Insurance coverage for prescription drugs: effects on use and expenditures in the Medicare population

Pursuing Pharmacoequity: Determinants, Drivers, and Pathways to Progress

The United States pays more for medical care than any other nation in the world, including for prescription drugs. These costs are inequitably distributed, as individuals from underrepresented racial and ethnic groups in the United States experience the highest costs of care and unequal access to high-quality, evidence-based medication therapy. Pharmacoequity refers to equity in access to pharmacotherapies or ensuring that all patients, regardless of race and ethnicity, socioeconomic status, or availability of resources, have access to the highest quality of pharmacotherapy required to manage their health conditions. Herein the authors describe the urgent need to prioritize pharmacoequity. This goal will require a bold and innovative examination of social policy, research infrastructure, patient and prescriber characteristics, as well as health policy determinants of inequitable medication access. In this article, the authors describe these determinants, identify drivers of ongoing inequities in prescription drug access, and provide a framework for the path toward achieving pharmacoequity.

Financial Burden of Prescribed Medicines Included in Outpatient Benefits Package Schemes: Comparative Analysis of Co-Payments for Reimbursable Medicines in European Countries

OBJECTIVE

The study aimed to analyse the financial burden that co-payments for prescribed and reimbursed medicines pose on patients in European countries.

METHODS

Five medicines used in acute conditions (antibiotic, analgesic) and in chronic care (hypertension, asthma, diabetes) were selected. Co-payments (standard and five defined population groups, e.g. low-income people, patients with high consumption) were surveyed based on information retrieved from national price lists (September 2017) and co-payment regulation in nine countries (Albania, Austria, England, France, Germany, Greece, Hungary, Kyrgyzstan and Sweden). The financial burden of the selected medicines (originator and lowest-priced generic) was described as the percentage of patients' payments for 1 month's therapy or treatment of one episode in comparison to the national minimum monthly wage.

RESULTS

The study showed large variation in co-payments between the countries. Financial burden resulting from co-payments for reimbursed medicines tended to be higher in lower-income countries (Kyrgyzstan: 9% of minimum monthly wage for generic amlodipine; 2-4% for generic and originator salbutamol; Albania: approximately 3% for originator amoxicillin/clavulanic acid and metformin). Most studied countries applied reduction or exemption mechanisms (children were exempt in five countries, no or lower co-payments for low-income people in five countries, exemptions from co-payments upon reaching a threshold of expenses in six countries).

CONCLUSIONS

Co-payments for prescribed medicines can pose a substantial financial burden for outpatients, particularly in lower-income countries. The price of a medicine, availability of lower-priced medicines and the design of co-payments, including exemptions and reductions for specific groups, can considerably impact patients' expenses for medicines.

Variations in non-prescription drug consumption and expenditure: Determinants and policy implications

This paper analyses the determinants of cross-regional variations in expenditure and consumption for non-prescription drugs using the Italian Health Care Service as a case study. This research question has never been posed in other literature contributions. Per capita income, the incidence of elderly people, the presence of distribution points alternative to community pharmacies (para-pharmacies and drug corners in supermarkets), and the disease prevalence were included as possible explanatory variables. A trade-off between consumption of non-prescription and prescription-only drugs was also investigated. Correlation was tested through linear regression models with regional fixed-effects. Demand-driven variables, including the prevalence of the target diseases and income, were found to be more influential than supply-side variables, such as the presence of alternative distribution points. Hence, the consumption of non-prescription drugs appears to respond to needs and is not induced by the supply. The expected trade-off between consumption for prescription-only and non-prescription drugs was not empirically found: increasing the use of non-prescription drugs did not automatically imply savings on prescription-only drugs covered by third payers. Despite some caveats (the short period of time covered by the longitudinal data and some missing monthly data), the regression model revealed a high explanatory power of the variability and a strong predictive ability of future values.

Predicted patient demand for a new delivery system for glaucoma medicine

Sustained-release drug delivery systems that replace the need for daily glaucoma medications will improve outcomes for those who are nonadherent and reduce the inconvenience of having to take medications on a recurring basis.The objective is to estimate uptake (i.e., demand) for a new technology that delivers sustained-release glaucoma medication and to investigate how uptake varies by product attributes, physician recommendations, peer adoption (i.e., percentage of patients seen in a clinic using the new technology), and patient characteristics.In a web-enabled discrete-choice experiment survey, glaucoma patients in the United States were asked to choose between continuing eye drop use or purchasing the new delivery system. In a cross-sectional web-enabled survey, ophthalmologists were asked their likelihood of recommending the new technology based on product and patient characteristics.Study participants were 500 glaucoma patients who were on topical administration of daily eye drops and 155 ophthalmologists who practice in the US.Main outcomes were predicted uptake for patients and likelihood of recommending a new drug delivery system for ophthalmologists. Logistic models were used to analyze the choice data.Uptake was estimated to be 18% at an annual cost of $1000 and to be 24% when the cost was $500. A physician's recommendation increased uptake by 6% to 12%, whereas an increase in peer adoption from 5% to 50% increased uptake by 3% to 7%. Patients aged ≥ 65 and those with lower income were more likely to remain on eye drops. Physicians were more likely to recommend a product if the interval between administrations is 6 months or longer and when long-term safety and efficacy data are available. They were less likely to recommend it to patients with lower income and no adherence problems.Results suggest a significant interest in an injectable solution or other sustained-release alternatives to daily eye drops. However, in this survey, patient uptake was greatly influenced by out-of-pocket cost and the interval between treatment administrations. Few physicians were willing to recommend sustained-release technology if the treatment interval was less than 3 months.

The effects of payments for pharmaceuticals: a systematic literature review

The existence of different forms of out-of-pocket payments (OOPs) for pharmaceuticals across the globe provokes the question whether they can achieve more negative or positive consequences. A systematic literature review was conducted to assess the association between drug cost sharing and health care services utilization, health care costs as well as health outcomes. Studies published in The Cochrane Library, PubMed, Embase were searched with such keywords as: drug, pharmaceutical, cost sharing, out of pocket, co-payments paired with the following: impact, health outcomes, health care costs and utilization. The final review included 18 articles. A total of 11 publications reported the association between drug cost sharing and health care utilization patterns, of which nine found a statistically significant direct relationship. In all 10 publications concerned the association between drug copayments and health care costs. Majority were limited to the impact on the drug budget. Seven studies looked into the link between drug cost sharing and health outcomes, of which five reported statistically significant inverse relationship. There is some evidence for the association between drug copayments, health outcomes and health care services consumption. The optimal system of OOPs’ payments for pharmaceuticals needs to prevent drugs’ overconsumption and mitigate the risks of excessive cost sharing’s burden.

Gender Differences in Out-of-Pocket Prescription Drug Expenditures Among the Elderly

Many elderly in the United States face high out-of-pocket prescription drug (OOP-PD) expenditures, with elderly women being disproportionably affected. Using Medicare Current Beneficiary Survey data for 1992 to 2000, the authors examined the gender differences in OOP-PD expenditures and burden among community-dwelling elderly Medicare beneficiaries. Oaxaca-Blinder decomposition techniques were used to evaluate the contribution of observed demographic, socioeconomic, and utilization factors on the gender gap in OOP-PD expenditures and burden. Among observed characteristics, differences in utilization and supplemental insurance coverage were the major drivers of the gender gap in OOP-PD expenditures and burden. Unobservable factors contributed to the majority of the gender gap in OOP-PD expenditures.

