The GLP-1 Insights Series, Part 1: Long-term impact on costs and outcomes for payers and providers

Few pharmaceuticals have surged in popularity as fast as GLP-1s. This growth is well-justified. GLP-1s, a class of medications originally developed for diabetes and now widely used for weight management, are rapidly reshaping clinical care with far-reaching impacts on chronic disease management, weight loss, and cardiovascular health. Despite long-term benefits, the prescribing of GLP-1s must be balanced against cost, appropriate use, adherence, and the infrastructure required to support the lifestyle changes necessary for patient success.

From a cost perspective, the impact of increased use is significant. According to the American Medical Association, from 2018 to 2023, spending on GLP-1s rose by more than 500%, from $13.7 billion to $71.7 billion. This surge has placed an enormous financial strain on the healthcare industry.

Over a series of blogs, I’ll explore the trends and challenges GLP-1s present for payers and providers, and I’ll discuss how analytics help identify and empower stakeholders to address those issues.

Key considerations for GLP-1 management

Despite the promise of a healthier population and long-term cost-saving opportunities, several considerations concerning GLP-1s remain:

• High upfront costs: GLP-1s are expensive. Broad coverage can strain health plan budgets and increase ongoing cost trends.
• Patient persistence and care infrastructure: For long-term success, patients must adhere to their treatment plans, which are most effective when coupled with therapy, lifestyle, and behavioral support.
• Patient selection is key: Not all patients benefit equally from GLP-1s. Payers and providers need to identify patients most likely to benefit from GLP-1 therapy, such as those at high risk for comorbidities.

Balancing the promise and pressure of rising GLP-1 use

For payers, an increase in GLP-1 utilization leads to a substantial rise in short-term cost pressures and the need for coordinated care management with benefit coverage design to ensure clinically appropriate use. Payers must be able to compare the total cost of care with alternative treatment options, track utilization trends, monitor adherence, and align coverage criteria with clinical evidence to ensure appropriate use.

For providers, workloads may expand due to the need for patient progress monitoring, side effect management, adherence support, and care coordination, including behavioral and lifestyle interventions. Accepting the added administrative burden to comply with payer requirements may be necessary for patients to receive coverage for treatment. Meeting these demands will require additional time, infrastructure, and streamlined workflows.

To manage demand increases responsibly, payers and providers must assess whether their strategies, care models, and data insights can support safe, effective, and financially sustainable GLP-1 use.

The long-term potential of GLP-1s

While the issues faced by payers and providers are concerning and must be addressed, long-term opportunities are equally significant. When thoughtfully prescribed and managed, GLP-1s can reshape chronic disease care and provide meaningful clinical benefits.

• Improved clinical outcomes: GLP-1–driven weight loss is associated with reductions in hypertension, kidney disease, and cardiovascular risk, creating healthier patient populations.
  • Payer benefits: Fewer high-cost claims tied to advanced chronic disease
  • Provider benefits: Better patient stability and reduced acute care needs
• Long-term cost efficiency: Although upfront costs are high, preventing downstream complications can offset the cost of ongoing treatment expenditures.
  • Payer benefits: Lower rates of hospitalizations and emergency visits
  • Provider benefits: Reduced readmissions and intensive care demands
• Alignment with value-based care: GLP-1s expand weight management options with a shift toward proactive, preventive care that improves quality metrics and care coordination.
  • Payer benefits: Stronger risk stratification and improved performance in value-based arrangements
  • Provider benefits: Enhanced ability to manage populations and meet value-based goals

GLP-1s as a strategic opportunity for payers and providers

GLP-1s require payers and providers to trade high initial costs for potential long-term savings. This approach also represents a shift from reactive care to proactive treatment aimed at modifying disease progression. However, organizations must balance the cost of GLP-1s with rising clinical and operational demands. To do so, payers and providers need to identify which patients are ideal candidates for these therapies, manage formulary use and prior authorization criteria, and continuously monitor outcomes and adherence.

Advanced analytics can support smarter GLP-1 management while strengthening overall organizational performance. I’ll discuss how analytics workflows can address GLP-1 governance in the next blog post.