Medicare Part D means more care in your office, fewer admissions

August 3, 2011

More affordable medications, courtesy of Medicare Part D, mean that more elderly adults now receive care in your office instead of in more costly hospitals and nursing homes, a new study suggested. See what effect that has had on care as well as cost.

More affordable medications, courtesy of Medicare Part D, mean that many more elderly adults are receiving care in your office instead of in more costly hospitals and nursing homes, a new study suggested.

The study, published recently in the Journal of the American Medical Association, concludes that implementing Part D in January 2006 reduced nondrug medical spending by Medicare beneficiaries who had limited prior drug coverage.

To compare nondrug medical spending for traditional Medicare beneficiaries before and after the implementation of Part D, researchers used nationally representative survey data and linked Medicare claims from 2004-2007. Participants, who self-reported prescription coverage before 2006, included 6,001 elderly Medicare beneficiaries from the Health and Retirement Study-2,538 with generous and 3,463 with limited drug coverage before 2006.

The study found that Part D increased the use of prescription medications and lowered beneficiaries’ out-of-pocket costs while they adhered more closely to their prescription regimens. Researchers also notedthat nondrug medical spending before Part D became law was a bit higher for those with limited drug coverage than it was for those with better coverage but dropped 3.9% after implementation.

“In concert with previous studies, these findings suggest that increased medication use and adherence achieved through expanded drug coverage for seniors have been associated with decreased spending for nondrug medical care," wrote the authors from Harvard Medical School and Brigham and Women's Hospital in Boston, Massachusetts.

"The economic and clinical benefits suggested by these reductions may be enhanced by further expansions in prescription drug coverage for seniors, improvements in benefit designs for drug-sensitive conditions, and policies that integrate Medicare payment and delivery systems across drug and nondrug services," the authors add.

The findings were applauded by the pharmaceutical industry. “Part D is an unparalleled success and a true model for effective healthcare,” said John J. Castellani, president and chief executive officer (CEO) of the Pharmaceutical Research and Manufacturers of America. “This is a program that improves the health of Americans and lowers costs for both patients and the federal government.”

Pharmaceutical Care Management Association president and CEO Mark Merritt called the study a potential “game-changer,” adding, “Many illnesses, hospitalizations, and emergency room visits occur because seniors with sub-par benefits didn't have access to the medications they needed. The Part D example shows that more competition and greater use of PBM [pharmacy benefit management] tools like home delivery of chronic refills can help address this issue.”

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