qotd: Part D drug benefit did not save money for Medicare

Annals of Internal Medicine
June 16, 2015
Did Medicare Part D Affect National Trends in Health Outcomes or
Hospitalizations?: A Time-Series Analysis
By Becky A. Briesacher, PhD; Jeanne M. Madden, PhD; Fang Zhang, PhD;
Hassan Fouayzi, MS; Dennis Ross-Degnan, ScD; Jerry H. Gurwitz, MD; and
Stephen B. Soumerai, ScD

Background: Medicare Part D increased economic access to medications,
but its effect on population-level health outcomes and use of other
medical services remains unclear.

Objective: To examine changes in health outcomes and medical services in
the Medicare population after implementation of Part D.

Results: Five years after Part D implementation, no clinically or
statistically significant reductions in the prevalence of fair or poor
health status or limitations in ADLs or instrumental ADLs, relative to
historical trends, were detected. Compared with trends before Part D, no
changes in emergency department visits, hospital admissions or days,
inpatient costs, or mortality after Part D were seen. Confirmatory
analyses were consistent.

Conclusion: Five years after implementation, and contrary to previous
reports, no evidence was found of Part D's effect on a range of
population-level health indicators among Medicare enrollees. Further,
there was no clear evidence of gains in medical care efficiencies.

http://annals.org/article.aspx?articleid=2322799

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news@Northeastern
June 16, 2015
Researchers find prescription drug benefit did not save money for Medicare
By Joe O'Connell

For years, the Medicare pre­scrip­tion drug ben­efit Part D has been
cred­ited with pos­i­tively impacting national trends in health
out­comes and med­ical ser­vices. But a recent study led by
North­eastern asso­ciate pro­fessor Becky Briesacher chal­lenges that
assump­tion.

"We are con­cluding that Medicare Part D did not save the (Medicare)
pro­gram any money overall," said Briesacher, a health ser­vices
researcher in the School of Phar­macy with nationally-​​recognized
exper­tise in drug policy and med­ica­tion use in older adults. "You
have to be real­istic about the fact that giving people access to
med­ica­tion is impor­tant, but it's not going to sub­stan­tially save
money in other parts of the health care system or keep a sig­nif­i­cant
number of people out of the hospital."

http://www.northeastern.edu/news/2015/06/researchers-find-prescription-drug-benefit-did-not-save-money-for-medicare/

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Comment by Don McCanne

Although it was important to include a drug benefit in the Medicare
program there was concern that the conservatives designing the program
wanted to allow the market to work its magic. The program was to be
administered by private pharmacy benefit managers (PBMs) rather than the
government. In fact, the government was even prohibited from negotiating
drug prices with the manufacturers. Further, it was thought that the
benefits of improving access to drugs would make patients healthier thus
reducing future costs for Medicare.

This study shows that the magic did not work in that the drug benefit
did not save money for Medicare, and it did not measurably change the
health status of Medicare beneficiaries. Specifically there were no
changes in emergency room visits, hospitalizations, and inpatient costs,
nor was there any change in mortality.

It would not be surprising to see conservatives propose that the Part D
program be terminated since it supposedly isn't doing any good. But
there are innumerable studies that have shown that some medications do
provide at least a modest benefit, though those benefits were not
detected by this study.

At any rate, it is clear that PBMs are not as effective price
negotiators as is our government, as demonstrated by the greater value
in drug purchasing that we have through the VA and the Medicaid program.
Also, the PBMs waste considerable funds in excess administrative
activities, not to mention the added middleman profits that they divert
to themselves.

Under an improved Medicare for all we would have a more efficient and
less costly publicly-administered program that would ensure that the
government was paying fair prices for our drugs. It is not that way now.