To our knowledge, this study is the first empirical evaluation of prescription drug use, costs and switching among Dual Eligibles during the transition from Medicaid drug coverage to Medicare Part D drug coverage based on pharmacy dispensing data. Many researchers and policy experts have expressed concerns about how shifting drug coverage may have adversely affected prescription drug use and increased patient out-of-pocket spending while requiring Dual Eligibles to switch their medications.10, 11, 19
However, our evaluation of electronic pharmacy transaction data did not corroborate these concerns. For the Part D covered drugs we evaluated, statins, warfarin, clopidogrel, and PPIs, we found no statistically significant reduction in drug use at the time of the transition to Medicare Part D. We also found trends of reduced out-of-pocket drug spending for these classes, with significant reductions in spending for warfarin in the transition period, and reductions in out-of-pocket expenses for warfarin, clopidogrel and statins over the remainder of 2006. These findings did not extend to benzodiazepines, a class of medications not covered under Medicare Part D, which had a poorly defined plan for coverage after implementation of Part D. Congress’ decision not to include benzodiazepines led to a non-significant trend of decreased use, and patients who used these drugs paid significantly more out-of-pocket.
There was less medication switching stimulated by the implementation of Medicare Part D than had been feared. We did find almost a 3-fold increase in switching in the PPI class immediately upon implementation. However, there is convincing evidence to suggest that all medications in this class have similar efficacy,18, 20–22
and little reason to believe that this would lead to adverse health outcomes. It is likely that this switching caused the reduced spending we found without causing changes in overall utilization. In the other classes we evaluated, switching rates were not significantly different before and after implementation of Part D. The lack of switching after implementation may have been due to State regulations requiring drug plans to assist patients with coverage during the transition period and by the inclusive coverage offered by many plans for these classes of essential medications.
It is interesting to note that there was less change in benzodiazepine use after Part D implementation than might have been expected, especially considering the substantial increase in out-of-pocket spending requirements for these medications (an average cumulative increase of almost $30 per benzodiazepine user). A large and convincing body of evidence indicates a strong relationship between out-of-pocket cost requirements and prescription drug use for many classes of chronic and acute medications used to treat symptomatic and asymptomatic medications alike.16–23
Some of the stability of use of benzodiazepines may have been due to efforts by State Medicaid programs to continue to provide benefits for this class for Dual Eligibles, which allowed some patients to continue to purchase benzodiazepines. Our findings also raise some concern that previous studies examining the relationship between copayments and drug use may not apply to controlled substances. Further evaluation of this relationship, and the relevant cost cutoffs that affect behavior, is warranted for this class of medications.
Our findings are limited by the fact that we evaluated prescription drug activity from a single pharmacy chain. The chain has broad representation in the South, West and Mid-West United States, but has no clients in the Northeast. While we expect that that this chain serves a representative sample of patients, further evaluation in other chains would be useful. We evaluated a limited sample of medication classes which are generally used chronically, and our findings may not be generalized to acute, short-term medications. Use of pharmacy data also has limitations. Some patients may have filled prescriptions at different pharmacies. While we required continuous use indicated by filling at least one prescription in the last quarter of 2004 and the first quarter of 2007 at the study pharmacy, not all prescriptions may have been filled at the chain. However, we would expect that the transition to Part D could have lead some patients to switch their pharmacies, which suggests that drug use may have been even greater after implementation of Part D than our data would indicate, and our findings may be conservative.
We describe results of the net effects of Part D on Dual Eligibles who were Medicaid beneficiaries throughout 2005. Some patients may have chosen to enroll in a Medicare Advantage program at the time of Part D introduction and would have been lost for this analysis. We are not aware of any evidence that there was a significant increase in Medicare Advantage enrollment at the time of Part D auto-enrollment. Similarly, some Dual Eligibles may have chosen to enroll in another private or employer-sponsored source of insurance at the time of Medicare Part D implementation; we do not believe significant migration of this poor, elderly population to private insurance to be likely. Additionally, some of the difficulties associated with the transition may have been delayed several months as states required plans to assist in covering previously covered drugs during the transition period. However, our time-trend analyses evaluated changing drug use, costs and spending over the year after implementation, which should have been enough time to identify meaningful changes in the outcomes of interest.
These findings have important implications for the Medicare Part D program. The Centers for Medicare and Medicaid Services and individual States automatically enrolled dually eligible beneficiaries into Part D programs with a low-income subsidy and required participating Medicare Part D plans to assist in coverage at the point of the transition. Despite concerns that these efforts were insufficient to protect Dual Eligibles during the transition, our findings suggest that these efforts were effective. A pre-specified plan for the transition led to less medication discontinuation and switching than many had expected. However, a less organized transition occurred for the benzodiazepine class, leading to increased costs, suggesting that the careful consideration of transition complexities was instrumental in maintaining adequate coverage for the essential, covered medications we evaluated. Further study of benzodiazepine use after the passage of recent legislation relaxing restrictions on benzodiazepine coverage would be informative.
Our findings also can ease the concerns about the difficulty in transition whenever new prescription drug policies are implemented. Fear about medication discontinuation and adverse health outcomes are often invoked as a reason to obstruct new policy implementation. As we continue to try to identify improved prescription drug coverage designs, we must be willing to implement and test new coverage strategies. Our findings suggest that thoughtful preparation for transition to new coverage designs and use of strategies to ease the burden of transition may serve as an effective means of protecting patients without impeding progress.