Study: Medicare Part D increases office care

August 25, 2011

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 suggests.

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 suggests.

The study in the Journal of the American Medical Association finds 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 to 2007.

The study found that Part D increased the use of prescription medications and lowered beneficiaries' out-of-pocket costs, while beneficiaries adhered more closely to their prescription regimens. Researchers also noted that nondrug medical spending before Part D became law was slightly higher for those with limited drug coverage than it was for those with better coverage, but it 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," write the authors, who are affiliated with 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 pharmaceutical industry is applauding the findings. "Part D is an unparalleled success and a true model for effective healthcare," says John J. Castellani, president and chief executive officer 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."

Mark Merritt, president and chief executive officer of the Pharmaceutical Care Management Association, calls the study a potential "game-changer."

"Many illnesses, hospitalizations, and emergency room visits occur because seniors with subpar benefits didn't have access to the medications they needed, Merritt says. "The Part D example shows that more competition and greater use of pharmacy benefit management tools like home delivery of chronic refills can help address this issue."