Unbiased Analysis of Today's Healthcare Issues

Effect of Medicare Part D on Mortality

Written By: Jason Shafrin - May• 07•17

Huh and Reif (2017) have an interesting study of the effect of Medicare Part D on mortality.  The abstract is below.

We investigate the implementation of Medicare Part D and estimate that this prescription drug benefit program reduced elderly mortality by 2.2% annually. This was driven primarily by a reduction in cardiovascular mortality, the leading cause of death for the elderly. There was no effect on deaths due to cancer, a condition whose drug treatments are covered under Medicare Part B. We validate these results by demonstrating that the changes in drug utilization following the implementation of Medicare Part D match the mortality patterns we observe. We calculate that the value of the mortality reduction is equal to $5 billion per year.

Previous studies have shown that increases in Medicare Part D spending decrease medical spending (i.e., Part A and B). The CBO estimates that a 10% increase in Medicare Part D is correlated with a 2% decrease in medical care spending.

Adding in the results from Huh and Reif, we see that Part D drugs also reduce mortality as well.

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