Featured Research

from universities, journals, and other organizations

Medicare Part D prescription drug coverage saved $1.5 billion a year in first 4 years

Date:
March 3, 2014
Source:
Johns Hopkins University Bloomberg School of Public Health
Summary:
Medicare Part D prescription coverage significantly reduced hospital admissions and program expenditures totaling $1.5 billion annually, a new study concludes. In the largest and most rigorous impact analysis of Medicare Part D to date, researchers found that gaining prescription drug insurance through Medicare Part D reduced hospitalizations by 8%, decreased annual Medicare expenditures for hospitalization by 7% and reduced hospital charges associated with hospitalization by 12% during the program's first four years.

A new study by the Johns Hopkins Bloomberg School of Public Health and the University of Illinois at Chicago finds that Medicare Part D prescription coverage significantly reduced hospital admissions and program expenditures totaling $1.5 billion annually.

In the largest and most rigorous impact analysis of Medicare Part D to date, researchers found that gaining prescription drug insurance through Medicare Part D reduced hospitalizations by 8%, decreased annual Medicare expenditures for hospitalization by 7% and reduced hospital charges associated with hospitalization by 12% during the program's first four years.

The study, published by the National Bureau of Economic Research, estimates that the aggregate savings from reduced hospital expenditures associated with expanded Medicare Part D prescription drug coverage totaled approximately $1.5 billion per year, or approximately 2.2% of the total $67.7 billion cost of Medicare Part D in 2011.

"Medicare Part D requires a substantial investment from the Federal Government, and the million dollar question has been, 'Does this investment help to pay for itself by improving the health of seniors who have gained coverage?'" notes G. Caleb Alexander, MD, MS, associate professor of Epidemiology and Medicine and co-director of the Johns Hopkins Center for Drug Safety and Effectiveness. "The answer to that question may seem self-evident, but it is not. Our study provides some of the most rigorous evidence to date regarding the degree to which increased prescription coverage is associated with decreases in downstream health care use and cost."

The expansion of prescription coverage under Medicare Part D in 2006 represented one of the most significant changes to the healthcare landscape since Medicare was introduced in 1966. In the span of several years, the number of elderly -- age 65 and older -- with prescription coverage grew from 66% to 90% and extended to 11 million seniors. The Affordable Care Act (ACA) will expand the reach of the program by closing the gap in coverage known as "the donut hole." The Congressional Budget Office estimates that the ACA increase in coverage will increase the cost of the Medicare Part D program by $51 billion from 2013 to 2022. Given the difficult fiscal times, any savings from Medicare Part D is clearly important and underscores the significance of the research team's findings.

The study drew from a geographically-diverse sample of fee-for-service Medicare beneficiaries--representing tens of millions of persons in each year from 2002 and 2009--and analyzed admissions data for serious conditions, including congestive heart failure (CHF), stroke and chronic obstructive pulmonary disease (COPD). The reduction in admissions varied across conditions. For example, prescription drug insurance coverage was associated with significant decreases in admissions for CHF (18%), coronary atherosclerosis (13%) and COPD (32%). The study also found a 20% decrease in admissions for dehydration and a 13% decrease in admissions for coronary artery diseases.

Associations between prescription drug insurance and resource use were larger than associations between prescription drug coverage and the number of admissions, which implies that gaining prescription drug insurance affected resource-intensive admissions more than low-cost admissions.

The study compared hospital admissions and inpatient spending before and after implementation of Medicare Part D for elderly who were more or less likely to gain prescription drug insurance through Medicare Part D. The study examined data from three sources: the Medicare Provider Analysis and Review file (MEDPAR), the Medicare Beneficiary file (Denominator file), and the Medicare Current Beneficiary Survey (MCBS). The MEDPAR files provide information on all hospital admissions for Medicare beneficiaries not enrolled in Medicare Advantage

The study also examined whether an increase in prescription coverage through Medicare Part D affected mortality. Researchers did not find a significant association.

"The questions we examine are fundamental ones that policy-makers have grappled with since the design of Part D a decade ago," reports Robert Kaestner, Professor of Economics at the University of Illinois at Chicago. "These results are of high relevance to federal and state policy-makers as they design programs to enhance Americans access to prescription drugs."


Story Source:

The above story is based on materials provided by Johns Hopkins University Bloomberg School of Public Health. Note: Materials may be edited for content and length.


Journal Reference:

  1. Christopher C. Afendulis, Yulei He, Alan M. Zaslavsky, Michael E. Chernew. The Impact of Medicare Part D on Hospitalization Rates. Health Services Research, 2011; 46 (4): 1022 DOI: 10.1111/j.1475-6773.2011.01244.x

Cite This Page:

Johns Hopkins University Bloomberg School of Public Health. "Medicare Part D prescription drug coverage saved $1.5 billion a year in first 4 years." ScienceDaily. ScienceDaily, 3 March 2014. <www.sciencedaily.com/releases/2014/03/140303092645.htm>.
Johns Hopkins University Bloomberg School of Public Health. (2014, March 3). Medicare Part D prescription drug coverage saved $1.5 billion a year in first 4 years. ScienceDaily. Retrieved October 2, 2014 from www.sciencedaily.com/releases/2014/03/140303092645.htm
Johns Hopkins University Bloomberg School of Public Health. "Medicare Part D prescription drug coverage saved $1.5 billion a year in first 4 years." ScienceDaily. www.sciencedaily.com/releases/2014/03/140303092645.htm (accessed October 2, 2014).

Share This



More Health & Medicine News

Thursday, October 2, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Pregnancy Spacing Could Have Big Impact On Autism Risks

Pregnancy Spacing Could Have Big Impact On Autism Risks

Newsy (Oct. 1, 2014) A new study says children born less than one year and more than five years after a sibling can have an increased risk for autism. Video provided by Newsy
Powered by NewsLook.com
Robotic Hair Restoration

Robotic Hair Restoration

Ivanhoe (Oct. 1, 2014) A new robotic procedure is changing the way we transplant hair. The ARTAS robot leaves no linear scarring and provides more natural results. Video provided by Ivanhoe
Powered by NewsLook.com
Insertable Cardiac Monitor

Insertable Cardiac Monitor

Ivanhoe (Oct. 1, 2014) A heart monitor the size of a paperclip that can save your life. The “Reveal Linq” allows a doctor to monitor patients with A-Fib on a continuous basis for up to 3 years! Video provided by Ivanhoe
Powered by NewsLook.com
Attacking Superbugs

Attacking Superbugs

Ivanhoe (Oct. 1, 2014) Two weapons hospitals can use to attack superbugs. Scientists in Ireland created a new gel resistant to superbugs, and a robot that can disinfect a room in minutes. Video provided by Ivanhoe
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins