Increasing Quality, Lowering Costs at the State Level

Providing quality health care to more people at a lower cost is one of the most talked about – and most important – topics of our day. Health care is of particular concern for state governors, who must make health care policy decisions that can have far-reaching public health and economic implications.

At the National Governors Association’s 2017 summer meeting, CVS Health President and CEO Larry Merlo spoke with more than 30 governors to share some of the approaches the company employs to deliver more affordable, accessible and effective care, and explored how these approaches could be applied within states.

“We know the difficulties you face in delivering more value to patients and taxpayers,” said Merlo, who shared three ways pharmacy management can be part of a strategy to improve care and reduce health care costs in states.

1. Lowering Prescription Drug Costs

The issue of rising drug prices affects everyone, Merlo explained, and noted the significant impact on the Medicaid program and to state budgets. He cited a recent report by The Menges Group that found greater utilization of pharmacy benefit management tools in Medicaid could save federal and state governments $51 billion over 10 years.

“Because pharmacy management and medication utilization play such important roles in reducing prescription drug costs and the total cost of care, pharmacy benefit management programs should be included in all state managed care programs,” Merlo noted.

2. Better Chronic Disease Management

Nearly half of all Americans suffer from one or more chronic conditions, accounting for 86 percent of health care spending. Merlo explained that effective care coordination for these patients, including management of their medications, could reduce spending by about $300 billion per year.  

“Pharmacy care plays a critical role in managing chronic disease in a more affordable and effective way,” Merlo said. "Think about it: most patients interact far more frequently with their pharmacist than their physician, and research published in Health Affairs has shown that one-on-one counseling between a patient and a pharmacist results in improved medication adherence and cost savings of $3 for every $1 invested.”

Merlo also noted the opportunities to significantly reduce spending by encouraging patients to choose alternatives to the emergency room for primary care. Retail health clinics like MinuteClinic cost 80 percent less than the ER, with the same or better outcomes.

3. Combating the Opioid Epidemic

According to the Centers for Disease Control and Prevention, the health and social costs related to opioid abuse total $55 billion per year,Source: CDC, Morbidity and Mortality Weekly Report, July 2015, Vol. 64; $20B for ER and inpatient care related to opioid poisonings (CDC Vital Signs, Vol. 60) Merlo pointed out, noting that there are no simple fixes for this complex problem.

Merlo shared some of the proactive work CVS Health is doing to combat the opioid epidemic, including education and awareness programs, working with states to expand access to the opioid overdose-reversal drug naloxone, and collaborating with local law enforcement to collect and safely dispose of unwanted medication.

“Pharmacies can also play an important role in helping ensure appropriate access to pain medications while assuring patient safety,” said Merlo. “Electronic, or e-prescribing, for controlled substances has proven to be effective in reducing drug diversion and fraud.”

Most recently in the company’s home state of Rhode Island, Merlo shared, CVS Health has partnered with Gov. Gina Raimondo to establish a new Opioid Center of Excellence focused on medication-assisted treatment and outpatient services.

While at the National Governors Association meeting, Merlo also had the opportunity to meet with the Office of National Drug Control Policy Acting Director Richard Baum to discuss how CVS Health is helping to achieve the shared goal of opioid abuse prevention.

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