Using AI in Value-Based Care Pharmacy to Improve Outcomes & Health Plan ROI

Artificial intelligence (AI) has dominated conversations among health plans and providers, given its potential to transform the industry. From predictive models for disease onset to chatbots that answer member questions, the applications seem endless. Yet, not all solutions deliver meaningful results to health plans, particularly when it comes to reducing total cost of care and improving member engagement. Too often, AI is adopted without fully evaluating its practicality, value proposition, or potential return on investment (ROI). However, health plans are beginning to recognize a high-value opportunity in managed care pharmacy, where applying AI to medication management can directly advance value-based care goals.

The key question then is: how can health plans strategically leverage AI in managed care pharmacy to deliver measurable patient outcomes, strengthen quality performance—such as adherence—and reduce total cost of care?

What Is AI?

Before diving into implementation strategies it’s important to differentiate between three key AI approaches:

• Machine Learning algorithms identify patterns in large datasets—like claims or patient demographic data—to make predictions or decisions. These models can be used to identify individuals with high-risk for complications, predict hospital readmissions, and optimize resources for medication therapy management (MTM).
• Generative AI creates new content or data based on existing information. Applications include summarizing clinical notes, generating patient outreach messages, or arranging for prescription delivery.
• Adaptive AI/Reinforcement Learning continuously improves through feedback loops and real-world outcomes. These systems adapt dynamically to optimize treatment recommendations and personalize care plans based on actual patient results

While these AI approaches offer powerful capabilities, their true impact depends on how they are applied to broader care-management workflows.

How the Right AI Strategy Can Transform Care

When AI is implemented effectively in healthcare, organizations consistently observe three fundamental improvements: enhanced clinical decision-making, improved operational efficiency, and better patient outcomes

1. Enhanced Clinical Decision Making: The right AI use cases enhance—rather than replace—clinical expertise by providing data-driven insights that improve care delivery. This includes intelligent targeting where AI identifies individuals at higher risk of clinical complications and rising costs, ensuring interventions are directed where they have the greatest impact.  Additionally, AI generates personalized, evidence-based care recommendations, equipping providers with actionable insights to consider in order to make informed treatment decisions.
2. Improved Operational Efficiency: Administrative tasks continue to be a major driver of clinician burnout. AI can free up time for providers to focus on direct patient care via automation of routine tasks (e.g., appointment reminders), supporting documentation and reporting, and streamlining clinical workflows – all of which improve both provider satisfaction and care quality.
3. Better Patient Outcomes: The ultimate measure of AI's effectiveness is its impact on patient health and organizational performance metrics. It’s crucial that AI-based solutions demonstrate improved outcomes such as reduced inpatient hospitalizations, fewer hospital readmissions, and decreased emergency department visits. AI solutions for managed care pharmacy should also deliver stronger Medicare Star Ratings on key measures and support Comprehensive Medication Management (CMM) programs.

How Does Arine Use AI?

At Arine, we are constantly building and refining our technology to drive outcomes and impact. Our AI-powered medication optimization platform manages over 30 million members across Medicare, Medicaid, and commercial populations with solutions that support quality-improvement use cases for improving Medicare Star Ratings and addressing HEDIS gaps in care, in addition to applications that optimize outcomes—reducing total cost of care. Here’s what sets us apart:

• Leveraging Diverse Data Sets: We reduce bias and improve predictive accuracy by integrating a wide range of health data – 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. As a result, our 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.
• Next Best Actions: Leveraging AI, machine learning, and predictive analytics, we generate a dynamically prioritized list of high-impact interventions. Our AI goes beyond identifying opportunities to improve care—it delivers context-rich clinical insights that help providers efficiently evaluate and implement the most effective recommendations, driving better quality and cost outcomes.
• Continuous Learning: Through robust feedback loops, our models get smarter over time, adapting recommendations and interventions based on real patient outcomes, to ensure they deliver optimal impact.

AI in Action: Real-World Results from Arine

The effectiveness of Arine’s medication intelligence platform speaks for itself and has been validated through measurable outcomes across diverse patient populations. In an Oklahoma Health Care Authority (OHCA) Medicaid population, Arine achieved >$1,500 in cost savings per engaged member per year (PEMPY), >40% reduction in inpatient admissions, and >20% reduction in emergency department visits. For a behavioral health Medicaid initiative at Magellan Health, the results were likewise impactful, delivering up to $4,300 in per engaged member per year (PEMPY) savings, reducing behavioral health polypharmacy by 50%, increasing medication adherence by 20%, and decreasing average daily high-dose opioid usage by 20%.

Finally, in the realm of Star Ratings, our AI-driven platform helped achieve 5-star ratings across all triple-weighted adherence measures and improved performance with 1-2 star increases on other contracted Part C and Part D measures for VNS Medicare’s Quality program.

While the focus is often on driving Star Ratings for specific measures like adherence, SUPD, Poly-ACH, COB, and MTM program completion, there is increasing emphasis on the associated reductions in cost of care, making Arine’s single platform a powerful tool in enabling value-based care success.

The Future of AI in Healthcare

AI in healthcare has the potential to revolutionize healthcare, but its implementation must be intentional and outcomes-focused. It is crucial to recognize that AI is a tool designed to amplify the effectiveness of clinicians, not replace them.

Arine’s CEO and Co-founder, Yoona Kim, highlights this balance, stating, “AI has the power to transform healthcare by improving patient outcomes and lowering costs—but only when it’s built and used responsibly. At Arine, we ensure our models are fair, accurate, and free from bias so they can drive real, equitable impact. AI should empower clinicians, not replace them, and that’s exactly how we’ve designed our platform. The future of AI in healthcare isn’t just about automation—it’s about trust, precision, and impact.”

By integrating AI with deep clinical expertise, Arine is setting the standard for how technology can be leveraged to drive better care, lower costs, and improve member experiences. As AI continues to evolve, Arine remains committed to ensuring that its application in healthcare is not just innovative, but also ethical, effective, and impactful.

About Arine

Arine's software platform integrates AI and clinical expertise to prevent unnecessary costs and utilization caused by medication-related problems.

 Over 45 health plans, covering 30+ million members rely on Arine to ensure their members are on the right medications—improving outcomes and reducing costs with unparalleled precision and efficiency.

Learn more at arine.io.