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Medicare Drug Program
Cap on Drug Coverage in Medicare + Choice Was Bad
Medicine
Study finds old $1,000 cap contributed to poor
health, more expense
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For media coverage, reactions,
implications for Medicare, see KaiserNet report below news
story. |
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June 1, 2006 - In a study that looked at Medicare +
Choice (a program that preceded Medicare Advantage and Part D coverage)
researchers concluded that a cap on drug benefits for Medicare patients
reduced the purchase and consumption of prescription drugs. The cap was
also associated with unfavorable clinical outcomes. The authors also
found that capped drug coverage failed to save money overall.
These are the findings of a study in the June 1st,
2006 issue of the New England Journal of Medicine.
While this study looked at a benefit design that
has some of the same characteristics of the standard Medicare Part D
benefit, Part D provides more comprehensive coverage, explained the
researchers. Medicare Part D has an initial limit of $2250, not $1000.
It also has important catastrophic coverage. And it provides very
comprehensive coverage for those eligible for low income subsidies.
The study, by investigators with Kaiser
Permanentes Division of Research in Oakland, Calif., the University of
California San Francisco and Harvard University, followed more than
157,000 Medicare + Choice beneficiaries in 2003 who faced a $1,000
annual drug benefit cap and compared them to almost 42,000 people who
had no cap on their drug benefits.
We know from this study that placing an annual
drug benefit cap of $1,000 on patients had a consistent, negative impact
on their overall health said John Hsu, MD, of Kaiser Permanentes
Division of Research, the lead investigator and author of the study.
While there were initial savings because of lower
pharmacy costs, there were no overall savings due to increased medical
spending on non-drug related medical costs, he added.
Hsu explained that patients that faced the cap
spent 31 percent less on medications over the course of a year, but had
more emergency department visits and non-elective hospitalizations.
Many health insurance plans have limited drug
benefits in an effort to control prescription drug costs. The hope is
that a benefit limit will create an incentive for patients to use
medications more judiciously. This study shows that reality is more
complex, said Hsu.
With any new benefit policy, Hsu said it is very
important to monitor the medical and economic effects for patients and
society. We need to understand the intended and unintended consequences
of drug benefit policies before we can make informed decisions on how to
improve the health care system.
The researchers say the drug cap effects were
particularly noticeable in people with chronic diseases such as high
blood pressure, high cholesterol and diabetes. These patients often
failed to take their medications as prescribed, particularly in the
months after patients exceeded the cap, which resulted in poor control
of their health problems.
Limited drug benefits led to more emergency
department visits, hospitalizations and deaths, according to the
researchers. Higher costs for hospitalizations and emergency department
visits offset the savings from drugs costs associated with the cap, they
added.
Finding affordable ways to pay for medications is
a challenge in the United States, said Hsu. However, the $1,000 drug
benefit limit we looked at seems to be associated with poorer health
outcomes without saving money overall.
Hsu points out that this study looks at a specific
patient population, in a specific health plan, in 2003. That plan is no
longer offered at Kaiser Permanente. Hsu also explained that the new
Medicare Part D plan is an attempt to address some of the problems
encountered in programs that place a strict cap on prescription drug
benefits.
Under Medicare Part D the coverage limits are
higher than the $1,000 limit looked at in this study. In addition Part D
includes catastrophic coverage for people with very high medication
expenses, and comprehensive coverage for people with the lowest incomes.
Funding for the study came from the Agency for
Healthcare Research and Quality, the National Institute on Aging, and
the Alfred P. Sloan Foundation. The research team includes John Hsu, MD,
MBA, MSCE, Mary Price, MA, Jie Huang, PhD, Vicki Fung, Bruce Fireman,
MA, and Joseph V. Selby, MD, MPH from the Division of Research; Rita Hui,
PharmD from the Kaiser Pharmacy Outcomes Research Group; Richard Brand,
PhD from the University of California San Francisco; and Joseph P.
Newhouse, PhD from the Harvard Medical School, Harvard School of Public
Health, and the Kennedy School of Government.
