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Researchers Weigh Benefits of Medicare Part D for Seniors
By Zachary Binney, University of_Chicago Maroon
January 25, 2008
Is Medicare Part D the prescription for seniors’ drug affordability woes? An analysis by University researchers finds the new prescription drug benefit saves seniors significant amounts of money and gives them more pills, but it remains unclear whether the program is worth its multi-billion-dollar price tag.
Part D is a federal program, part of the 2003 Medicare Modernization Act, that was implemented in 2006 and designed to improve access to and lower the costs of prescription drugs for seniors. People could enroll for free before May 15, 2006, or for a penalty after that date. Enrollment stabilized after the May 15 deadline.
The study collected data on 117,468 Walgreens customers, aged 66–79, who filled at least one prescription in 2005 and 2006. It compared these people with a control group aged 60 to 63 who weren’t eligible for the benefit but whose prescription drug patterns closely resembled the older group’s.
The study, which will appear in the February 5 edition of the Annals of Internal Medicine, found that for a 10-month period after the May 15 deadline, Part D saved the average eligible Medicare beneficiary about $6 per month, a 13.1-percent decrease in out-of-pocket prescription costs.
It also provided them four extra “pill-days” per month, a 5.9-percent increase. One pill day equals a 24-hour supply of one prescription drug.
“These are modest effects given the enormity of the program,” said Anirban Basu, an assistant professor of medicine at the University and study author, in a telephone interview.
But these gains were much bigger among just those enrolled. They saw a $9 (17-percent) monthly decrease in out-of-pocket costs and 13 to 14 extra pill-days. In contrast, those who were eligible but didn’t enroll did not experience significant changes.
These are the more meaningful numbers, said Basu and co-author Wesley Yin, an assistant professor in the Harris School of Public Policy and Robert Wood Johnson Health Policy Scholar at Harvard.
“[Those who enrolled] had more to gain from it,” Yin said in a telephone interview. “To say for the people who did not enroll, they would have gotten the same effects, that’s not true. Because it wasn’t the average person who enrolled.”
“These patients who enrolled selected to enroll, and that’s why they received the most benefits,” Basu said. “Maybe they were sicker or needed more drugs.”
Yin and Basu say while the program is working, the improvements in drug access seen in their analysis do not answer whether Part D is worth its annual cost, which runs into the tens of billions of dollars.
“Really, the justification would only be possible if we translate this into health improvements for these beneficiaries,” Basu said. The authors plan to study this in the future, but the federal government hasn’t released the Medicare claims data they would need for such an analysis.
“Some people might say they’re overusing drugs and it’s not worth it, or it could be that these people really needed drugs, in which case this has been enormously helpful,” Yin said. “We need to see the clinical benefits.”
The study was co-authored by Basu; Yin; Atonu Rabbani, David Meltzer, and G. Caleb Alexander of the U of C Medical Center; and James Zhang of Virginia Commonwealth University.
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