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Sources of regional variation in Medicare Part D drug spending.

ABSTRACT: Sources of regional variation in spending for prescription drugs under Medicare Part D are poorly understood, and such variation may reflect differences in health status, use of effective treatments, or selection of branded drugs over lower-cost generics.We analyzed 2008 Medicare data for 4.7 million beneficiaries for prescription-drug use and expenditures overall and in three drug categories: angiotensin-converting-enzyme (ACE) inhibitors and angiotensin-receptor blockers (ARBs), 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase inhibitors (statins), and selective serotonin-reuptake inhibitors (SSRIs) and serotonin-norepinephrine reuptake inhibitors (SNRIs). Differences in per capita expenditures across hospital-referral regions (HRRs) were decomposed into annual prescription volume and cost per prescription. The ratio of prescriptions filled as branded drugs to all prescriptions filled was calculated. We adjusted all measures for demographic, socioeconomic, and health-status differences.Mean adjusted per capita pharmaceutical spending ranged from $2,413 in the lowest to $3,008 in the highest quintile of HRRs. Most (75.9%) of that difference was attributable to the cost per prescription ($53 vs. $63). Regional differences in cost per prescription explained 87.5% of expenditure variation for ACE inhibitors and ARBs and 56.3% for statins but only 36.1% for SSRIs and SNRIs. The ratio of branded-drug to total prescriptions, which correlated highly with cost per prescription, ranged across HRRs from 0.24 to 0.45 overall and from 0.24 to 0.55 for ACE inhibitors and ARBs, 0.29 to 0.60 for statins, and 0.15 to 0.51 for SSRIs and SNRIs.Regional variation in Medicare Part D spending results largely from differences in the cost of drugs selected rather than prescription volume. A reduction in branded-drug use in some regions through modification of Part D plan benefits might lower costs without reducing quality of care. (Funded by the National Institute on Aging and others.).

SUBMITTER: Donohue JM

PROVIDER: S-EPMC3285245 | biostudies-literature | 2012 Feb

REPOSITORIES: biostudies-literature

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Sources of regional variation in Medicare Part D drug spending.

Donohue Julie M JM Morden Nancy E NE Gellad Walid F WF Bynum Julie P JP Zhou Weiping W Hanlon Joseph T JT Skinner Jonathan J

The New England journal of medicine 20120201 6

<h4>Background</h4>Sources of regional variation in spending for prescription drugs under Medicare Part D are poorly understood, and such variation may reflect differences in health status, use of effective treatments, or selection of branded drugs over lower-cost generics.<h4>Methods</h4>We analyzed 2008 Medicare data for 4.7 million beneficiaries for prescription-drug use and expenditures overall and in three drug categories: angiotensin-converting-enzyme (ACE) inhibitors and angiotensin-recep ...[more]

PMID: 22316446

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Project description:ImportanceThe Medicare Part D Low Income Subsidy (LIS) program provides millions of beneficiaries with drug plan premium and cost-sharing assistance. The extent to which LIS recipients experience subsidy losses with annual redetermination cycles and the resulting associations with prescription drug affordability and use are unknown.ObjectiveTo examine how frequently annual LIS benefits are lost among Medicare Part D beneficiaries and how this is associated with prescription drug use and out-of-pocket costs.Design, setting, and participantsIn this cohort study of Medicare Part D beneficiaries from 2007 to 2018, annual changes in LIS recipients among those automatically deemed eligible (eg, due to dual eligibility for Medicare and Medicaid) and nondeemed beneficiaries who must apply for LIS benefits were analyzed using Medicare enrollment and Part D event data. Subsidy losses were classified in 4 groups: temporary losses (<1 year); extended losses (≥1 year); subsidy reductions (change to partial LIS); and disenrollment from Medicare Part D after subsidy loss. Temporary losses could more likely represent subsidy losses among eligible beneficiaries. Multinomial logit models were used to examine associations between beneficiary characteristics and subsidy loss; linear regression models were used to compare changes in prescription drug cost and use in the months after subsidy losses vs before. Analyses were conducted between November 2022 and November 2023.ExposureSubsidy loss at the beginning of each year among subsidy recipients in December of the prior year.Main outcomes and measuresThe main outcomes were out-of-pocket costs and prescription drug fills overall and for 4 classes: antidiabetes, antilipid, antidepressant, and antipsychotic drugs.ResultsIn 2008, 731 070 full LIS beneficiaries (17%) were not deemed automatically eligible (39% were aged <65 years; 59% were female). Nearly all beneficiaries deemed automatically eligible (≥99%) retained the subsidy annually from 2007 to 2018, compared with 78% to 84% of nondeemed beneficiaries. Among nondeemed beneficiaries, disabled individuals younger than 65 years and racial and ethnic minority groups were more likely to have temporary subsidy losses vs none. Temporary losses were associated with an average 700% increase in out-of-pocket drug costs (+$52.72/mo [95% CI, 52.52-52.92]) and 15% reductions in prescription fills (-0.58 fills/mo [95% CI, -0.59 to -0.57]) overall. Similar changes were found for antidiabetes, antilipid, antidepressant, and antipsychotic prescription drug classes. Beneficiaries who retained their subsidy had few changes.Conclusions and relevanceThe conclusions of this cohort study suggest that efforts to help eligible beneficiaries retain Medicare Part D subsidies could improve drug affordability, treatment adherence, and reduce disparities in medication access.

