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The American Journal of Managed Care October 2016
Cost-Effectiveness of a Statewide Falls Prevention Program in Pennsylvania: Healthy Steps for Older Adults
Steven M. Albert, PhD; Jonathan Raviotta, MPH; Chyongchiou J. Lin, PhD; Offer Edelstein, PhD; and Kenneth J. Smith, MD
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Economic Value of Pharmacist-Led Medication Reconciliation for Reducing Medication Errors After Hospital Discharge
Mehdi Najafzadeh, PhD; Jeffrey L. Schnipper, MD, MPH; William H. Shrank, MD, MSHS; Steven Kymes, PhD; Troyen A. Brennan, MD, JD, MPH; and Niteesh K. Choudhry, MD, PhD
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Sarah A. Stella, MD; Angela Keniston, MSPH; Maria G. Frank, MD; Dan Heppe, MD; Katarzyna Mastalerz, MD; Jason Lones, BA; David Brody, MD; Richard K. Albert, MD; and Marisha Burden, MD
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Economic Value of Pharmacist-Led Medication Reconciliation for Reducing Medication Errors After Hospital Discharge

Mehdi Najafzadeh, PhD; Jeffrey L. Schnipper, MD, MPH; William H. Shrank, MD, MSHS; Steven Kymes, PhD; Troyen A. Brennan, MD, JD, MPH; and Niteesh K. Choudhry, MD, PhD
The results of this simulation model suggest that implementing a pharmacist-led medication reconciliation intervention at hospital discharge could be cost-saving compared with usual care.

Objectives: Medication discrepancies at the time of hospital discharge are common and can harm patients. Medication reconciliation by pharmacists has been shown to prevent such discrepancies and the adverse drug events (ADEs) that can result from them. Our objective was to estimate the economic value of nontargeted and targeted medication reconciliation conducted by pharmacists and pharmacy technicians at hospital discharge versus usual care.

Study Design: Discrete-event simulation model.

Methods: We developed a discrete-event simulation model to prospectively model the incidence of drug-related events from a hospital payer’s perspective. The model assumptions were based on data published in the peer-reviewed literature. Incidences of medication discrepancies, preventable ADEs, emergency department visits, rehospitalizations, costs, and net benefit were estimated.

Results: The expected total cost of preventable ADEs was estimated to be $472 (95% credible interval [CI], $247-$778) per patient with usual care. Under the base-case assumption that medication reconciliation could reduce medication discrepancies by 52%, the cost of preventable ADEs could be reduced to $266 (95% CI, $150-$423), resulting in a net benefit of $206 (95% CI, $73-$373) per patient, after accounting for intervention costs. A medication reconciliation intervention that reduces medication discrepancies by at least 10% could cover the initial cost of intervention. Targeting medication reconciliation to high-risk individuals would achieve a higher net benefit than a nontargeted intervention only if the sensitivity and specificity of a screening tool were at least 90% and 70%, respectively.

Conclusions: Our study suggests that implementing a pharmacist-led medication reconciliation intervention at hospital discharge could be cost saving compared with usual care.

 Am J Manag Care. 2016;22(10):654-661
Take-Away Points
  • Medication discrepancies at the time of hospital discharge are common and can harm patients. 
  • Little is known about the economic value of implementing medication reconciliation by pharmacists and whether this intervention is more cost-effective when targeted to those most at risk of medication discrepancies. 
  • A medication reconciliation intervention that reduces medication discrepancies by at least 10% could cover the initial cost of intervention. 
  • Our results suggest that, despite the use of relatively costly pharmacists and pharmacy technicians, the cost savings from avoided rehospitalizations would more than offset the cost of the intervention.

Disruptions to, and changes in, a patient’s outpatient medication regimen occur frequently during hospitalization. This often results in discrepancies between drugs prescribed at discharge and the medications outpatient providers believe that patients should be on.1 Although the majority of such discrepancies do not have clinically important effects, their consequences can be profound. These events are defined as preventable adverse drug events (ADEs) because they are caused by medication discrepancies that could have been avoided. It is estimated that 2.4% to 4.1% of all hospital admissions are directly related to ADEs, and up to 69% of those ADEs are preventable.2-5 There are other circumstances in which the presence of a medication discrepancy has not yet resulted in an ADE, but may still be costly and/or may expose patients to the risks of additional testing or monitoring.6

Medication reconciliation by pharmacists at hospital discharge is a possible strategy to reduce medication discrepancies and subsequent ADEs. Several systematic reviews have found that medication reconciliation significantly reduces the risk of medication discrepancies.7-9 Despite this, not all studies evaluating the impact of medication reconciliation on health resource utilization (HRU) have found beneficial effects.10-19 These findings naturally raise questions about the economic value of this intervention and how the balance between the costs and benefits of the intervention could be optimized by, for example, selectively targeting high-risk patients.