Adverse and Advantageous Selection in the Medicare Supplemental Market: A Bayesian Analysis of Prescription drug Expenditure

This paper develops an extended specification of the two-part model, which controls for unobservable self-selection and heterogeneity of health insurance, and analyzes the impact of Medicare supplemental plans on the prescription drug expenditure of the elderly, using a linked data set based on the Medicare Current Beneficiary Survey data for 2003-2004. The econometric analysis is conducted using a Bayesian econometric framework. We estimate the treatment effects for different counterfactuals and find significant evidence of endogeneity in plan choice and the presence of both adverse and advantageous selections in the supplemental insurance market. The average incentive effect is estimated to be $757 (2004 value) or 41% increase per person per year for the elderly enrolled in supplemental plans with drug coverage against the Medicare fee-for-service counterfactual and is $350 or 21% against the supplemental plans without drug coverage counterfactual. The incentive effect varies by different sources of drug coverage: highest for employer-sponsored insurance plans, followed by Medigap and managed medicare plans.

Access to oral osteoporosis drugs among female Medicare Part D beneficiaries

BACKGROUND

For women living with osteoporosis, high out-of-pocket (OOP) drug costs may prevent drug therapy initiation. We investigate the association between oral osteoporosis OOP medication costs and female Medicare beneficiaries' initiation of osteoporosis drug therapy.

METHODS

We used 2007 and 2008 administrative claims and enrollment data for a 5% random sample of Medicare beneficiaries. Our study sample included age-qualified, female beneficiaries who had no prior history of osteoporosis but were diagnosed with osteoporosis in 2007 or 2008. Additionally, we only included beneficiaries continuously enrolled in stand-alone prescription drug plans. We excluded beneficiaries who had a chronic condition that was contraindicated with osteoporosis drug utilization. Our final sample included 25,069 beneficiaries. Logistic regression analysis was used to examine the association between the OOP costs and initiation of oral osteoporosis drug therapy during the year of diagnosis.

FINDINGS

Twenty-six percent of female Medicare beneficiaries newly diagnosed with osteoporosis initiated oral osteoporosis drug therapy. Beneficiaries' OOP costs were not associated with the initiation of drug therapy for osteoporosis. However, there were significant racial disparities in beneficiaries' initiation of drug therapy. African Americans were 3 percentage points less likely to initiate drug therapy than Whites. In contrast, Asian/Pacific Islander and Hispanic beneficiaries were 8 and 18 percentage points, respectively, more likely to initiate drug therapy than Whites. Additionally, institutionalized beneficiaries were 11 percentage points less likely to initiate drug therapy than other beneficiaries.

CONCLUSIONS

Access barriers for drug therapy initiation may be driven by factors other than patients' OOP costs. These results suggest that improved osteoporosis treatment requires a more comprehensive approach that goes beyond payment policies.

Non-adherence to anti-osteoporotic medications in Taiwan: physician specialty makes a difference

Adherence to anti-osteoporotic regimens gradually decreases over time. We hypothesized that the determinants of non-compliance or non-persistence at different times vary and identified these differences. We used an outpatient database to retrieve information on anti-osteoporotic medications prescribed by a medical centre in southern Taiwan during 2001-2007. Compliance was defined as a medication possession ratio (MPR) ≥80 %. Persistence was determined as continuous use, allowing for a refill gap of 30 days. A multivariate Cox regression model evaluated potential predictors of non-adherence. A total of 3589 patients were included. In the multivariate analyses, non-compliance for both year 1 and year 2 was more likely in patients with non-vertebral non-hip fractures, respiratory disorders, prescription of the first anti-osteoporotic regimen by an orthopedist; and less likely in patients with follow-up bone densitometry and switched regimens. Risks for non-persistence at year 1 and year 2 were generally similar to those for non-compliance; insurance coverage and malignancy were associated with a lower risk of non-persistence at year 1 and year 2, respectively. In the subgroup with an MPR ≥80 % at year 1, an index prescription by an orthopedist was the only independent predictor of non-compliance and non-persistence at year 2. In conclusion, the positive or negative determinants of non-adherence were different at year 1 and year 2, which indicated that clinicians might deliver effective interventions to improve adherence via different precautions annually. This study also provided evidence that physician specialty had a significant effect on adherence to osteoporosis care.

Voluntary private health insurance among the over 50s in Europe

Using data from Survey of Health, Ageing and Retirement in Europe (SHARE), we investigate the determinants of voluntary private health insurance (VPHI) among the over 50s in 11 European countries and their effects on healthcare spending. First, we find that the main determinants of VPHI are different in each country, reflecting differences in the underlying healthcare systems, but in most countries, education levels and cognitive abilities have a strong positive effect on holding a VPHI policy. We also analyse the effect of holding a voluntary additional health insurance policy on out-of-pocket (OOP) healthcare spending. We adopt a simultaneous equations approach to control for self-selection into VPHI policy holding and find that, only in the Netherlands, VPHI policyholders have lower OOP spending than the rest of the population, whereas in some countries (Italy, Spain, Denmark and Austria), they spend significantly more. This could be due to not only increased utilisation but also cost-sharing measures adopted by the insurers to counter the effects of moral hazard and to keep adverse selection under control.

Impact of Part D low-income subsidies on medication patterns for Medicare beneficiaries with diabetes

BACKGROUND

It is not known whether low-income subsidies (LIS) under Medicare Part D help beneficiaries overcome impediments to medication use associated with poor socioeconomic status and high disease burden.

OBJECTIVES

To compare Medicare beneficiaries with LIS and Medicaid (duals), LIS without dual eligibility, and non-LIS recipients on use of medications recommended in diabetes treatment.

RESEARCH DESIGN

Fixed-effect comparisons among beneficiaries in the same Part D plans in 2006-2007.

SUBJECTS

Nationally representative sample of enrollees in Part D prescription drug plans. A total of 109,292 beneficiaries were in 204 prescription drug plans; 47.5% non-LIS, 44.4% duals, and 8.1% nondual LIS recipients.

MEASURES

Medications included antidiabetic agents, renin-angiotensin-aldosterone system inhibitors, and antihyperlipidemics. Drug use was measured by exposure, duration of therapy, and medication possession ratio.

RESULTS

The LIS dual cohort had significantly higher comorbidity compared with non-LIS comparisons, LIS nonduals were significantly more likely to take medications in all 3 drug classes compared with non-LIS recipients, but differences were small (between 2% and 4%; P<0.05). Non-LIS recipients and duals had equivalent exposure to any antidiabetic drug and antihyperlipidemics, but duals were 3% less likely to receive renin-angiotensin-aldosterone system inhibitors compared with non-LIS recipients (P<0.05). Small differences in adjusted values for duration of therapy and medication possession ratio among the 3 cohorts were also observed, none of which were clinically meaningful.

CONCLUSIONS

Similarities in medication utilization among Part D enrollees with and without LIS coverage supports the program objective of providing enhanced access to needed medications for diverse groups of Medicare beneficiaries.