Project description:ImportancePrescription drug spending is a topic of increased interest to the public and policymakers. However, prior assessments have been limited by focusing on retail spending (Part D-covered drugs), omitting clinician-administered (Part B-covered) drug spending, or focusing on all fee-for-service Medicare beneficiaries, regardless of their enrollment into prescription drug coverage.ObjectiveTo estimate the proportion of health care spending contributed by prescription drugs and to assess spending for retail and clinician-administered prescriptions.Design, setting, and participantsDescriptive, serial, cross-sectional analysis of a 20% random sample of fee-for-service Medicare beneficiaries in the United States from 2008 to 2019 who were continuously enrolled in Parts A (hospital), B (medical), and D (prescription drug) benefits, and not in Medicare Advantage.ExposureCalendar year.Main outcomes and measuresNet spending on retail (Part D-covered) and clinician-administered (Part B-covered) prescription drugs; prescription drug spending (spending on Part B-covered and Part D-covered drugs) as a percentage of total per-capita health care spending. Measures were adjusted for inflation and for postsale rebates (for Part D-covered drugs).ResultsThere were 3 201 284 beneficiaries enrolled in Parts A, B, and D in 2008 and 4 502 718 in 2019. In 2019, beneficiaries had a mean (SD) age of 71.7 (12.0) years, documented sex was female for 57.7%, and 69.5% had no low-income subsidies. Total per-capita spending was $16 345 in 2008 and $20 117 in 2019. Comparing 2008 with 2019, per-capita Part A spending was $7106 (95% CI, $7084-$7128) vs $7120 (95% CI, $7098-$7141), Part B drug spending was $720 (95% CI, $713-$728) vs $1641 (95% CI, $1629-$1653), Part B nondrug spending was $5113 (95% CI, $5105-$5122) vs $6702 (95% CI, $6692-$6712), and Part D net spending was $3122 (95% CI, $3117-$3127) vs $3477 (95% CI, $3466-$3489). The proportion of total annual spending attributed to prescription drugs increased from 24.0% in 2008 to 27.2% in 2019, net of estimated rebates and discounts.Conclusions and relevanceIn 2019, spending on prescription drugs represented approximately 27% of total spending among fee-for-service Medicare beneficiaries enrolled in Part D, even after accounting for postsale rebates.

Project description:ImportanceDespite substantial geographic variation in Medicare per beneficiary spending in the US, little is known about the extent to which social determinants of health (SDoH) are associated with this variation.ObjectiveTo determine the associations between SDoH and county-level price-adjusted Medicare per beneficiary spending.Design, setting, and participantsThis cross-sectional study used county-level data on 2017 Medicare fee-for-service (FFS) spending, patient demographic characteristics (eg, age and gender) and clinical risk score, supply of health care resources (eg, number of hospital beds), and SDoH measures (eg, median income and unemployment rate) from multiple sources. Multivariable regressions were used to estimate the association of the variation in spending across quintiles with SDoH.Main outcomes and measures2017 county-level price-adjusted Medicare Parts A and B spending per beneficiary. SDoH measures included socioeconomic position, race/ethnicity, social relationships, and residential and community context.ResultsAmong 3038 counties with 33 495 776 Medicare FFS beneficiaries (18 352 336 [54.8%] women; mean [SD] age, 72 [1.5] years), mean Medicare price-adjusted per beneficiary spending for counties in the highest spending quintile was $3785 (95% CI, $3706-$3862) higher, or 49% higher, than spending for bottom-quintile counties (mean [SD] spending per beneficiary, $11 464 [735] vs $7679 [522]; P < .001). The total contribution (including through both direct and indirect pathways) of SDoH was 37.7% ($1428 of $3785) of this variation, compared with 59.8% ($2265 of $3785) by patient clinical risk, 14.5% ($549 of $3785) by supply of health care resources, and 19.8% ($751 of $3785) by patient demographic characteristics. When all factors were included within the same model, the direct contribution of SDoH was associated with 5.8% of the variation, compared with 4.6% by supply, 4.7% by patient demographic characteristics, and 62.0% by patient clinical risk.Conclusions and relevanceThese findings suggest social determinants of health are associated with considerable proportions of geographic variation in Medicare spending. Policies addressing SDoH for disadvantaged patients in certain regions have the potential to contain health care spending and improve the value of health care; patient SDoH may need to be accounted for in publicly reported physician performance, and in value-based purchasing incentive programs for health care professionals.

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Sources of regional variation in Medicare Part D drug spending.

Publications

Sources of regional variation in Medicare Part D drug spending.

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