Accordingly, we conducted a simulation-based cost-benefit analysis to estimate and compare the economic value of 3 strategies at hospital discharge: a) usual care (no intervention), b) nontargeted medication reconciliation for all patients, and c) targeted medication reconciliation that uses a screening tool to identify patients at high risk of postdischarge ADEs.


Overall Approach

We developed a 2-part discrete-event simulation to prospectively model the sequence of events that occur within the 30 days after hospital discharge for a hypothetical cohort of patients who did, and did not, receive medication reconciliation. Consistent with the existing literature,6 we categorized medication discrepancies that were associated with harm as preventable ADEs and those not associated with harm as “potential” ADEs. We categorized both preventable ADEs and potential ADEs into those that were (or were potentially) life-threatening, serious, or significant. Nonsignificant events were considered, by definition, to not be a medication discrepancy.

Our model first estimated the incidence of medication discrepancies, preventable ADEs, their associated major HRUs (ie, emergency department [ED] visits and rehospitalizations), and costs among patients who did not undergo reconciliation (Figure 1 [A]). We then used the distribution of outcomes from the initial phase of the simulation to compare the impact of 3 interventions (Figure 1 [B]): a) a nontargeted pharmacist-led medication reconciliation intervention for all patients, b) a targeted pharmacist-led medication reconciliation intervention in which only patients at high risk of ADEs were intervened upon, and c) usual care (no intervention). Our modeling approach and structure have been explained in the eAppendix (eAppendices available at

We used a cost-benefit analysis framework and conducted our analysis from the perspective of a hospital that was at risk for the added cost of any intervention and the savings from avoiding HRUs due to preventable ADEs. All costs were estimated in 2014 US dollars and, when necessary, unit costs were converted to 2014 prices using reported changes in the consumer price index.20 Considering the short period of analysis, no discount rate was applied. All simulations were developed using Arena version 12.00 (Rockwell Automation Technologies, Inc, Milwaukee, Wisconsin).

Patient Characteristics

The characteristics of the simulated cohort were assumed to be similar to populations in the studies that were the basis of our assumptions about event probabilities (Table 1).6 The model assumptions and event probabilities are based on data from the Pharmacist Intervention for Low Literacy in Cardiovascular Disease (PILL-CVD) study.6 In this randomized clinical trial, 851 patients hospitalized with acute coronary syndromes or acute decompensated heart failure were randomized to receive either a pharmacist-assisted intervention (ie, medication reconciliation, inpatient pharmacist counseling, low-literacy adherence aids, and individualized telephone follow-up) or usual care after hospital discharge. Similar to the trial population, the simulated cohort was assumed to have an average age of 60 years, have a median 14 years of education, and to be 60% male. We assumed that approximately 10% of the hypothetical cohort had inadequate health literacy and 8.7% had marginal, and that 11.5% had some level of cognitive impairment. We also assumed that approximately 60% of patients were hospitalized with acute coronary syndrome, 30% with acute heart failure, and 10% with both diagnoses.

Estimates of Medication Discrepancies and Subsequent Events

The incidences of medication discrepancies, preventable ADEs, and potential ADEs for patients not undergoing medication reconciliation were estimated using the distribution of observed events in the control arm of the PILL-CVD study.6 The distribution of events in the usual-care arm of PILL-CVD is summarized in eAppendix Figure A. In this study, 25 of the 125 (20%) patients with preventable ADEs were rehospitalized or visited an ED. Based on a case-by-case analysis of these patients by 1 study author (JLS), we determined that 24 of these ADEs were potentially amenable to medication reconciliation activities at the time of hospital discharge (as opposed to postdischarge activities, such as monitoring for ADEs).