Association of Medicare Part D medication out-of-pocket costs with utilization of statin medications

OBJECTIVES

To examine the association between statin out-of-pocket (OOP) costs and utilization among the Medicare Part D population.

DATA SOURCES/STUDY SETTING

2006-2008 administrative claims and enrollment data for the 5 percent Medicare sample.

STUDY DESIGN

Sample included 346,583 beneficiary-year observations of statin users enrolled in stand-alone prescription drug plans, excluding low-income subsidy recipients. We estimated the association between a plan's OOP statin costs and statin utilization using an instrumental variable approach to account for potential bias due to plan selection. Adherence was defined as percentage of days covered (PDC) of at least 80 percent. Plan OOP costs were constructed for a representative market basket of statin medications. Analyses controlled for demographic characteristics, cardiovascular disease risk, co-morbidity presence, and regional characteristics.

PRINCIPAL FINDINGS

About 67 percent of the sample had a PDC of at least 80 percent. An increase in annual statin OOP from $200 (50th percentile) to $240 (75th percentile) was associated with a reduction in the rate of adherent beneficiaries from 67 percent to 56 percent (p < .001).

CONCLUSIONS

Greater OOP costs for statins are associated with reductions in statin utilization.

Prescribing of potentially inappropriate medications among the elderly population in an ambulatory care setting in a Saudi military hospital: trend and cost

AIM

To explore the prevalence of potentially inappropriate medication (PIM) use in the elderly, to identify the trends and the patterns of prescribing such medication, and to calculate the associated direct medication cost of such practice in a Saudi hospital.

METHODS

This was a retrospective cross-sectional study of patients who were aged 65 years or older on at least one PIM. The source of our data was outpatient pharmacy prescription records at Riyadh Military Hospital (RMH) for 2002, 2003 and 2004. Beers' explicit criteria for PIM was used to identify these medications.

RESULTS

A total of 20521 PIM were identified. The prevalence of PIM for 2002, 2003 and 2004 was 2.5%, 2.3% and 2.1%, respectively. A total of 43.6% of the patients had filled a prescription of one PIM, 18% filled two PIM and 38.4% filled three or more PIM. Digoxin accounted for 23.7% of these PIM. The most commonly prescribed medications were cardiovascular medications at 26.7%. The total direct cost that was associated with inappropriate prescribing was 518314 Saudi Riyals (US$138217) during the study period.

CONCLUSION

PIM prescribing in RMH was less compared with what was published in the literature in other countries. It was unclear whether these results reflect the level of elderly healthcare services provided to RMH patients or because of underreporting. Drug utilization review programs, medical education, recruiting physicians and clinical pharmacists who are specialized in geriatrics, finding safer medications or integration of computer software to detect such medications during prescriptions entry can improve the medical services provided to the elderly.

An explanatory model for state Medicaid per capita prescription drug expenditures

Rising prescription drug expenditure is a growing concern for publicly funded drug benefit programs like Medicaid. To be able to contain drug expenditures in Medicaid, it is important that cause(s) for such increases are identified. This study attempts to establish an explanatory model for Medicaid prescription drugs expenditure based on the impacts of key influencers/predictors identified using a comprehensive framework of drug utilization. A modified Andersen's behavior model of health services utilization is employed to identify potential determinants of pharmaceutical expenditures in state Medicaid programs. Level of federal matching funds, access to primary care, severity of diseases, unemployment, and education levels were found to be key influencers of Medicaid prescription drug expenditure. Increases in all, except education levels, were found to result in increases in drug expenditures. Findings from this study could better inform intervention policies and cost-containment strategies for state Medicaid drug benefit programs.

Disentangling incentives effects of insurance coverage from adverse selection in the case of drug expenditure: a finite mixture approach

This paper takes a finite mixture approach to model heterogeneity in incentive and selection effects of drug coverage on total drug expenditure among the Medicare elderly US population. Evidence is found that the positive drug expenditures of the elderly population can be decomposed into two groups different in the identified selection effects and interpreted as relatively healthy with lower average expenditures and relatively unhealthy with higher average expenditures, accounting for approximately 25 and 75% of the population, respectively. Adverse selection into drug insurance appears to be strong for the higher expenditure component and weak for the lower expenditure group.

Prescription drug coverage among elderly and disabled Americans: can Medicare-Part D reduce inequities in access?

This paper explores the determinants of demand for prescription drug coverage among the elderly population in the United States, using data from the Medical Expenditure Panel Survey (MEPS) and seeks to analyse the impact that the Medicare prescription drug coverage bill (Medicare-Part D) has on Medicare beneficiaries. The results indicate that individuals who are Hispanic, black, or of another race or ethnicity, over the age of 74, not married, in poor health, fall into the low- to middle-income brackets, and have less than a high school degree are more likely to be covered through a public program, more likely to be uninsured for prescription medicine outlays, and less likely to have private prescription drug coverage. The paper concludes that there is cause for considerable concern for low income citizens who have significant prescription drug outlays, and, therefore, the greatest need because their prescription drug costs may not be covered beyond a certain limit unless they reach catastrophic proportions. This continues to raise equity in access concerns among elderly patients.

Hospitalizations and deaths among adults with cardiovascular disease who underuse medications because of cost: a longitudinal analysis

CONTEXT

It is well-documented that the financial burden of out-of-pocket expenditures for prescription drugs often leads people with medication-sensitive chronic illnesses to restrict their use of these medications. Less is known about the extent to which such cost-related medication underuse is associated with increases in subsequent hospitalizations and deaths.

OBJECTIVE

We compared the risk of hospitalizations among 5401 and of death among 6135 middle-aged and elderly adults with one or more cardiovascular diseases (diabetes, coronary artery disease, heart failure, and history of stroke) according to whether participants did or did not report restricting prescription medications because of cost.

DESIGN AND SETTING

A retrospective biannual cohort study across 4 cross-sectional waves of the Health and Retirement Study, a nationally representative survey of adults older than age 50. Using multivariate logistic regression to adjust for baseline differences in sociodemographic and health characteristics, we assessed subsequent hospitalizations and deaths between 1998 and 2006 for respondents who reported that they had or had not taken less medicine than prescribed because of cost.

RESULTS

Respondents with cardiovascular disease who reported underusing medications due to cost were significantly more likely to be hospitalized in the next 2 years, even after adjusting for other patient characteristics (adjusted predicted probability of 47% compared with 38%, P < 0.001). The more survey waves respondents reported cost-related medication underuse during 1998 to 2004, the higher the probability of being hospitalized in 2006 (adjusted predicted probability of 54% among respondents reporting cost-related medication underuse in all 4 survey waves compared with 42% among respondents reporting no underuse, P < 0.001). There was no independent association of cost-related medication underuse with death.

CONCLUSIONS

In this nationally representative cohort, middle-aged and elderly adults with cardiovascular disease who reported cutting back on medication use because of cost were more likely to report being hospitalized over a subsequent 2-year period after they had reported medication underuse. The more extensively respondents reported cost-related underuse over time, the higher their adjusted predicted probability of subsequent hospitalization.

