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The American Journal of Managed Care March 2015
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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.
Average annual Medicaid costs (mean and 95% confidence intervals) were calculated for children experiencing each outcome using SAS 9.0 (Cary, North Carolina) (Table 2). Cost outcomes were modeled in TreeAge Pro using cost assumptions and observed outcome probabilities as shown in the branching tree model of the Figure. Projections of aggregated regional cost savings to the 14 state Medicaid programs were generated using these cost outcomes (with 95% confidence intervals) and an assumption of 86,312 children receiving new ICS-Rx each year. This was a conservative assumption, because it did not include those children already receiving ICS-Rx during the prior 90 days. A simple ROI calculation was then made to assess the potential ROI of a $10 per child per month intervention to increase to 50% the proportion of children sustaining an ICS/TAM ratio of >0.5 (from a baseline of 33.35%), and to find the break-even point when the cost of the intervention would be precisely matched by cost savings. ROI calculations were made using the following formula:

    Cost Savings – Cost of Intervention    
                Cost of Intervention


Table 3 shows the potential savings associated with raising the proportion of children who achieve a high ICS/TAM ratio after initial ICS-Rx. Increasing the proportion of children who maintain higher adherence after initial ICS-Rx to 40% would generate savings from decreased utilization of hospitals and EDs ($95 per child per year after subtracting the additional medication cost). Annualizing our count of the number of children receiving a new ICS-Rx (to account for our 3-month enrollment window and 3-month follow-up window) would give us an estimated 86,312 children aged 5 to 12 years who received a new ICS-Rx on Medicaid in 14 southern states in 1 year. The cumulative 1-year savings for these children that would be associated with a modest increase to 40% achieving high adherence would be nearly $8.2 million (95% CI, $8,154,758-$8,235,028). If the proportion of children with high adherence could be raised as high as 80%, the savings would be $666 per child per year in total Medicaid payments, representing a savings of more than $57.5 million for those 14 Medicaid programs. An intervention costing $10 per member per month that resulted in an increase to even half of children maintaining high adherence would generate a 98% ROI for state Medicaid programs or managed care plans. Net Medicaid costs decrease incrementally at each level of increase in ICS-Rx adherence.


Previous studies of Medicaid-enrolled children with asthma have documented quite low rates of ICS-Rx real-world adherence (ie, measured prescription drug refills) across a population not aware that adherence is being observed.16,17 Our simulations were based on real-world Medicaid cost and outcomes data stratified by adherence rates. We demonstrate a substantial potential cost savings with even modest improvement in adherence (eg, 40% of children maintaining an ICS/TAM ratio of ≥0.5). Depending on the costs, intensity, and effectiveness of interventions to improve adherence, the cost savings represent a potential ROI for state Medicaid programs or their capitated managed care plans if they invest dollars in increasing ICS-Rx adherence rates.

This assumes that the primary reason for lower utilization and costs among children achieving a higher use of ICS-Rx relative to their total asthma drug use is adherence. It is also possible that children who are adherent on medication may also be more adherent on other aspects of asthma management that are unrelated to medication adherence, such as lifestyle factors and avoidance of environmental triggers. While adherence to ICS-Rx is one biologically and clinically plausible explanation for this association, we are unable to measure other associated behaviors. Therefore, we can only document an association between higher adherence and lower ED visit use, but cannot rule out potential confounding by other positive self-management behaviors in children who also exhibit better adherence.

If adherence to ICS-Rx is one key element of reducing exacerbations and adverse outcomes, are there indeed effective interventions to improve adherence? Studies suggest that various approaches to asthma care management and self-management could be cost-effective. For example, a controlled trial of an intervention in which children received asthma education, treatment, and an assigned nurse demonstrated fewer ED visits and hospitalizations, and lower healthcare charges, for the children in the intervention group.18 In another randomized control trial of 220 asthmatic children, the intervention group was assigned parent mentors who provided asthma training and peer support. The children in the intervention group were more adherent to controller medications and experienced reduced symptoms and fewer ED visits.19 Other intervention programs, such as the Harlem Children’s Zone Asthma Initiative, showed that community-based programs can reduce environmental triggers and mitigate asthma-related health outcomes, including ED visits.20 These programs are often broader and have multiple process measures and targeted behaviors (eg, indoor trigger reduction, self-monitoring with peak flow, written action plans) beyond simple ICS-Rx adherence.21-23 While these may potentially have a broader impact, it is possible that simply focusing on ICS-Rx adherence could provide a more focused approach to single-behavior change and be a more cost-effective approach in the long run.

