Study: Mixed bag on Pa. Medicare drug plan savings

JOANN LOVIGLIO Associated Press Writer PHILADELPHIA

Seniors enrolled in Medicare's prescription drug program are spending more at the pharmacy with the government's assistance as expected, but that doesn't always mean less spending on pricier hospital stays and doctor visits, a Pennsylvania study has found. For seniors who had no drug coverage or poor coverage before the Medicare drug benefit started in 2006, there was an overall rise in the number of prescriptions filled and a drop in hospitalizations and doctor visits. But those who already had adequate coverage spent more on both prescriptions and medical services after their so-called Medicare Part D benefit kicked in, according to the study in Wednesday's New England Journal of Medicine. "The effect is mixed; it depends on what kind of drug benefit you started with," said Joseph Newhouse, senior author of the study and professor of health policy at Harvard. "The speculation is that people with the most generous coverage beforehand were more likely to be overprescribed than the other groups," he said Researchers looked at medical records of about 35,000 seniors who signed up for Pennsylvania' s Medi care Advantage plan, and compared spending for a few years before and after the benefit began in January 2006. The study tracked drug prescriptions and other medical spending in three groups of seniors: those who previously had no drug coverage, poor coverage (up to $600 annually) and relatively good coverage(up to $1,400 annually). They compared them to a control group who had stable employer-provided drug coverage with no spending limits or coverage gaps. Two years after Medicare Part D began, all three comparison groups were spending more on prescriptions. But when it came to medical services like doctor visits and hospitalizations, the two groups previously with poor to no drug coverage respectively saved $46 and $33 every month. The likely reason is people in those groups with chronic ailments like diabetes and high cholesterol were managing their conditions better because they no longer had to skip drug doses, Newhouse said. But seniors in the group who had pretty good coverage before Medicare Part D actually increased their spending on medical services by $30 a month after the benefit kicked in. That probably means more people in that group were overmedicated or got medical services they didn't really need, researchers said. Newhouse said the findings suggest that changes in copays might be one solution. "Traditional cost sharing has been rather a blunt instrument you pay the same percentage of the bill no matter what," he said. "This could be done in a finer way that would lower copays on those drugs that are really important, or for people with particular conditions." More than 26 million people are enrolled nationally in Medicare Part D, the voluntary federal plan that currently covers prescription drugs for seniors until the total bill reaches $2,700. Seniors then hit the coverage gap sometimes called the "doughnut hole" and must foot the drug bill on their own until their out-of-pocket costs reach $4,350, at which point Medicare coverage resumes. The researchers point out that the results they found in the study's one Pennsylvania drug plan might not hold in every case. It's not surprising that people use more drugs when someone else pays for them, said Dr. Brian Strom, a University of Pennsylvania epidemiologist who was not involved in the study. "What was surprising to me is that the other costs went down" in some instances, he said.