Effect of prescription drug coverage on the elderly's use of prescription drugs

This paper evaluates the effect of prescription drug insurance coverage on prescription drug use among the elderly. Estimates were obtained using multivariate regression and a fixed-effects (within-person) research design that controls for unmeasured person-specific effects that may confound the relationships of interest. Estimates showed prescription drug coverage was associated with a 4% to 10% increase in the utilization of prescription drugs, depending on the type and generosity of the coverage.

Incorporating adherence into health economic modelling of osteoporosis

Osteoporosis medications are seldom taken according to the recommendations of health-care providers. A theoretical model was constructed to investigate the variables of drug adherence that affect the cost-effectiveness of drugs, using osteoporosis treatment as a model. Important variables were the magnitude of drug effect, drug price, and fracture-related costs.

INTRODUCTION

Adherence to anti-fracture medication is far from optimal and poses a challenge in osteoporosis management. The objectives of this study were to develop a model that could address adherence and identify the important drivers of cost-effectiveness.

METHODS

An individual state transition model was constructed to compare two theoretical medications, one of which conferred optimal adherence and was 50% more costly. Adherence was divided into persistence and compliance. Partial compliance was assumed to be associated with a 20% loss of anti-fracture effect. Non-persistent patients had an offset time as long as their time on medication, to a maximum of 5 years.

RESULTS

The potentially important drivers of cost-effectiveness include reduced drug effectiveness due to poor compliance, offset time, fracture risk, anti-fracture drug effect, and drug price. Optimal adherence was associated with fewer osteoporotic fractures, and the impact was more evident among those with prior fractures. However, the health benefits of adherence were often partially offset by increased intervention costs associated with the improved drug-taking behaviour.

CONCLUSIONS

High adherence is likely to be associated with added value for health-care systems, but should be used with care as a central health economic argument.

Hospital Pharmacist Familiarity with Patient Discharge Medication Costs

Background:

Drug therapy poses a financial burden for many individuals. Cost-related medication nonadherence is ultimately associated with increased healthcare resource utilization and poor patient outcomes. Physicians are often unaware of the costs associated with their prescribed therapy, but little is documented regarding familiarity of hospital pharmacists with out-of-pocket medication expenses borne by patients in the community setting.

Objective:

To evaluate how familiar hospital pharmacists are with prescribed medication costs for discharged patients.

Methods:

Hospital pharmacists within a specific healthcare organization were invited to participate in an online survey. Ten brief patient case scenarios and associated discharge therapeutic regimens were outlined and respondents were asked to identify the costs that discharged patients would incur when having the prescriptions filled. The total number and proportion of estimates either above or below the actual medication cost as determined from community pharmacies were calculated.

Results:

Thirty-one pharmacists completed the survey. For the therapeutic regimens described, 47% of medication costs were underestimated, 33% were overestimated, and 20% were correctly estimated (within 10% of the actual value). Incorrect estimates were evident across all therapeutic classes and medical indications presented in the survey. The greatest mean absolute cost differences were underestimation of a linezolid treatment course for skin and soft tissue infection ($384.18 below the mean absolute cost) and overestimation of monthly bisoprolol heart failure therapy ($22.42).

Conclusions:

Hospital pharmacists are often unfamiliar with what discharged patients must pay for drug therapy.

Prescription drug coverage and effects on drug expenditures among elderly Medicare beneficiaries

OBJECTIVE

To identify determinants of drug coverage among elderly Medicare beneficiaries and to investigate the impact of drug coverage on drug expenditures with and without taking selection bias into account.

DATA SOURCES/STUDY SETTING

The primary data were from the 2000 Medicare Current Beneficiary Survey (MCBS) Cost and Use file, linked to other data sources at the county or state-level that provided instrumental variables. Community-dwelling elderly Medicare beneficiaries who completed the survey were included in the study (N=7,525). A probit regression to predict the probability of having drug coverage and the effects of drug coverage on drug expenditures was estimated by a two-part model, assuming no correlation across equations. In addition, the discrete factor model estimated choice of drug coverage and expenditures for prescription drugs simultaneously to control for self-selection into drug coverage, allowing for correlation of error terms across equations.

PRINCIPAL FINDINGS

Findings indicated that unobservable characteristics leading elderly Medicare beneficiaries to purchase drug coverage also lead them to have higher drug expenditures on conditional use (i.e., adverse selection), while the same unobservable factors do not influence their decisions whether to use any drugs. After controlling for potential selection bias, the probability of any drug use among persons with drug coverage use was 4.5 percent higher than among those without, and drug coverage led to an increase in drug expenditures of $308 among those who used prescription drugs.

CONCLUSIONS

Given significant adverse selection into drug coverage before the implementation of the Medicare Prescription Drug Improvement and Modernization Act, it is essential that selection effects be monitored as beneficiaries choose whether or not to enroll in this voluntary program.

Rural residence and prescription medication use by community-dwelling older adults: a review of the literature

CONTEXT

Due to various barriers to health care access in the rural setting, there is concern that rural older adults might have lower access to prescribed medications than their urban counterparts.

PURPOSE

To review published research reports to determine prevalence and mean medication use in rural, noninstitutionalized older adults and assess whether rural-urban differences exist.

METHODS

PubMed, Ageline, Cinahl, PsycInfo, International Pharmaceutical Abstracts, Agricola, and Institute for Scientific Information Web of Science - Social Science Index were searched. English-language articles through May 2005 involving a sample of rural, noninstitutionalized older adults and analyses of overall medication prevalence and/or intensity were included. Review articles, conference abstracts, dissertations, books, and articles targeting nonprescription or specific therapeutic categories were excluded. A total of 206 citations were identified and 26 met the inclusion criteria.

FINDINGS

Reported prevalence of prescription medication use by rural older adults varied between 62% and 96%, with 2-6 prescriptions per person. Multivariate analyses results were equally inconsistent. Controlling for insurance, most US studies suggest there is no rural-urban difference in access to prescribed medications. However, this finding may not be generalizable across all regions in the United States or other countries.

CONCLUSIONS

Geographic location may not be as important a variable for medication usage as for other health services utilization.

Impact of multitiered copayments on the use and cost of prescription drugs among Medicare beneficiaries

OBJECTIVES

To assess the impact of multitiered copayments on the cost and use of prescription drugs among Medicare beneficiaries.

DATA SOURCES

Marketscan 2002 Medicare Supplemental and Coordination of Benefits database and Plan Benefit Design database.

STUDY DESIGN

The study uses cross-sectional variation in copayment structures among firms with a self-insured retiree health plan to measure the impact of number of copayment tiers on total and enrollee drug payments, number of prescriptions filled, and generic substitution. The study also assesses the effect of enrollee cost sharing on the cost and use of prescription medications for the long-term treatment of chronic conditions.

DATA COLLECTION METHODS

We linked plan enrollment and benefit data with medical and drug claims for 352,760 Medicare beneficiaries with employer-sponsored retiree drug coverage.

PRIMARY FINDINGS

Medicare beneficiaries in three-tiered plans had 14.3 percent lower total drug expenditures, 14.6 percent fewer prescriptions filled, and 57.6 percent higher out-of-pocket costs than individuals in lower tiered plans. They also had fewer brand name and generic prescriptions filled, and a higher percentage of generics. The estimated price elasticity of demand for prescription drug expenditures was -0.23. Finally, for maintenance medications used for the long-term treatment of chronic conditions, members in three-tiered plans had 11.5 percent fewer prescriptions filled.