What is the cost of these interventions? Few studies have reported costs associated with their interventions, and many of these studies have had a limited sample size. In the parent peer counselor study by Flores et al, the cost per patient was $60.42, with a savings of $46.16 for participants who were more adherent.19 In a 2-year environmental intervention program conducted in 7 urban locations in the United States with families of 937 school-aged children, the cost of the intervention per family was $1469 (2001 dollars), or $27.57 per additional symptom-free day.24 A randomized trial with 1033 urban children of an educational intervention focused on controlling environmental triggers cost $337 per patient over 2 years, with an incremental cost-effectiveness of $9.20 per symptom-free day.25 The costs of these interventions therefore range from $5 per child per month to more than $60 per child per month.

None of these earlier studies demonstrated either the cost or the benefit associated with exclusively focusing on improving medication adherence. Clinical trials and observational studies have long demonstrated that improved use of ICS-Rx can be cost-effective in improving asthma outcomes and decreasing healthcare utilization, even relative to other long-term controller medications.26-29 Our data suggest that if an intervention could move adherence from baseline performance to a level of half of all children maintaining an ICS/TAM ratio of at least 0.5 at a cost of $10 per child per month, there would be a nearly 100% ROI. If the goal were simply to improve asthma outcomes with a return that covered the cost of the intervention, then programs could afford to spend $19.82 per child per month (zero net cost, zero financial ROI, but decreased adverse health events for children).

Medicaid programs have unique access to almost real-time data from pharmacy claims across their entire Medicaid population, and could potentially create automated ICS-Rx adherence surveillance systems and rapid-cycle feedback loops with costs spread across entire populations. These health information technology systems could potentially generate automatic provider and patient alerts for nonrenewal of ICS-Rx, as well as alerts for asthma-related ED use. Even small increments of increased ICS-Rx adherence would be cost saving. Greater impact could be achieved by linking the high-tech solutions (surveillance and alerts) to “high-touch” solutions, such as primary care case management, community health workers, school nurse/clinic programs, and/or parental peer counselors and group support.

If interventions demonstrate minimal or insufficient gains in ICS-Rx adherence, then we must begin to challenge our assumption that daily ICS-Rx adherence is a realistic population health strategy. While individual children and their families can succeed in achieving high adherence, and reasonable adherence can be achieved in the context of carefully supervised clinical trials, it has yet to be demonstrated that a large population of low-income children with persistent asthma can achieve ICS-Rx adherence rates of even 50%. If affordable interventions cannot move the adherence metric among large populations of low-income children with asthma, then alternative therapies with higher adherence among children (such as daily oral long-term controller medications) might be found to show higher real-world effectiveness, despite having somewhat lower efficacy in controlled clinical trials.


Despite the importance of this study, there are some limitations. First, there are the inherent problems associated with the use of claims data. We can tell how often an individual refills an ICS-Rx, but we cannot assure that the medicine was used properly. We also do not have access to clinical parameters such as symptom frequency, peak flow rates, and staging. However, Medicaid claims data do provide cost and outcomes data on a large population sample of asthmatic children, with a capacity to observe real-world prescription refill rates. We also did not have data more recent than 2007. However, these data are quite similar to data being generated in every Medicaid program across the country, with a potential for near real-time data surveillance on both adherence and outcomes.

Future Implications

Further research will be needed to test such a surveillance system and scalable interventions designed to impact all Medicaid-enrolled children with asthma receiving a new ICS-Rx across an entire state. Studies are also needed to explicitly assess the costs, impact on adherence, impact on outcomes, and return on investment (ROI) of various combinations of these high-tech/high-touch strategies for improving adherence to ICS-Rx and reducing preventable adverse outcomes among Medicaid-enrolled children with asthma.

Copyright AJMC 2006-2018 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
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