Improving Adherence Policies Could Save $4B in Diabetes Care

When he won the Nobel Prize in October, Dr. Richard Thaler proved that small idea can sometimes solve big problems. Thaler won for his research proving that small behavioral inducements (called “nudges”) can reap enormous benefits.

There’s one particularly troubling area where the United States could use one of Dr. Thaler’s nudges: getting diabetes patients to follow doctor’s orders. Improving diabetes patients’ adherence to treatment plans could save taxpayers $4 billion per year in Medicaid spending, according to one estimate – to say nothing of their improved quality of life.

If obesity is the fire burning down the house of American health care right now, diabetes is the garage full of oil-soaked rags. The impact of diabetes on our health care economy is staggering: the $174 billion cost in 2007 rose to $245 billion by 2012 (a 41-percent increase), according to research from IHS Health Care and the American Diabetes Association – and no sign that number will drop any time soon. They estimate that nearly 26 million Americans have the disease and another 79 million have prediabetes, on their way to developing type 2 diabetes.

Non-adherence carries a slew of negative effects for patients and society. Every year $105 billion in avoidable health care costs are attributed to medication non-adherence. Non-adherent patients are 17 percent more likely to be hospitalized. It causes 30 to 50 percent of treatment failures every year on top of 125,000 deaths.

With regards to diabetes specifically, the US per-capita non-adherence cost of diabetes ranges from $4,000 to $6,100, according to a recent study published by The American Journal of Pharmacy Benefits, which estimated the total cost of non-adherence to medications used for diabetes (along with hypertension and dyslipidemia) to be almost $106 billion.

No provider prescribes a treatment expecting that patients will fall through. Treating diabetes has always been difficult because of the regimen of insulin injections and dietary changes. Pharmaceutical companies have invented better drug-delivery methods to increase overall adherence (reducing the dose frequency, re-usable delivery systems, etc.) but there is still considerable room to engage patients more effectively.

All we need are a few nudges.

Thaler has prescribed a variety of small changes to American health care that could save time, money, and lives – such as employing mid-level professionals like PAs and nurse practitioners more so doctors can spend more time with more serious patients. Doctors should use a fee for health rather than fee for service model. Needless CT scans should be avoided, because they’re not only expensive but they can lead to other needless, expensive procedures.

A similar nudge was recently used in the British health care system to reduce the over-prescription of antibiotics (which can lead to drug-resistant bugs which could lead to massive future health problems). England’s Chief Medical Officer sent a letter to 800 random practices chiding them for prescribing antibiotics more than “the great majority (80%)” of other practices in their area, plus some tips to make sure future prescriptions are appropriate.

As the behavioral scientists behind the study told the Freakonomics podcast, the doctors who got the letter prescribed 73,000 fewer antibiotic items than those who didn’t.

(Who says a little white lie doesn’t help?)

London-based information services firm IHS Markit has recently produced a computer model that provides state-by-state estimates of cost savings through improved adherence of diabetes patients – with a total price tag of $4 billion annually – plus the incalculable human savings of preventing diabetes-related health problems (including death).

Public expenditure on health care has long been the 800-pound gorilla in the federal budget room. Last year, the government spent $1.1 trillion on health care – about one-quarter of federal spending. There is no single magic bullet to stop this gorilla, but there may be a lot of little ones that can nudge him to behave better. Even tiny improvements in adherence could yield huge cost savings long term.

With the advent of health care-related gamification, simple smartphone solutions can help nudge diabetes patients in the right direction. Patient adherence is the win-win-win solution to all the stakeholders in the health care system – improved outcomes for patients, increased access to medicines for pharmaceuticals and reduced health care costs through systemic savings.

The decision-makers in health care policy are often focus on big picture items like new technology, new treatments, and massive spending packages. It’s more satisfying to say, “We created this big thing” rather than, “We need you to do this small thing.” Small ideas can lead to big solutions.

Jared Whitley is an award-winning writer and political operative with experience in the Senate, the White House, and the defense industry. He recently completed his MBA in Dubai.

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