CONCLUSIONS

Higher tiered drug plans reduce overall expenditures and the number of prescriptions purchased by Medicare beneficiaries. Beneficiaries are less responsive to cost sharing incentives when using drugs to treat chronic conditions.

Effect of prescription drug coverage on health of the elderly

OBJECTIVE

To estimate the effect of prescription drug insurance on health, as measured by self-reported poor health status, functional disability, and hospitalization among the elderly.

DATA

Analyses are based on a nationally representative sample of noninstitutionalized elderly (≥65 years of age) from the Medicare Current Beneficiary Survey (MCBS) for years 1992-2000.

STUDY DESIGN

Estimates are obtained using multivariable regression models that control for observed characteristics and unmeasured person-specific effects (i.e., fixed effects).

PRINCIPAL FINDINGS

In general, prescription drug insurance was not associated with significant changes in self-reported health, functional disability, and hospitalization. The lone exception was for prescription drug coverage obtained through a Medicare HMO. In this case, prescription drug insurance decreased functional disability slightly. Among those elderly with chronic illness and older (71 years or more) elderly, prescription drug insurance was associated with slightly improved functional disability.

CONCLUSIONS

Findings suggest that prescription drug coverage had little effect on health or hospitalization for the general population of elderly, but may have some health benefits for chronically ill or older elderly.

What impact do prescription drug charges have on efficiency and equity? Evidence from high-income countries

As pharmaceutical expenditure continues to rise, third-party payers in most high-income countries have increasingly shifted the burden of payment for prescription drugs to patients. A large body of literature has examined the relationship between prescription charges and outcomes such as expenditure, use, and health, but few reviews explicitly link cost sharing for prescription drugs to efficiency and equity. This article reviews 173 studies from 15 high-income countries and discusses their implications for important issues sometimes ignored in the literature; in particular, the extent to which prescription charges contain health care costs and enhance efficiency without lowering equity of access to care.

The demand for statin: the effect of copay on utilization and compliance

Increasing drug costs in the US have prompted employers and insurers alike to turn to higher drug copays for cost containment. The effect of rising copays on compliance with statins (HMG-CoA reductase inhibitors) treatment has received surprisingly little attention in the applied literature. This paper uses pharmacy claims data from a commercially insured adult population to determine the effect of copay change on compliance at the individual level. Fixed effect logit and Poisson regressions estimate the effect of copays on monthly likelihood of high compliance and average monthly days of supply respectively. Higher copays reduce compliance among statin users, with less compliant patients responding more strongly to copay change than compliant patients. These results suggest that specific financial incentives given to less compliant patients could improve compliance with statin treatment at a relatively low cost.

Predicting joint replacement waiting times

Currently, the median waiting time for total hip and knee replacement in Ontario is greater than 6 months. Waiting longer than 6 months is not recommended and may result in lower post-operative benefits. We developed a simulation model to estimate the proportion of patients who would receive surgery within the recommended waiting time for surgery over a 10-year period considering a wide range of demand projections and varying the number of available surgeries. Using an estimate that demand will grow by approximately 8.7% each year for 10 years, we determined that increasing available supply by 10% each year was unable to maintain the status quo for 10 years. Reducing waiting times within 10 years required that the annual supply of surgeries increased by 12% or greater. Allocating surgeries across regions in proportion to each region's waiting time resulted in a more efficient distribution of surgeries and a greater reduction in waiting times in the long-term compared to allocation strategies based only on the region's population size.

Estimating the effects of prescription drug coverage for Medicare beneficiaries

OBJECTIVE

To identify the effect of insurance coverage on prescription utilization by Medicare beneficiaries.

DATA SOURCES/STUDY SETTING

Secondary data from the 1999 Medicare Current Beneficiary Survey (MCBS) Cost and Use files, a nationally representative survey of Medicare enrollees.

STUDY DESIGN

The paper uses a cross-sectional design with (1) a standard regression framework to estimate the impact of prescription coverage on utilization controlling for potential selection bias with covariate control based on the Diagnostic Cost Group/Hierarchical Condition Category (DCG/HCC) risk adjuster, and (2) a multistage residual inclusion method using instrumental variables to control for selection bias and identify the insurance coverage effect.

DATA COLLECTION/EXTRACTION METHODS

Data were extracted from the 1999 MCBS. Study inclusion criteria are community-dwelling MCBS respondents with full-year Medicare enrollment and supplemental medical insurance with or without full-year drug benefits. The final sample totaled 5,270 Medicare beneficiaries.

PRINCIPAL FINDINGS

Both the model using the DCG/HCC risk adjuster and the model using the residual inclusion method produced similar results. The estimated price elasticity of demand for prescription drugs for the Medicare beneficiaries in our sample was -0.54.

CONCLUSIONS

Our results confirm that selection into prescription coverage is predictable based on observable health. Our results further confirm prior estimates of price sensitivity of prescription drug demand for Medicare beneficiaries, though our estimate is slightly above prior results.

The complementarity and substitution between unconventional and mainstream medicine among racial and ethnic groups in the United States

OBJECTIVES

To describe racial and ethnic differences in the utilization patterns of 12 common types of complementary and alternative medicine (CAM) and mainstream medicine (MSM) and to test whether a specific CAM type is a substitute for or a complement to MSM among five racial and ethnic groups in the United States.

METHODS

The Medical Expenditure Panel Survey in 1996 and 1998 were used. The sample of 46,673 respondents was stratified into non-Hispanic whites (NHW), Hispanics, blacks, Asians, and other races. Twelve types of CAM visits and visits to office-based and outpatient physicians were used to describe the pattern of CAM and MSM use. Utilization patterns among each racial and ethnic group were established and compared. Multivariate analyses were conducted to test whether each type of CAM and MSM were complements or substitutes within a racial and ethnic group, controlling for respondents' sociodemographics and health.

RESULTS

Significant intergroup differences in the prevalence rates of using various types of CAM were found. In particular, for some racial and ethnic groups, CAM can be either a substitute for or a complement to MSM visits, depending on the CAM type. More complementary relationships between CAM and physician visits were found in NHW and Asians than in other groups. All significant relationships between CAM types and physician visits among Hispanics and other races (predominantly Native American Indians) were substitution.

CONCLUSIONS

Complementarity and substitution of CAM and MSM varied by racial and ethnic groups and by type of CAM. Culturally sensitive approaches are needed in successful integration of CAM in treatment management.

Falling into the Doughnut Hole: Drug Spending among Beneficiaries with End-Stage Renal Disease under Medicare Part D Plans

The Medicare Part D prescription drug benefit may facilitate provision of medications by subsidizing drug costs. However, beneficiaries with higher drug utilization may face higher out-of-pocket (OOP) costs under the benefit's "doughnut hole" provisions that substantially increase beneficiary cost-sharing. The Medicare Current Beneficiary Survey Cost and Use data for 1997 through 2001 were used to estimate the impact of the standard Part D benefit on drug expenditures. The sample consisted of adults who were not dually enrolled in Medicaid (41,617 without ESRD, 256 with ESRD). Outcomes were annual total and OOP drug spending projected to 2006, as well as estimates of individual spending changes under Part D. In 2006, ESRD beneficiaries will have mean annual total and OOP expenditures that are approximately twice that of their Medicare peers. The overall impact of Part D on OOP expenditures is similar among all beneficiaries; however, many individuals with employer-sponsored coverage and those with higher costs (especially those with ESRD) may face cost increases with significant monthly variability as a result of reaching the "doughnut hole," a no-coverage gap in the standard benefit. Therefore, ESRD beneficiaries face substantial total and OOP annual expenditures for medications, causing most to reach the Part D benefit gap. Higher OOP costs may lead to reductions in spending and medication use with subsequent treatment gaps that may lead to increased use of medical services. As the new legislation takes effect, policy makers who are considering modifications in the program may benefit from further research to monitor patterns and gaps in coverage, medication use and spending, and hospitalization and survival trends.

Medicare beneficiaries and the impact of gaining prescription drug coverage on inpatient and physician spending

OBJECTIVE

To assess whether gaining prescription drug coverage produces cost offsets in Medicare spending on inpatient and physician services.

DATA SOURCE

Two-year panels constructed from 1995 to 2000 Medicare Current Beneficiary Survey, a dataset of Medicare claims and health care surveys from the Medicare population.

STUDY DESIGN

We estimated a series of fixed-effects panel models to calculate adjusted changes in Medicare spending as drug coverage was acquired (Gainers) relative to the spending of beneficiaries who never had drug coverage (Nevers). Explanatory variables in the model include age, calendar year, income, and health status.

PRINCIPAL FINDINGS

Assessments of inpatient and physician services spending provided no evidence of overt selection behavior prior to the acquisition of drug coverage (i.e., there were no preswitch spikes in Medicare spending for Gainers). After enrollment, the medical spending of Gainers resembled those of beneficiaries who never had drug coverage. Overall, the multivariate models showed no systematic postenrollment changes in either inpatient or physician spending that could be attributed to the acquisition of drug coverage.

CONCLUSIONS

We found no consistent evidence that drug coverage either increases or reduces spending for hospital and physician services. This does not necessarily mean that drug therapy does not substitute for or complement other medical treatments, but rather that neither effect predominates across the Medicare population as a whole.

Polypharmacy trends in office visits by the elderly in the United States, 1990 and 2000

BACKGROUND

Polypharmacy has been extensively studied internationally and reported to be increasing among the elderly. Within the United States, few studies have examined polypharmacy trends in the elderly population and even fewer studies addressed those at-risk for polypharmacy.

OBJECTIVES

To examine the trends in office-based visits in the United States by the elderly involving polypharmacy and identify elderly at-risk for polypharmacy.

METHODS

Data from the 1990 and 2000 National Ambulatory Medical Care Surveys were used to examine polypharmacy visit trends in the elderly. The Bonferroni inequality method was used to analyze the visit estimates and visit rates. Logistic regression analysis was used to model predisposing, enabling, and need factors associated with polypharmacy visits in the elderly using the 2000 survey data.

RESULTS

Office visits involving polypharmacy for elderly patients were estimated to have nearly quadrupled from 10.1 million in 1990 to 37.5 million in 2000. The proportion of visits by elderly patients involving polypharmacy was 7% in 1990 and 19% in 2000. The increase was consistent among all demographic groups and remained significant even after controlling for elderly population increase. Medication classes involved in polypharmacy remained consistent during the study period and included cardiovascular, hormonal, pain, and gastrointestinal medications. Analysis of the 2000 survey data revealed that several need (multiple diagnoses, chronic problems, and specific disease states), predisposing (female gender), and enabling factors (primary care provider visit and health insurance coverage) were associated with polypharmacy visits in the elderly.

CONCLUSIONS

The study found a significant increase in elderly patients' office visits involving polypharmacy in the United States. The study also found that several need, predisposing, and enabling factors were associated with polypharmacy visits in the elderly. These findings suggest opportunities to review and manage elderly patients' medications as recommended by Healthy People 2010, a national agenda to improve the health of Americans.

Cost-related skipping of medications and other treatments among Medicare beneficiaries between 1998 and 2000. Results of a national study

OBJECTIVE

To report rates of cost-related skipping of medications and other treatments, assess correlates of skipping, examine changes in skipping between 1998 and 2000, and identify factors associated with changes in skipping.

DESIGN, SETTING, AND PARTICIPANTS

Cross-sectional and longitudinal analyses of surveys of a probability sample of Medicare beneficiaries in 13 states in 1998 and 2000.

MAIN OUTCOME MEASURE

Self-reported rates of skipping medications and other treatments.

RESULTS

Cost-related skipping rates increased from 9.5% in 1998 to 13.1% in 2000. In separate multivariable models using 1998 and 2000 data, higher out-of-pocket costs, lower physician-patient relationship quality, low income, and lacking prescription drug coverage were associated with more skipping (P<.05 for all). Better physical and mental health, and greater age were associated with less skipping (P<.05). HMO membership was not associated with higher rates of skipping in 1998 (P=.84), but was in 2000 (P<.0004). In longitudinal analyses, increased medication costs and HMO membership were associated with the observed increase cost-related skipping between 1998 and 2000.

CONCLUSIONS

Cost-related skipping was associated with several factors, including drug coverage, poverty, poor health, and physician-patient relationship quality. The important role of physician-patient relationships in cost-related skipping has not been shown previously. Physicians should be aware of these risk factors for cost-related skipping, and initiate dialogue about problems paying for prescription medications and other treatments.

Riding The Rollercoaster: The Ups And Downs In Out-Of-Pocket Spending Under The Standard Medicare Drug Benefit

This study projects how much Medicare beneficiaries who sign up for the standard Part D drug benefit in 2006 will pay in quarterly out-of-pocket payments through 2008. In the first year we estimate that about 38 percent of enrollees will hit the benefit's no-coverage zone, known as the "doughnut hole," and that 14 percent will exceed the catastrophic threshold. Because drug spending is highly persistent over time, beneficiaries who experience the biggest gaps in coverage are likely to do so year after year, with potentially serious financial consequences.

Prescription Drug Coverage, Health, and Medication Acquisition Among Seniors With One or More Chronic Conditions

BACKGROUND

The unabated rise in medication costs particularly affects older persons with chronic conditions that require long-term medication use, but how prescription benefits affect medication adherence for such persons has received limited study.

OBJECTIVE

We sought to study the relationship among prescription benefit status, health, and medication acquisition in a sample of elderly HMO enrollees with 1 or more common, chronic conditions.

RESEARCH DESIGN

We implemented a cross-sectional cohort study using primary survey data collected in 2000 and administrative data from the previous 2 years.

SUBJECTS

Subjects were aged 67 years of age and older, continuously enrolled in a Medicare + Choice program for at least 2 years, and diagnosed with 1 or more of hypertension, diabetes, congestive heart failure, and coronary artery disease (n = 3073).

MEASURES

Outcomes were the mean daily number of essential therapeutic drug classes and refill adherence.

RESULTS

In multivariate models, persons without a prescription benefit acquired medications in 0.15 fewer therapeutic classes daily and experienced lower refill adherence (approximately 7 fewer days of necessary medications during the course of 2 years) than those with a prescription benefit. A significant interaction revealed that, among those without a benefit, persons in poor health acquired medications in 0.73 more therapeutic classes daily than persons in excellent health; health status did not significantly influence medication acquisition for those with a benefit.

