analytic eXtract (MAX) claims data from 14 southern states: Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Missouri, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia. These data include one-third of the entire US Medicaid population and nearly half of all African American Medicaid enrollees, and focus on a region with high racial/ethnic disparities and relatively poor health outcomes. The personal summary files provided person-level data regarding Medicaid eligibility, enrollment, and total paid claims, while the MAX inpatient (IP), outpatient/other (OT), and prescription drug (Rx) files provided encounter-level claims for all Medicaid-paid services, including hospitalizations, ED visits, OT services, and prescription drugs.

Sampling Frame

There were 839,684 individual persons in the 2007 Medicaid claims data set that met our diagnostic criteria for asthma: individuals with at least 1 IP admission or 2 OT visits on separate dates with a diagnosis code of asthma (International Classification of Diseases, Ninth Revision, Clinical Modification code 493.XX, excluding 493.2X). We focused on the 239,167 children with asthma aged 5 to 12 years, because they are amenable to known interventions that include clinical practice improvement, care management, family support, community interventions, and school-based asthma care and policies. Among this cohort of children with asthma, 122,174 (51.1%) had billed claims for ICS-Rx. We then focused on the 43,156 children who had no ICS-Rx claims in the 90 days before their initial ICS-Rx and who received their first ICS-Rx before September 30, 2007, to allow us to track outcomes for at least 3 months after ICS-Rx initiation. To estimate the annual Medicaid costs associated with a full year of children experiencing a new ICS-Rx, we annualized our cohort, estimating 86,312 children with a new ICS-Rx each year in these 14 states.

Model Structure

The basic modeling approach was a decision tree model developed in TreeAge Pro 2012 (TreeAge Software, Williamstown, Massachusetts) to simulate Medicaid costs for children experiencing various outcome possibilities during the 90-day window of observation, including no ED visit and no hospitalization, ED visit only, hospitalization only, and ED visit with hospitalization as a function of high adherence or low adherence to ICS-Rx asthma medications (Figure). The model was structured to reflect total full-year Medicaid-paid amounts for children experiencing this limited range of possible events during the first 3 months after initial ICS-Rx.

The structure of the model in TreeAge is illustrated in the Figure. The first branch is the choice node, reflecting the actual and then the simulated proportion of children who maintain high (ICS-Rx to total asthma Rx claims ≥50%) or low (ICS-Rx to total asthma Rx claims <50%) adherence. Each of these adherence groups then branches into 4 outcome groups based on probabilities determined by the healthcare utilization observed in the Medicaid claims in the 90 days immediately after initiation of ICSRx. Ninety-day costs for each outcome group were calculated based on Medicaid-paid claim amounts within each of the 2 simulated adherence groups, plus any prescription drug costs that would be associated with higher adherence levels. Costs were then annualized to represent potential yearly savings if these adherence levels could be sustained.

Model Input Parameters & Variables

The primary input parameters for the model are summarized in Table 1. They include the probability of 2 branches on the choice node—high versus low adherence to asthma ICS-Rx medication—and probabilities of 4 possible outcome states: no ED visit and no hospitalization,ED visit only, hospitalization only, or both ED visit and hospitalization. The probabilities and costs associated with different adherence groups were obtained from the claims data of the full cohort of children with asthma receiving an initial ICS-Rx in the 14 states. Economic outcomes are presented as annual total Medicaid costs per patient associated with different adherence and outcome groups (including added Rx cost of increased adherence levels), adjusted for a 1-year period. The details of these model parameters are presented below:

ICS-to-total asthma medication ratio. Common measures of medication adherence include proportion of days covered or proportion of prescribed days covered, which are useful measures for differentiating provider prescribing rates from patient refill rates.13 However, such simple measures of adherence can actually increase in parallel with increased refills of rescue medication such as a short acting beta-agonist (eg, albuterol) or an anti-cholinergic (eg, ipratropium), and show a spuriously positive association with ED visit rates. Individuals who have more asthma visits and who receive more asthma rescue medication also have a higher probability of being prescribed an inhaled corticosteroid, and also have a higher probability of having the need for ICS-Rx adherence reinforced at every visit to the physician or pharmacist.

It has become reasonably well accepted in Medicaid-based asthma research to use the ratio of long-term controller prescriptions to total asthma drug prescriptions, which more accurately reflects the benefits of long-term controller drugs on outcomes.14 The long-term controller to total asthma medication ratio expresses controller medications as a percentage of total asthma medication claims, which includes both controller and short-term reliever medications.15 This measure has been validated in administrative claims data, including high correlation (0.94) between use of 2-quarter claims and full-year claims.14 We focused on the specific subset of ICS-Rx as the most important and effective component of long-term controller therapy, using an ICS-Rx to total asthma medication (ICS/TAM) ratio, which we have previously shown to be predictive of risk for asthma-related ED visits. 12 We categorized this variable into 2 groups: high ICS/TAM ratio (≥0.5), and low ICS/TAM ratio (<0.5). We first simulated the decision tree model using observed probabilities and adherence, and then ran the simulation raising the proportion of children in the high-adherence arm to 40%, 50%, 60%, 70%, 80%, 90%, and 100% to assess the impact of improving ICS-Rx adherence rates on overall costs and outcomes.

ED visit. ED services are found in IP and OT files depending on whether the Medicaid beneficiary was or was not admitted to the hospital within the 90-day period after ICS-Rx initiation. For those Medicaid beneficiaries seen in the ED but not admitted to the hospital, services were identified from the OT file using revenue center code values of 0450-0459 and 0981. Those who were seen in the ED and admitted to the hospital were identified from the IP file, using revenue center code values of 0450-0459 and 0981. Other charges associated with ED services were identified in the IP file by place of service, coded as ED. We counted all ED visits among children with asthma in our cohort rather than just those ED visits coded with a primary diagnosis of asthma, because some ED visits prompted by increased wheezing or breathing difficulties can be miscoded as a triggering event (eg, an upper respiratory infection), or a complicating event (eg, a secondary pneumonia), or as nonspecific diagnoses (eg, acute bronchitis, reactive airway disease). Since ICS-Rx adherence would not be expected to reduce or increase ED visits for causes entirely unrelated to asthma, counting all-cause ED visits would be the more conservative approach and would tend to underestimate the benefits of ICS-Rx adherence. After unduplicating any encounter claims occurring on the same date, we found all ED visits in both IP and OT settings during the follow-up period, and then categorized the ED visit variables as dichotomous (yes/no).

Hospital admission. Hospital admissions were captured in the IP files. We categorized hospital admission as dichotomous (yes/no) and determined the probability of hospital admission for both high-adherence and low-adherence groups.

Cost outcomes. Economic outcomes at the terminal nodes of each branch reflect the projected annual total Medicaid paid amounts for children in each outcome group based on 90-day actual costs for asthmatic children experiencing each outcome category, plus the additional cost of prescription drugs associated with different levels of ICS-Rx adherence. All costs were annualized.


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