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April 23, 2014

Study Shows Medicare Part D Program Tied to Reduced Hospital Visits

Researchers at the University of Illinois and the Johns Hopkins University found that Medicare Part D's prescription drug program has reduced hospital visits among seniors. The study compared national records from before and after 2006, when Medicare Part D kicked in. The researchers found that drug coverage was associated with an 8 percent drop in hospital admissions and nearly as much in hospital-cost savings, an amount they calculate to be $1.5 billion a year.

Kaiser Health News reports that the genesis of the law began eleven years ago when Bob Bennett, then a republican senator from Utah, proposed that Medicare coverage should include prescription drugs:

"Medicare says if you go to the hospital and run up a bill of however many tens of thousands of dollars to stay that many days, we will pay for it," he said in June 2003. "But if you take the pill that makes the hospital visit unnecessary, we will not. That clearly doesn't make sense."

The study, authored by Robert Kaestner, Cuiping Long, And G. Caleb Alexander, found that Part D coverage brought a very high drop in admission rates for certain conditions in particular: "down 20 percent for dehydration; down 32 percent for chronic obstructive pulmonary disease; down 18 percent for congestive heart failure; down 13 percent for coronary atherosclerosis."

The authors did not find any difference in death rates between the seniors who had access to drugs under Part D and those who didn't. "It's somewhat surprising that we didn't see a mortality effect, given that we did see decreases in hospitalization," Kaestner, an economist at the University of Illinois at Chicago, said in an interview (Kaiser Health News).

But the researchers noted that they looked only at deaths at the time. Kaetner posited that perhaps drug coverage has a cumulative effect that wouldn't show up in mortality statistics until later. This makes sense. The study examined data after 2006. The long-term effects of prescription coverage are likely not evident in the 8 year window, especially if drugs are prescribed for long term illnesses.

Kaiser Health News states that "Part D's cost to taxpayers still far exceeds the savings it generates in fewer hospital visits." But Kaestner noted that "the $1.5 billion in annual hospital savings associated with Part D coverage effectively reduces the expense of that particular program by 2.2 percent."


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