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Use of intelligent assignment to Medicare Part D plans for people with schizophrenia could produce substantial savings.

ABSTRACT: Medicare insures about half of the people in the United States diagnosed with schizophrenia. More than 90 percent of these beneficiaries are eligible for a low-income subsidy for their Part D prescription drug benefit, and the great majority of them are randomly assigned to a stand-alone drug plan. We simulated savings from replacing random assignment with an "intelligent assignment" algorithm that would assign beneficiaries to the least expensive plan in 2010 based on their drug usage in the previous year. Doing so generated projected annual drug savings of $379 per dual-eligible (those enrolled in both Medicaid and Medicare) beneficiary with a low-income subsidy; $404 per non-dual eligible with the subsidy; and $604 per beneficiary for those without the subsidy who chose their own plans. This translates into savings of $466 per beneficiary with schizophrenia. Intelligent assignment could have saved about $150 million for Medicare and beneficiaries with schizophrenia combined in 2010. We recommend that Medicare use intelligent assignment as the default approach for all beneficiaries with schizophrenia who receive a low-income subsidy, and consider it as an option for all Part D beneficiaries, regardless of their income.

SUBMITTER: Zhang Y

PROVIDER: S-EPMC4349210 | biostudies-other | 2015 Mar

REPOSITORIES: biostudies-other

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Use of intelligent assignment to Medicare Part D plans for people with schizophrenia could produce substantial savings.

Zhang Yuting Y Baik Seo Hyon SH Newhouse Joseph P JP

Health affairs (Project Hope) 20150301 3

Medicare insures about half of the people in the United States diagnosed with schizophrenia. More than 90 percent of these beneficiaries are eligible for a low-income subsidy for their Part D prescription drug benefit, and the great majority of them are randomly assigned to a stand-alone drug plan. We simulated savings from replacing random assignment with an "intelligent assignment" algorithm that would assign beneficiaries to the least expensive plan in 2010 based on their drug usage in the pr ...[more]

PMID: 25732496

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Project description:ImportanceRising pharmaceutical costs in the United States are an increasing source of financial burden for payers and patients. Although topical steroids are among the most commonly prescribed medications in dermatology, there are limited data on steroid-related spending and utilization.ObjectiveTo characterize Medicare and patient out-of-pocket costs for topical steroids, and to model potential savings that could result from substitution of the cheapest topical steroid from the corresponding potency class.Design, setting, and participantsThis study was a retrospective cost analysis of the Medicare Part D Prescriber Public Use File, which details annual drug utilization and spending on both generic and branded drugs from 2011 to 2015 by Medicare Part D participants who filled prescriptions for topical steroids.Main outcomes and measuresTotal and potential Medicare and out-of-pocket patient spending. Costs were adjusted for inflation and reported in 2015 dollars.ResultsMedicare Part D expenditures on topical steroids between 2011 and 2015 were $2.3 billion. Patients' out-of-pocket spending for topical steroids over the same period was $333.7 million. The total annual spending increased from $237.6 million to $775.9 million, an increase of 226.5%. Patients' annual out-of-pocket spending increased from $41.4 million to $101.8 million, an increase of 145.9%. The total number of prescriptions were 7.7 million in 2011 and 10.6 million in 2015, an increase of 37.0%. Generic medication costs accounted for 97.8% of the total spending during this time period. The potential health care savings and out-of-pocket patient savings from substitution of the cheapest topical steroid within the corresponding potency class were $944.8 million and $66.6 million, respectively.Conclusions and relevanceMost topical steroids prescribed were generic drugs. There has been a sharp increase in Medicare and out-of-pocket spending on topical steroids that is driven by higher costs for generics. Use of clinical decision support tools to enable substitution of the most affordable generic topical steroid from the corresponding potency class may reduce drug expenditures.

Project description:BACKGROUND:Health care providers who participate as an accountable care organization (ACO) in the voluntary Medicare Shared Savings Program (MSSP) have incentives to lower spending for Medicare patients while achieving high performance on a set of quality measures. Little is known about the extent to which early savings achieved by ACOs in the program have grown and been replicated by ACOs that entered the program in later years. ACOs that are physician groups have stronger incentives to lower spending than hospital-integrated ACOs. METHODS:Using fee-for-service Medicare claims from 2009 through 2015, we performed difference-in-differences analyses to compare changes in Medicare spending for patients in ACOs before and after entry into the MSSP with concurrent changes in spending for local patients served by providers not participating in the MSSP (control group). We estimated differential changes (i.e., the between-group difference in the change from the pre-entry period) separately for hospital-integrated ACOs and physician-group ACOs that entered the MSSP in 2012, 2013, or 2014. RESULTS:MSSP participation was associated with differential spending reductions in physician-group ACOs. These reductions grew with longer participation in the program and were significantly greater than the reductions in hospital-integrated ACOs. By 2015, the mean differential change in per-patient Medicare spending was -$474 (-4.9% of the pre-entry mean, P<0.001) for physician-group ACOs that entered in 2012, -$342 (-3.5% of the pre-entry mean, P<0.001) for those that entered in 2013, and -$156 (-1.6% of the pre-entry mean, P=0.009) for those that entered in 2014. The corresponding differential changes for hospital-integrated ACOs were -$169 (P=0.005), -$18 (P=0.78), and $88 (P=0.14), which were significantly lower than for physician-group ACOs (P<0.001). Spending reductions in physician-group ACOs constituted a net savings to Medicare of $256.4 million in 2015, whereas spending reductions in hospital-integrated ACOs were offset by bonus payments. CONCLUSIONS:After 3 years of the MSSP, participation in shared-savings contracts by physician groups was associated with savings for Medicare that grew over the study period, whereas hospital-integrated ACOs did not produce savings (on average) during the same period. (Funded by the National Institute on Aging.).

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Use of intelligent assignment to Medicare Part D plans for people with schizophrenia could produce substantial savings.

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Use of intelligent assignment to Medicare Part D plans for people with schizophrenia could produce substantial savings.

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