The Untapped Opportunity in Healthcare: Optimizing Medications

A version of this article was originally published in Becker’s Payer Issues on March 3, 2025.

For health plans, the numbers are sobering: rising medical loss ratios, escalating healthcare costs, and increasingly complex patient needs are straining resources across the industry. Yet within this challenging landscape lies an overlooked opportunity for transformation: medication optimization.

Non-optimized medications cost the U.S. healthcare system a staggering $528 billion each year (or put a different way, one in six healthcare dollars), which is more than the annual direct costs associated with chronic conditions such as diabetes ($307 billion) and heart disease ($393 billion). Furthermore, as a nation we spend just as much money on medications as we do fixing the problems caused by medication mismanagement. It’s also important to remember that behind these numbers are real patients experiencing preventable hospitalizations, adverse events, and poorer health outcomes that impact their daily lives.

Addressing these medication-related errors is crucial for bending the cost curve and improving care outcomes but requires a strategic approach to comprehensive medication management, powered by data and technology. Enter medication intelligence: the integration of artificial intelligence (AI) and clinical intelligence to bridge these gaps and deliver actionable insights to reduce costs and improve outcomes.

The Problem: Escalating Costs from Fragmented Care

Managing medications effectively requires coordination across multiple providers, pharmacies, and care settings – a challenge that grows more complex by the day. Half of Americans take at least one prescription medication, and almost a quarter take three or more – each potentially prescribed by different providers working in isolation. For Americans over 65, who now make up one in six of the population, the complexity is even greater. Nearly 44% of this group take five or more medications, a figure that has almost doubled in the past 20 years.

The more medications a patient takes, the greater the risk of adverse events and information getting lost across multiple providers and healthcare touchpoints. When this happens, traditional approaches to comprehensive medication management, which rely on manual reviews and siloed data systems, cannot keep pace.

Furthermore, each key stakeholder is missing key information or insights that they aren’t receiving from the healthcare system today.

• Members, for example, often struggle to understand their medications and are not able to manage their conditions effectively, making personalized education and ongoing support essential to reducing preventable complications.
• Providers need timely data on member behaviors, such as medication adherence, constant up-to-date guidance on medication interactions, and a complete picture of a patient’s medication history. 
• Health plans lack visibility into which interventions will drive meaningful improvements in outcomes and cost savings, making it difficult to allocate resources effectively and optimize care strategies across the population.

The Solution: Medication Intelligence

For health plans seeking to address these challenges, medication intelligence delivers concrete results as part of a comprehensive medication management framework. Arine, a leader in AI-driven medication intelligence, has achieved >10% in total cost savings and >40% reduction in hospitalizations for our clients by combining advanced analytics, clinical expertise, and patient-centered care.

By synthesizing data from diverse sources – including clinical records, pharmacy data, clinical guidelines and medication data (up-to-date knowledge of drug interactions and treatment standards), and social determinants of health – Arine's platform uncovers patterns that humans alone might miss, such as subtle drug interactions or aspects of a patient’s life circumstances that may be hidden blockers in their medication regimen. This comprehensive analysis enables health plans to identify and address medication-related risks before they result in costly complications.

The impact of this approach is best illustrated through real patient outcomes. Consider Patient E, a man with heart failure, diabetes, and COPD who was unknowingly taking duplicate doses of six heart failure medications prescribed by different providers. Arine’s models immediately found this member to be of urgent need given these duplications, which placed him at severe risk for renal failure or cardiac arrest. Using the Arine Platform, the care team was alerted to these risks and worked to optimize the patient’s medications. As a result, his heart failure was better managed with fewer medications at a lower cost, significantly improving his quality of life.

Conclusion

In an era where healthcare costs continue to rise, medication intelligence represents a critical opportunity for health plans to further drive value-based care. By transforming comprehensive medication management from an afterthought into a central focus of patient care, health plans can better coordinate care across providers, allocate resources more effectively, and ultimately deliver better outcomes at lower costs. The message is clear: optimizing medications isn’t just a small fix—it’s one of the biggest levers we have to deliver true value-based care.