The proportion of patients who had rehospitalizations, ED visits, or both events, was based on the observed rates in this trial6 and another large clinical trial.17 In the base-case analysis, we assumed that the intervention could reduce the risk of rehospitalization due to preventable ADEs, amenable to medication reconciliation, by 52% (ie, a relative risk of 0.48). This was based on an average effectiveness rate of medication reconciliation observed in 4 published studies of at least moderate methodological quality.11,14,15,21 The estimated effectiveness of the intervention may vary as a function of care setting, patient characteristics, composition of the healthcare team responsible for delivery of the intervention, and services that were bundled with medication reconciliation.7,8 As a result, we varied our assumptions of effectiveness extensively in the sensitivity analysis.

Patient Targeting

In order to estimate the impact of limiting medication reconciliation to high-risk patients (ie, those patients most likely to have a postdischarge ADE due to a medication discrepancy), we assumed that patients underwent screening with a tool that could predict, with some accuracy, the risk of ADEs based on the patient’s characteristics at the time of hospital discharge. A perfect screening tool could exactly discriminate patients with and without preventable ADEs, based on the information available at discharge, and would only assign the former to receive the intervention.

Given the sensitivity and specificity of this tool, we assigned patients into 4 categories: a) true positive, who would have had a preventable ADE and were assigned to receive the intervention; b) false positive, who would not have had a preventable ADE but were assigned to the intervention; c) false negative, who would have had a preventable ADE but were not assigned to receive the intervention; and d) true negative, who would not have had a preventable ADE and were not assigned to receive the intervention. We assumed that the effectiveness of targeted interventions was similar to that of the nontargeted strategy, in which medication reconciliation was offered to all patients.


Average cost per rehospitalization was based on recent estimates by the Agency for Health Research and Quality.22 The cost per ED visit was based on estimated charges in the same report, which were calculated by applying an estimated cost-to-charge ratio of 0.55.23,24 A 3% penalty rate was applied to all rehospitalization costs to reflect the current policies for readmission payment adjusted amount.25

Intervention costs were calculated using estimated average pharmacist time per reconciliation26 and average salary and benefit payments to pharmacists and pharmacy technicians.27 We assumed that pharmacy technicians, rather than pharmacists, conducted 50% of medication reconciliation-related tasks (eg, taking medication histories) in order to reduce the intervention cost. Pharmacists were assumed to supervise technicians and do some of the tasks, like patient counseling or order review, themselves. This assumption was varied in the sensitivity analysis. We also assumed that a medication history conducted by a pharmacy technician under a pharmacist’s supervision was as effective as that of one conducted by a pharmacist alone.28-30

Sensitivity Analysis

We performed extensive 1-way and 2-way sensitivity analyses to investigate the net benefit of medication reconciliation interventions under different assumptions for our model parameters, screening properties, and patients’ characteristics. A probabilistic sensitivity analysis also was performed to examine distribution of our point estimates, given uncertainty of the model parameters, by varying all of our model parameters simultaneously.31-33 We also reported credible intervals based on probabilistic sensitivity analyses that reflect uncertainty of simulated point estimates.


In a cohort of 10,000 patients not undergoing medication reconciliation, we estimated that 5090 would have at least 1 medication discrepancy within the first 30 days after hospital discharge. These medication errors would result in 3807 preventable ADEs and 5230 potential ADEs. Preventable ADEs would result in 421 rehospitalizations and 496 ED visits. Overall, the average cost of preventable ADEs was estimated to be $472 (95% credible interval [CI], $247-$778) per patient in the usual care strategy.

Medication Reconciliation for All Patients

Assuming that pharmacist-led medication reconciliation for all patients at hospital discharge could reduce medication errors by 52%, and therefore would reduce HRU due to preventable ADEs amenable to medication reconciliation by the same proportion, the number of rehospitalizations and ED visits related to preventable ADEs would be reduced to 199 and 215, respectively, with this strategy. This reduction in hospitalizations and ED visits would reduce the overall cost per patient to $266 (95% CI, $150-$423). This estimate includes the cost of medication reconciliation of approximately $39 per patient. Therefore, performing medication reconciliation for all patients at the time of hospital discharge would result in a significant net benefit of $206 (95% CI, $73-$373) per patient.

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