CONCLUSIONS

Coverage of prescription drugs is important for improving access to essential medications for persons with the studied chronic conditions. A Medicare drug benefit that provides unimpeded access to medications needed to treat such conditions may improve medication acquisition and, ultimately, health.

Increased Medicare expenditures for physicians' services: what are the causes?

In light of rising expenditures for physicians' services and the scheduled decreases in the amounts Medicare pays for such services, we identified the sources of change in the volume and intensity of Medicare physicians' services. We found that the per capita volume and intensity of physicians services used by Medicare beneficiaries increased more than 30% between 1993 and 1998. Our analyses indicated that, at most, half of this increase was due to measurable changes in the demographic composition, places of residence, prevalence of health conditions, and managed care enrollment of beneficiaries. The other half was due to a general increase in the use of care across beneficiary categories.

Changes in drug utilization following the outpatient prescription drug cost-sharing program--evidence from Taiwan's elderly

This paper examines changes in drug utilization following Taiwan's newly implemented National Health Insurance (NHI) outpatient prescription drug cost-sharing program for persons over 65 years old. The study is a hospital outpatient prescription level analysis that adopts a pretest-posttest control group experiment design. Selected measures of outpatient prescription drug utilization are examined for cost-sharing and non cost-sharing groups in cost-sharing periods and pre cost-sharing periods. Additional analyses were conducted comparing older patients with and without chronic diseases and differences for essential and non-essential drugs. Patients over age 65 were drawn from 21 hospitals in the Taipei area using a stratified random sampling method. This paper yields several interesting findings. First, average prescription cost and prescription period increased for both the cost-sharing and non cost-sharing groups. However, the rate of increase was significantly less in the cost-sharing group when compared with the non cost-sharing group. Second, the elderly with non-chronic diseases were more sensitive (i.e., reducing drug utilization) to the drug cost-sharing program when compared with those with chronic diseases. Third, for the elderly with non-chronic diseases average drug cost per prescription experienced a smaller decrease in essential drugs but a moderate increase in non-essential drugs for the cost-sharing group. By contrast, for the non cost-sharing group, average drug cost per prescription increased sharply in non-essential drugs as well as essential drugs. Finally, there was a significant increase in the number of prescriptions as well as drug costs above the upper bound of the cost-sharing schedule. The outpatient drug cost-sharing program implemented by the NHI in Taiwan did not reverse the trend of prescription drug cost increases in hospitals. The significant increase in the number of prescriptions above the upper bound of the cost-sharing schedule implies that the NHI should increase the upper bound. Further analysis needs to evaluate any adverse clinical impact for older patients resulting from policy changes.

The Insurance Effect on Prescription Drug Expenditures Among the Elderly

BACKGROUND

Despite continuing debate over a prescription drug benefit for the Medicare program, there has been relatively little research estimating the potential cost of providing such a benefit.

OBJECTIVE

The objective of this study was to estimate the effect of prescription drug insurance on outpatient prescription drug expenditures among the elderly.

RESEARCH DESIGN

We studied respondents aged > or =65 years to the 1997 Medical Expenditure Panel Survey, a representative survey of the U.S. noninstitutionalized population. Survey-weighted linear regression models were used to estimate the probability of any expenditures and total expenditures while controlling for sociodemographic characteristics, chronic conditions, and health status.

MEASURES

We used prescription drug insurance status and outpatient prescription drug expenditures.

RESULTS

An estimated 34 million elderly people filled 630 million prescriptions in 1997. Thirty-seven percent did not have prescription drug insurance. Total prescription drug expenditures exceeded $23 billion. Persons without prescription drug insurance spent slightly less than $7 billion; those with insurance spent more than $16 billion. After controlling for health status, comorbidity, and demographic characteristics, prescription drug insurance increased expenditures by $183 per person. The marginal increase in total expenditures of extending the average observed benefit to those currently uninsured is $2.3 billion (95% confidence interval, $1.2-3.5 billion).

CONCLUSIONS

Proposals for a Medicare drug benefit provide high copayments to protect against insurance effects and to address uncertainty in cost estimates of the proposed benefit. By quantifying the insurance effect on expenditures among the elderly, the data reported here could reduce uncertainty in the budget estimation process.

Assessing the effect of Taiwan's outpatient prescription drug copayment policy in the elderly

OBJECTIVES

This study uses variance cost analysis and regression analysis as tools for investigating the initial effects of Taiwan's outpatient prescription drug copayment program in the elderly. Under its new National Health Insurance program, Taiwan implemented a prescription drug cost-sharing program August 1, 1999. We compare an elderly population's prescription drug use after the policy was implemented with an elderly population's prescription drug use before the policy change to describe initial and general consequences of the drug cost-sharing program.

METHODS

Approximately 240,000 patients aged 65 and over representing 1,600,000 outpatient prescriptions were drawn from 21 hospitals in the Taipei area for the study using a stratified random sampling method. Variance analysis, as used primarily in accounting, was applied to decompose overall cost variance of the policy into the sum of variances of several specific factors that are important to policymakers. The cost variances of each specific factor can be further decomposed into sublevels of analyses. Regression analysis is then applied to better understand covariates that might influence drug cost variances of significant magnitude.

RESULTS

The initial effects of the policy change did not reverse the trend of drug cost increases. Instead, there was a significant increase in total prescription drug costs in the cost-sharing group (approximately 12.86%) and an even higher increase rate in the non-cost-sharing group (approximately 51.42%). The main reason for the drug cost increase for the cost-sharing group was attributed to an increase in average drug costs per prescription (explaining 69.20% of the variance). We found physicians seemed to prescribe more expensive drugs and extend prescription duration, especially when drug costs exceed the upper bound of the cost-sharing schedule. By contrast, the main factor contributing to the increase in drug costs for the non-cost-sharing group was an increase in average prescription duration (explaining 64.98% of the variance). The increase mainly results from the effect of extended prescriptions for chronic diseases that were designed to reduce unnecessary visits for refills.

DISCUSSION

The significant increase in average drug price per prescription indicates that many prescriptions could move above the upper bound of the cost-sharing schedule. The results suggest that the Bureau of National Health Insurance should increase the upper bound. We do not think these effects are unique to Taiwan. Rather, these effects should be considered as countries change their outpatient drug benefit programs. We also found a decrease in utilization of essential drugs with an increase in utilization of nonessential drugs for patients subject to copayments. The results suggest potential adverse effects on patients' health outcome.

Insurance Coverage of Prescription Drugs and the Rural Elderly

CONTEXT

Rural impacts of a Medicare drug benefit will ultimately depend on the number of elderly who are currently without drug coverage, new demand by those currently without coverage, the nature of the new benefit relative to current benefits, and benefit design.

PURPOSE

To enhance understanding of drug coverage among rural elderly Medicare beneficiaries and their expenditures for pharmaceuticals.

METHODS

Estimates of the extent of coverage, expenditures, and sources of drugs were obtained using data are from the 1997 Medicare Current Beneficiary Survey and the Pharmacy Verification and Household Components of the 1996 Medical Expenditure Panel Survey.

