Dollars to Doughnuts: Predicting Prescription Drug Costs of Beneficiaries and...M. Christopher Roebuck
ABSTRACT
Title
Dollars to Doughnuts: Predicting Prescription Drug Costs of Beneficiaries and the Medicare Program Under Part D
Authors
M. Christopher Roebuck, MBA1
Dominick Esposito, PhD2
Meredith Lewis, BS1
1 Caremark, Hunt Valley, MD
2 Mathematica Policy Research, Princeton, NJ
Research Objective
To examine drug utilization and out-of-pocket costs of Medicare beneficiaries using a Medicare prescription drug discount card, including beneficiaries who qualified for the Transitional Assistance Program (TAP).
Study Design
Data included eligibility and prescription claims for enrollees in 34 separate Medicare drug discount card programs managed by Caremark. We used claims data to calculate annualized utilization and costs for beneficiaries and, in turn, simulated Medicare beneficiaries’ out-of-pocket costs (excluding premiums) and costs to Medicare under the Part D benefit. We estimated a generalized linear model (GLM; gamma distribution with log link function) for both beneficiary costs and Medicare payments under Part D to identify factors associated with drug expenditures. A probit model for the likelihood of falling into the doughnut hole was also specified. Explanatory variables in the models included demographic characteristics (age, gender, region, and TAP status), the generic dispensing rate, and 62 disease indicators derived using a pharmacy-based classification system.
Population Studied
Beneficiaries enrolled for a minimum of six months with at least one claim between June 2004 and November 2005 (n=37,425). Participants were largely female (67%), between the ages of 65 and 80 (70%), and had an average of 2.2 medical conditions, with hypertension (52%), hypercholesterolemia (27%), and diabetes (16%) being among the most prevalent.
Principal Findings
On average, beneficiaries in the sample filled 19 prescriptions at an annual cost of $538. Under the standard Part D benefit, mean total drug expenditures for these seniors would be $849 annually with $412 paid by the beneficiary and $437 paid by Medicare. About 6% of these beneficiaries have annual spending greater than $2,250 (the benefit’s “doughnut hole”). TAP beneficiaries (46%) would have higher out-of-pocket costs under Part D than the drug discount card ($429 versus $256; p<0><0><0><0.001).
Conclusions
TAP beneficiaries who do not qualify for subsidized coverage under Part D will face higher out-of-pocket costs than under the discount drug card program, assuming fixed drug utilization. Increased use of generic drugs in proportion to brand name drugs would benefit the Medicare program more than beneficiaries, on average, due to the standard benefit’s structure.
Implications for Policy, Delivery, and Practice
In choosing whether or not to enroll in Medicare Part D, seniors will compare their annual premium with the expected payout of the Medicare program. These results suggest the average, risk-neutral beneficiary would only enroll at monthly premiums below $36 ($437 divided by 12). If faced with higher out-of-pocket costs, low-income beneficiaries who do not qualify for subsidies may reduce their prescription drug utilization potentially resulting in adverse health effects. Finally, to reduce costs to both beneficiaries and taxpayers, Medicare should promote the substitution of generic medications whenever possible. Assuming 29 million Medicare Part D enrollees, the Medicare program could save more than $1.2 billion annually by increasing the generic dispensing rate 10%.
Dollars to Doughnuts: Predicting Prescription Drug Costs of Beneficiaries and...M. Christopher Roebuck
ABSTRACT
Title
Dollars to Doughnuts: Predicting Prescription Drug Costs of Beneficiaries and the Medicare Program Under Part D
Authors
M. Christopher Roebuck, MBA1
Dominick Esposito, PhD2
Meredith Lewis, BS1
1 Caremark, Hunt Valley, MD
2 Mathematica Policy Research, Princeton, NJ
Research Objective
To examine drug utilization and out-of-pocket costs of Medicare beneficiaries using a Medicare prescription drug discount card, including beneficiaries who qualified for the Transitional Assistance Program (TAP).
Study Design
Data included eligibility and prescription claims for enrollees in 34 separate Medicare drug discount card programs managed by Caremark. We used claims data to calculate annualized utilization and costs for beneficiaries and, in turn, simulated Medicare beneficiaries’ out-of-pocket costs (excluding premiums) and costs to Medicare under the Part D benefit. We estimated a generalized linear model (GLM; gamma distribution with log link function) for both beneficiary costs and Medicare payments under Part D to identify factors associated with drug expenditures. A probit model for the likelihood of falling into the doughnut hole was also specified. Explanatory variables in the models included demographic characteristics (age, gender, region, and TAP status), the generic dispensing rate, and 62 disease indicators derived using a pharmacy-based classification system.
