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The American Journal of Managed Care April 2017
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The Relationship Between Adherence and Total Spending Among Medicare Beneficiaries With Type 2 Diabetes
Joanna P. MacEwan, PhD; John J. Sheehan, PhD; Wes Yin, PhD; Jacqueline Vanderpuye-Orgle, PhD; Jeffrey Sullivan, MS; Desi Peneva, MS; Iftekhar Kalsekar, PhD; and Anne L. Peters, MD
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Barak D. Richman, JD, PhD; Nick Kitzman, JD; Arnold Milstein, MD, MPH; and Kevin A. Schulman, MD

The Relationship Between Adherence and Total Spending Among Medicare Beneficiaries With Type 2 Diabetes

Joanna P. MacEwan, PhD; John J. Sheehan, PhD; Wes Yin, PhD; Jacqueline Vanderpuye-Orgle, PhD; Jeffrey Sullivan, MS; Desi Peneva, MS; Iftekhar Kalsekar, PhD; and Anne L. Peters, MD
This study describes a widespread variation in medication adherence, pharmacy cost sharing, and medical spending. Increased cost sharing may decrease adherence and increase total diabetes spending.
This study corroborates previous research and suggests that increasing adherence among Medicare beneficiaries with T2D could generate significant cost savings.17 The use of pharmacy cost sharing in Medicare has gone up since the introduction of Medicare Part D, which extended pharmacy benefit coverage and increased pharmaceutical utilization,29 but the availability of generic drugs has prevented significant increases in OOP spending. If this cost-sharing trend continues, adherence may fall and any savings on pharmacy spending could be offset by increased medical spending.16 Recent proposals to limit annual OOP spending for Medicare beneficiaries would reduce the financial burden on high-spend Medicare beneficiaries with T2D, potentially improving medication adherence and health outcomes.30


This study has certain limitations. The analysis was descriptive, with data randomly drawn from an administrative claims database representing the years 2006 to 2009. Although the levels of pharmacy and medical spending may have changed since 2009, our qualitative results and the correlations between cost sharing, adherence, and medical spending should not be impaired by the age of the data, as many similar studies have found the same relationships in other patient samples and time periods.4-14 Additionally, because the study drew from the Medicare database, and because only patients 65 years or older at the time of the first observed T2D diagnosis claim were included, the mean age of the sample (74 years) was higher than the average age of T2D diagnosis (54 years) in the United States.31 Last, only limited medical history is available for patients in claims data research, thereby increasing the potential for confounding, and the date of patients’ initial T2D diagnosis could not be determined with certainty.


This study has several implications. First, the study results demonstrates the existence of a skew in spending on T2D treatment. Medicare patients in the highest deciles of total spending had dramatically higher total and medical spending, clearly indicating that most spending on diabetes-related treatment is from medical—and not pharmacy—spending among a subset of high-cost patients. In addition, the study expands on available studies of patients with employer-sponsored insurance to demonstrate that improved adherence is related to reduced resource use and spending in Medicare beneficiaries with T2D and suggest that interventions aimed at improving adherence among high-cost patients have the greatest potential to reduce health expenditures. Most importantly, the study results confirm the negative connection established in the existing literature between cost sharing and medication adherence, which varied widely among Medicare beneficiaries with T2D.4-14 If pharmacy cost-sharing programs decrease medication adherence, initiatives that promote pharmacy cost sharing may unintentionally increase the risk of medical complications offsetting some (or in targeting cases, all) of the savings associated with lower pharmaceutical spending. 

Author Affiliations: Precision Health Economics (JPM, JV-O, JS, DP), Los Angeles, CA; AstraZeneca (JJS, IK), Fort Washington, PA; University of California, Los Angeles (WY), Los Angeles, CA; University of Southern California (ALP), Los Angeles, CA.

Source of Funding: This study was supported by AstraZeneca.

Author Disclosures: Dr MacEwan, Mr Sullivan, and Ms Peneva are employees of Precision Health Economics (PHE), which is a consultant for biotech/pharma companies and was compensated by AstraZeneca to perform the study. Dr Vanderpuye-Orgle was an employee of PHE during the time of the study and is currently employed by Amgen. Dr Yin is a consultant for PHE. Dr Sheehan has been employed by AstraZeneca, and Dr Kalsekar has been employed by and holds stock in AstraZeneca and Johnson & Johnson, which manufacture drugs for the treatment of diabetes. Dr Peters has been a consultant and grant recipient from numerous pharmaceutical companies including AstraZeneca, and receives editorial fees from Medscape.

Authorship Information: Concept and design (JPM, JJS, WY, JV-O, JS, IK, ALP); acquisition of data (JS, IK); analysis and interpretation of data (JPM, JJS, WY, JV-O, JS, DP, IK); drafting of the manuscript (JPM, WY, DP); critical revision of the manuscript for important intellectual content (JPM, JJS, WY, JS, ALP); statistical analysis (WY, JS); provision of patients or study materials (ALP); obtaining funding (JJS, IK); administrative, technical, or logistic support (DP, IK); and supervision (JJS, WY, JV-O, IK).

Address Correspondence to: Joanna P. MacEwan, PhD, Precision Health Economics, 11100 Santa Monica Blvd, Suite 500, Los Angeles, CA 90025. E-mail: 

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2. American Diabetes Association. Economic costs of diabetes in the US in 2012. Diabetes Care. 2013;36(4):1033-1046. doi: 10.2337/dc12-2625.

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15. Ruelas V, Roybal GM, Lu Y, Goldman D, Peters A. Clinical and behavioral correlates of achieving and maintaining glycemic targets in an underserved population with type 2 diabetes. Diabetes Care. 2009;32(1):54-56. doi: 10.2337/dc08-1234.

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18. Bron M, Guerin A, Latremouille-Viau D, et al. Distribution and drivers of costs in type 2 diabetes mellitus treated with oral hypoglycemic agents: a retrospective claims data analysis. J Med Econ. 2014;17(9):646-657. doi: 10.3111/13696998.2014.925905.

19. Meyers JL, Parasuraman S, Bell KF, Graham JP, Candrilli SD. The high-cost, type 2 diabetes mellitus patient: an analysis of managed care administrative data. Arch Public Health. 2014;72(1):6. doi: 10.1186/2049-3258-72-6.

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30. Cubanski J, Neuman T, Levinson Z. Adding an out-of-pocket spending maximum to Medicare: implementation issues and challenges. Kaiser Family Foundation website. Published February 2014. Accessed January 22, 2015.

31. Mean and median age at diagnosis of diabetes among adult incident cases aged 18-79 years, United States, 1997-2011. CDC website. Updated December 1, 2015. Accessed January 22, 2015. 
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