FINDINGS

Three-quarters of the urban elderly had some type of drug coverage in 1997 versus 59% of the elderly in rural areas. Urban residents were more likely to have obtained their drug coverage from an employer-sponsored supplemental plan, and rural residents were more likely to have self-purchased Medigap drug coverage. Expenditures and use of drugs by Medicare beneficiaries are greater for those with than without coverage, and differences are invariant with respect to geographic location. Coverage under self-purchased supplemental plans appears less generous than under employer-sponsored plans in both rural and urban areas. Rural and urban elderly are more than twice as likely to receive at least 1 prescribed medication through the mail than the general population.

CONCLUSION

A well-designed Medicare drug benefit would be especially beneficial to the rural elderly because relatively more rural elderly currently lack coverage or have less generous coverage than urban beneficiaries. Mail-order distribution may help contain future program expenditures.

Medicare Drug Coverage And Moral Hazard

This paper explores the effect of more extensive drug coverage in Medicare on the use of and spending for prescription drugs and considers whether any additional use is likely to represent satisfaction of previously unmet needs or whether it represents yet more overuse. Reasonable estimates of the effect on spending strongly suggest that the spending increase will be small and that some of it will go to beneficiaries who do not face high financial barriers at present. Thus, from the viewpoint of improvements in health, national spending on drugs, or pharmaceutical firm revenues, effects are small. The effects of such programs on Medicare's fiscal future are much more important.

Cost of pharmacological care of the elderly: implications for healthcare resources

Expenditures on prescribed medicines are significantly higher among those aged 65 years and over than among younger people. As populations in developed countries age so the cost of pharmacological care associated with the older population can be expected to increase. While pharmacological care represents only one component of healthcare, its costs are increasing rapidly because of advances in technology and increasing use. However, such costs should be considered within a context of decreasing disability in the elderly population, improving economic conditions among seniors and the relationship of these costs with those in other aspects of healthcare. Where medications have been demonstrated to be cost-effective, attempts to curtail expenditure growth may prove a false economy resulting in significantly higher growth elsewhere such as in the hospital and long-term care sectors. Policy responses to this issue should encompass the inclusion of elderly patients in clinical trials, the use of evidence-based principles of practice and strategies to ensure that this population obtain maximum benefit from medication through education and counselling.

Total and out-of-pocket expenditures for prescription drugs among older persons

PURPOSE

The burden of prescription drug costs on Medicare beneficiaries has become a critical policy issue in improving the Medicare program, yet few studies have provided detailed and current information on that burden. The present study estimates total and out-of-pocket expenditures for prescription drugs and the burden of these costs in relation to income among the elderly population. We also compare spending and burden across major subgroups of the elderly population, as defined by socioeconomic and health characteristics, and we distinguish the impact of these factors by using multivariate models.

DESIGN AND METHODS

The study uses nationally representative data on Medicare beneficiaries from the 1997 Medicare Current Beneficiary Survey Cost and Use files. The study estimates out-of-pocket prescription drug spending and burden through ordinary least square, median, and logistic regression models with corrections for the complex survey design.

RESULTS

Our results show that in 1997, nearly 8% of the older population, more than 2.3 million people, spent greater than 10% of their income on prescription drugs. Despite pharmacy coverage, out-of-pocket cost burden fell most heavily on women and those with chronic health conditions. Burden was also higher among those with self-purchased supplemental coverage.

IMPLICATIONS

The impact of Medicare reform proposals on these subgroups has to be carefully evaluated.

Psychotropic prescription use by community-dwelling elderly in the United States

OBJECTIVES

To examine psychotropic prescription use in community-dwelling elderly in the United States and its association with predisposing, enabling, and need factors.

DESIGN

Retrospective analysis of the 1996 Medical Expenditure Survey (MEPS).

SETTING

A national representative sample survey of the United States non-institutionalized population.

PARTICIPANTS

Community-dwelling persons aged 65 and older participating in the MEPS.

MEASUREMENTS

Psychotropic prescription use patterns and factors associated with the use of psychotropics in general as well as of individual classes, specifically antidepressants, antianxiety agents, and sedative/hypnotics.

RESULTS

According to the MEPS, more than 6 million (19%) community-dwelling elderly persons used psychotropic medications in 1996. Nearly 3 million (9.1%) elderly were taking antidepressants, almost 2.5 million (7.5%) antianxiety agents, and 1.5 million (4.8%) sedative/hypnotics. Several correlates of psychotropic prescription use were identified. Enabling (e.g., prescription insurance) and need (e.g., health status) factors were found to be consistently associated with the use of antidepressant, antianxiety, and sedative/hypnotic agents. Predisposing factors such as sex, race, region, and education varied with the type of psychotropic drug class examined.

CONCLUSION

Nearly one in five community-dwelling elderly persons used psychotropic medications, primarily antidepressants followed by antianxiety agents. Enabling and need factors were consistently associated with psychotropic classes examined, whereas most predisposing factors varied with the type of psychotropic drug class.

Factors associated with prescription drug expenditures among children: an analysis of the Medical Expenditure Panel survey

OBJECTIVE

Pharmaceutical costs have reached 14% of total health care costs in the United States and continue to rise. Many studies have looked at factors that influence utilization of hospital and ambulatory care services in the pediatric population. This study examines the factors that influence utilization of prescription drugs in the pediatric population.

METHODS

Data from the 1996 Medical Expenditure Panel Survey (MEPS) were used in the analysis. A 2-part multivariate regression analysis was conducted using pediatric (ages 0-17) prescription drug expenditures as the dependent variable. Independent variables were constructed using demographic variables, socioeconomic variables, health status, and medical conditions.

RESULTS

Black children are less likely than white children to use any prescription drug (odds ratio: 0.67). Similarly, uninsured children are less likely than privately insured children to use any prescription drug (odds ratio: 0.62). Among children who had any prescription drug expenditure in 1996, children who are black, Asian, and Hispanic had lower prescription drug expenditures than children who are white. Children who are uninsured had lower expenditures than children who are privately insured. Children in near-poor families had lower prescription drug expenditures than those in high-income families, even after controlling for insurance status. Children who are covered by Medicaid had comparable prescription drug expenditures to children who are covered by private insurance.

CONCLUSION

Socioeconomic characteristics such as race, insurance status, and family income levels had significant impact on pediatric prescription drug expenditures, even after controlling for the influences of health status and medical conditions.

Medicare minus choice: the impact of HMO withdrawals on rural Medicare beneficiaries

A disproportionate share of the Medicare beneficiaries who lost coverage as a result of recent health maintenance organization (HMO) withdrawals have been from rural areas. Rural beneficiaries are less likely than urban beneficiaries are to have another Medicare+Choice (M+C) option. We surveyed a nationwide random sample of 1,093 rural beneficiaries to assess the impact of HMO withdrawals. A high proportion of beneficiaries ended up without any coverage beyond traditional Medicare; on average, beneficiaries experienced significant increases in premiums; and the proportion of beneficiaries with prescription drug coverage decreased significantly. These results raise questions about whether the federal government should encourage plans to enter rural markets where they will be the only M+C plan and where their withdrawal could have negative consequences for enrollees who lose coverage.