Population Studied
Beneficiaries enrolled for a minimum of six months with at least one claim between June 2004 and November 2005 (n=37,425). Participants were largely female (67%), between the ages of 65 and 80 (70%), and had an average of 2.2 medical conditions, with hypertension (52%), hypercholesterolemia (27%), and diabetes (16%) being among the most prevalent.
Principal Findings
On average, beneficiaries in the sample filled 19 prescriptions at an annual cost of $538. Under the standard Part D benefit, mean total drug expenditures for these seniors would be $849 annually with $412 paid by the beneficiary and $437 paid by Medicare. About 6% of these beneficiaries have annual spending greater than $2,250 (the benefit’s “doughnut hole”). TAP beneficiaries (46%) would have higher out-of-pocket costs under Part D than the drug discount card ($429 versus $256; p<0><0><0><0.001).
Conclusions
TAP beneficiaries who do not qualify for subsidized coverage under Part D will face higher out-of-pocket costs than under the discount drug card program, assuming fixed drug utilization. Increased use of generic drugs in proportion to brand name drugs would benefit the Medicare program more than beneficiaries, on average, due to the standard benefit’s structure.
Implications for Policy, Delivery, and Practice
In choosing whether or not to enroll in Medicare Part D, seniors will compare their annual premium with the expected payout of the Medicare program. These results suggest the average, risk-neutral beneficiary would only enroll at monthly premiums below $36 ($437 divided by 12). If faced with higher out-of-pocket costs, low-income beneficiaries who do not qualify for subsidies may reduce their prescription drug utilization potentially resulting in adverse health effects. Finally, to reduce costs to both beneficiaries and taxpayers, Medicare should promote the substitution of generic medications whenever possible. Assuming 29 million Medicare Part D enrollees, the Medicare program could save more than $1.2 billion annually by increasing the generic dispensing rate 10%.
RebelFone a telecom company, specializing in managing the international roaming cost for business & leisure travelers. RebelFone has strong tie ups with more than 40 mobile carriers around the world and provide temporary local cell phone hire to American travelers to cut down on international roaming cost by as much as 75% as compared to U.S. Carriers roaming rates.
Play Architecture, Implementation, Shiny Objects, and a ProposalMike Slinn
ScalaCourses.com has been serving online Scala and Play training material to students for over two years. ScalaCourses.com teaches courses on the same technology stack that the web site runs on. The Cadenza application that powers ScalaCourses.com is a Play Framework 2 application, written in Scala and using Akka, Slick, AWS and Postgres. Some of the architectural features in Cadenza that allow a modest-sized Play application to serve large amounts of multimedia data efficiently is discussed, including technical details of how to work with an immutable domain model that can be modified.
Over the last 2+ years the underlying technology has changed a lot; a brief history of Play Framework will be recounted, and how that impacted Cadenza. The talk concludes with a proposal regarding Play Framework's future.
Fun digressive analysis trying to point in the past and in present days the reasons that lead Brazil to become one of the most expensive countries to live and travel.
RebelFone a telecom company, specializing in managing the international roaming cost for business & leisure travelers. RebelFone has strong tie ups with more than 40 mobile carriers around the world and provide temporary local cell phone hire to American travelers to cut down on international roaming cost by as much as 75% as compared to U.S. Carriers roaming rates.
Play Architecture, Implementation, Shiny Objects, and a ProposalMike Slinn
ScalaCourses.com has been serving online Scala and Play training material to students for over two years. ScalaCourses.com teaches courses on the same technology stack that the web site runs on. The Cadenza application that powers ScalaCourses.com is a Play Framework 2 application, written in Scala and using Akka, Slick, AWS and Postgres. Some of the architectural features in Cadenza that allow a modest-sized Play application to serve large amounts of multimedia data efficiently is discussed, including technical details of how to work with an immutable domain model that can be modified.
Over the last 2+ years the underlying technology has changed a lot; a brief history of Play Framework will be recounted, and how that impacted Cadenza. The talk concludes with a proposal regarding Play Framework's future.
Fun digressive analysis trying to point in the past and in present days the reasons that lead Brazil to become one of the most expensive countries to live and travel.