Many experts have claimed that increasing Medicare beneficiary’s access to prescription drugs through Medicare Part D is cost saving. Even if it does increase cost, by increasing patient adherence to various prescription drugs, Medicare could prevent certain expensive hospitalizations and emergency room visits.
The only problem is that it doesn’t.
According to Liu et al. (2011) :
“After adjustment, Part D was associated with a U.S.$179.86 (p=.034) reduction in out-of-pocket costs and an increase of 2.05 prescriptions (p=.081) per patient year. The associations between Part D and emergency department use, hospitalizations, and preference-based health utility did not suggest cost offsets and were not statistically significant.”
In fact, increased drug coverage could increase the number of prescriptions the elderly take and lead to a higher number of harmful drug interactions, leading to increased hospitalizations.
Another paper, however, disagrees. Afendilus et al. (2011) use HCUP data and and find that for selected ambulatory care sensitive conditions:
“…our point estimates suggest that Part D reduced the overall rate of hospitalization by 20.5 per 10,000 (4.1 percent), representing approximately 42,000 admissions, about half of the reduction in admissions over our study period…The increase in drug coverage associated with Medicare Part D had positive effects on the health of elderly Americans, which reduced use of nondrug health care resources.”
The debate rages on.
- Liu, F. X., Alexander, G. C., Crawford, S. Y., Pickard, A. S., Hedeker, D. and Walton, S. M. (2011), The Impact of Medicare Part D on Out-of-Pocket Costs for Prescription Drugs, Medication Utilization, Health Resource Utilization, and Preference-Based Health Utility. Health Services Research, 46: 1104–1123. doi: 10.1111/j.1475-6773.2011.01273.x
- Afendulis, C. C., He, Y., Zaslavsky, A. M. and Chernew, M. E. (2011), The Impact of Medicare Part D on Hospitalization Rates. Health Services Research, 46: 1022–1038. doi: 10.1111/j.1475-6773.2011.01244.x