Washington, DC (PRWEB) May 02, 2013
As policymakers seek new ways to reduce costs in the expanding Medicaid program – which is jointly financed by state and federal taxpayers – a new report estimates that upgrading management of drug benefits in the program could save $74.4 billion without cutting either benefits or enrollees. The Menges Group report shows that most state Medicaid programs make too little use of the tools Medicare, unions, and employers rely on to curb wasteful pharmacy spending.
The study, which includes a 50-state breakout, projects how much Medicaid could save by avoiding drugstore overpayments, increasing the use of generics, and promoting pharmacies that offer better rates. Currently, Medicaid consumes 11 percent of all federal spending and over 30 percent of some state budgets. With Medicaid enrollment expected to hit 84 million people in 10 years, policymakers are seeking cost-savings solutions.
“The good news is state Medicaid programs can dramatically reduce costs by simply applying best practices already used by Medicare and other large payers that offer pharmacy benefits,” said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt. “By upgrading Medicaid pharmacy management, policymakers can protect patients without cutting benefits or slashing payments to doctors, hospitals and other providers.”
According to the new research, optimizing PBM tools and strategies in state Medicaid programs nationwide could save a total of $74.4 billion across the 10-year period 2014–2023, including $43 billion in federal savings and $31.4 billion state savings. Click here to read the study.
Components of these potential savings include:
Many states have already started exploring new ways to eliminate wasteful Medicaid pharmacy spending without reducing patient access to quality care. New York Governor Andrew Cuomo’s decision to modernize the state’s Medicaid pharmacy program using proven PBM tools saved the state $425 million in 2012, according to a study from Special Needs Consulting Services. This is four times the savings originally projected by the New York State Department of Health.