The Kaiser Permanente Division of Research conducts, publishes, and
disseminates epidemiologic and health services research to improve the
health and medical care of Kaiser Permanente members and the society at
large. It seeks to understand the determinants of illness and well being
and to improve the quality and cost-effectiveness of health care.
Currently, DORs 400-plus staff is working on more than 250
epidemiological and health services research projects.
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Medicare Daily
Report
Caps on Rx Drug Benefits Do Not
Lower Insurers' Costs, Can Result in Expensive
Complications, Study of Medicare Beneficiaries Says
[Jun 01, 2006]
Medicare beneficiaries with caps on prescription drug
coverage spend 31% less on medications than those without
caps but are more likely than those without caps to skip
doses of treatments, visit hospital emergency departments
and die, according to a study published on Thursday in the
New England Journal of Medicine, the
Washington Post reports (Washington Post, 6/1).
For
the study, researchers at
Kaiser Permanente, the
University of California-San Francisco and
Harvard University examined the cost of medical care and
clinical outcomes for 199,179 Medicare beneficiaries
enrolled in a Kaiser Medicare+Choice plan in 2003.
Researchers compared a group of 157,275 participants with a
$1,000 annual cap on prescription drug coverage with a group
of 41,904 participants without a cap (Hechinger, Wall Street
Journal, 6/1).
All
participants had to make copayments of between $15 and $30
for brand-name prescription drugs and copays of $10 for
generic medications (Washington Post, 6/1). The study finds
that both groups of participants had about the same total
medical costs, in large part because those with caps on
prescription drug coverage had a 9% higher rate of ED
visits, a 13% higher rate of nonelective hospitalizations
and a 22% higher mortality rate (Wall Street Journal, 6/1).
In
addition, the study finds that participants who reached
their caps on prescription drug coverage often skipped doses
of medications and were more likely to have problems with
blood pressure, cholesterol and diabetes (Kleffman,
Contra Costa Times, 6/1). According to the study, 18.1%
of participants with caps on prescription drug coverage
skipped doses of hypertension medications, compared with
14.6% of those without caps (Wall Street Journal, 6/1). The
Agency for Healthcare Research and Quality, the
National Institute on Aging and the
Alfred P. Sloan Foundation funded the study (Colliver,
San Francisco Chronicle, 6/1).
Reaction
John Hsu, a physician at the Kaiser Division of Research and
lead author of the study, said, "There was harm associated
with the drug benefit cap. Once they lost their coverage,
the people with a cap were taking far fewer medications and
their blood pressure and cholesterol became worse" (Contra
Costa Times, 6/1). In an editorial that accompanied the
study, Kenneth Thorpe, a professor of health policy at
Emory University, writes that the results indicate
individuals with chronic diseases should not have caps on
prescription drug coverage (Wall Street Journal, 6/1). Mohit
Ghose, a spokesperson for
America's Health Insurance Plans, said that Kaiser ended
caps on prescription drug coverage for Medicare
beneficiaries in 2004 and that such caps are not common
among health plans (Sevrens Lyons,
San Jose Mercury News, 6/1).
Implications for Medicare Prescription Drug Benefit
The study "gives ammunition to critics of the new Medicare
[prescription drug benefit], which includes payment
restrictions," the Journal reports (Wall Street Journal,
6/1). Under the Medicare prescription drug benefit,
beneficiaries are responsible for 100% of total annual
medication costs between $2,250 and $5,100 (San Jose Mercury
News, 6/1). In his editorial, Thorpe writes that the
coverage gap in the Medicare drug benefit "may very well be
penny-wise and pound-foolish" (Wall Street Journal, 6/1).
However, Jack Cheevers, a spokesperson for
CMS in San Francisco, said that millions of Medicare
beneficiaries will never reach the coverage gap and that
concerned beneficiaries can purchase supplemental coverage
(San Jose Mercury News, 6/1).
● An
abstract of the study is available
online.
"Reprinted with
permission from kaisernetwork.org You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign up
for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a free service of The Henry J. Kaiser Family
Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation.
All rights reserved.
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