Increases in Pharmaceutical Spending Associated with Reductions in Overall Healthcare Costs in a Telephone-Based Chronic Disease Management Program

BACKGROUND Chronic disease is a significant contributor to health care expenditures, and as a result identifying cost-effective ways to reduce the economic and clinical burden of these conditions is an important issue. METHODS Based on intent to treat, claims data is used to create risk-adjusted fixed effects regression models to compare health care expenditures between health plan members in groups participating in the HealthCare Navigator chronic disease management and those not participating. Relationships between pharmacy spending and other classes of healthcare costs were modelled using fixed effects two stage models. RESULTS The program produced significant decreases in overall healthcare expenditures ($3747/year compared to similar non-participating members after risk adjustment) are associated with the program. While the program is associated with increased pharmaceutical spending ($3033/year), this increase is offset by reductions averaging $6780 per year in other categories of medical expenditures, notably in ancillary outpatient costs. Two stage models show significant relationship between pharmaceutical spending and reductions in other categories of medical expenses, with contributions from both rates of guideline recommended formal medical care and other aspects of coaching provided by the program. Each dollar of pharmacy spending was associated with a reduction of $2.12 in non-pharmacy spending. CONCLUSION These results are consistent with other work indicating compliance with pharmaceutical therapy is related to lower cost and improved outcomes for patients with chronic diseases, indicates that compliance with drug treatment regimens is a target for interventions to manage chronic conditions, and that coaching patients in self-management is an effective complement to formal clinical care.