Prescription drug benefit did not save Medicare money

Researchers said the savings expected when the drug subsidization program was enacted do not exist.

UPI story by Stephen Feller.

"BOSTON, June 16 (UPI) -- Medicare Part D was implemented in 2006 in an effort to drive down Medicare costs by offering seniors discounted medications but a new study has found that the program has had no effect on the amount of money spent on Medicare.

Researchers suggest the Congressional Budget Office amend its methods for measuring Medicare costs because of provisions in the Affordable Care Act, passed in 2009, that will decrease Part D cost-sharing by the federal government based on Medicare savings the new study says do not exist.

"We are con­cluding that Medicare Part D did not save the pro­gram any money overall," said Becky Briesacher, a health ser­vices researcher in the School of Phar­macy at Northeastern University, in a press release. "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."

Medicare Part D was enacted in 2003 as part of the Medicare Modernization Act to subsidize the costs of prescription drugs for seniors using Medicare and went into effect in 2006. The expectation of the program was that it would lower overall Medicare costs because as seniors have more access to drugs that are part of their health treatment, the amount of care these people would need would decrease. 

While early studies showed statistically significant decreases in nondrug medical spending and hospitalizations, the increased access to medications over time, however, has not led to a clear decrease in emer­gency room visits, hos­pital stays, inpa­tient costs or mor­tality, researchers said.

The Medicare Cur­rent Ben­e­fi­ciary survey, which is an annual face-​​to-​​face panel survey of about 12,000 Medicare subscribers, showed the difference for Medicare subscribers has been insignificant as the data shows just a 2 percent decrease of people reporting their health as poor between 2006 and 2010. 

Researchers are suggesting the Congressional Budget Office, which tracks government spending and scores legislation for its potential future costs, "re-examine" its policy figuring that medical spending decreases by 0.2 percent for each 1 percent increase in drug prescriptions filled. 

The Affordable Care Act, which made alterations to the Medicare program as part of its expansive effort to improve access to health care when it was passed in 2009, includes provisions to decrease over time the costs it shares with Medicare subscribers. Those decreases are based on an assumed $35 billion of savings, mostly through a reduction in hospitalization that researchers say Medicare data does not show is happening.

"We'd like the Con­gres­sional Budget Office to re-​​examine the policy," Briesacher said. "It's about prop­erly scoring the leg­is­la­tion so it doesn't assume these cost-​​offsets that we can't find.""