At Humana, we believe in helping our members stay as healthy as possible—and keeping their healthcare costs down as a result of improved health.
We’re working to reduce costs for our members, in a way that makes a real difference in their lives. People are seeing big benefits, particularly Humana’s Medicare Advantage members.
To accomplish this goal of helping members stay healthy and keep their costs down, Humana has been a leader in the implementation of value-based care. Physicians are reimbursed based on the quality of care and improvement in health outcomes, rather than getting reimbursed for the quantity of tests and procedures they perform. With this approach, everyone has the same positive incentives to focus on keeping members healthy, which can result in lower costs.
Under this model, Humana cut inpatient admissions by seven percent, reduced emergency room visits by six percent, and saved each member more than $800 on average in out-of-pocket costs in 2014.
Additionally, in 2016, our Medicare Advantage and Prescription Drug Plan members will save an average of nearly $500 per person in prescription drug premiums through our pharmacy benefit management efforts.
Aside from the improved health outcomes and reduced costs that Humana members appreciate, Medicare Advantage programs like Humana’s routinely drive innovation and reduce cost across the entire healthcare marketplace, including in traditional Medicare.
Harvard researchers found in areas with high Medicare Advantage enrollment, the program had the spillover effect of making traditional Medicare more efficient. Medicare Advantage providers must find ways to be innovative and efficient to compete with traditional Medicare, and those improved practices are utilized across all patients—whether they’re Medicare Advantage members or not. In those areas with high Medicare Advantage enrollment, traditional Medicare costs decrease two percent for every five percent increase in Medicare Advantage enrollment.
We’re constantly working to be leaders in value-based care. In doing so, we’re helping people live more healthy days, providing high quality care, and keeping costs down—so members can focus on living their best lives.
Keeping costs down lets our members focus on what really matters: a happy and healthy life. Here are examples of what we do to help members of our Prescription Drug Plans save money:
• We check that the drugs we cover are prescribed and used according to clinical guidelines. We help people choose less expensive but clinically equivalent drugs including generics or over the counter. We choose drugs for our formularies that are effective and provide value to consumers.
• We monitor new drugs entering the market and forecast when drug patents will expire and generic drugs, which are often cheaper, will enter the market.
• We negotiate drug prices with drug manufacturers and work with them to get better clinical outcomes.
• We help members take their drugs as prescribed and not miss doses, and warn members of possible harmful drug effects such as drug to drug interactions, high risk drugs, or duplicate therapies.
• We use clinical research and analyze data to compare drugs and clinical outcomes to help us place the most clinically and cost effective drugs on our formularies. We also try to predict and detect possible risks or overutilization of certain drugs.