Effect of prescription benefit changes on medical care utilization in a Medicare HMO population.
OBJECTIVE
To examine the impact of 2 cost-containment efforts in prescription benefits in successive years that included changes in copayment and coverage levels, expanded generic coverage, and brand name prescription drug limit-of-coverage in a Medicare health maintenance organization (HMO). The benefit changes included moving to a drug benefit with increased total coverage and higher copayments in the first year (1998) and to one with brand name limit-of-coverage and unlimited generic availability in the second year (1999).


METHODS
A repeated-measures analytical design with enrollee follow-up before and after introduction of the 2 policies.


METHODS
A cohort of 2411 older adults continuously enrolled in a Medicare HMO since 1998 was followed up for 1 year pre-post for healthcare service utilization and costs; 259 patients enrolled since 1997 were available to test the effects of the first policy change.


RESULTS
Bivariate and multivariate analyses found a significant decrease of 27% in prescription costs, a 4% decrease in physician visits, and a 6% decrease in total costs associated with the change in prescription benefit in the second year (1999). The policy change in the first year (1998) resulted in a 29% increase in prescription costs and 38% increased total costs for the HMO.


CONCLUSIONS
Introduction of a prescription benefit that included substantial brand name limit-of-coverage and generic drug coverage expansion was associated with significantly reduced prescription costs. In addition, this change did not seem to increase nonprescription-related healthcare service use in the population.
Balkrishnan
R
R
Department of Public Health Sciences, Wake Forest University School of Medicine, Winston-Salem, NC 27157, USA. rbalkris@wfubmc.edu
Byerly
W G
WG
Camacho
F T
FT
Shrestha
A
A
Anderson
R T
RT
D000368:Aged; D015331:Cohort Studies; D017047:Cost Sharing; D006279:Health Maintenance Organizations / Q000191:economics* / Q000706:statistics & numerical data; D006302:Health Services Research; D006299:Health Services for the Aged / Q000191:economics / Q000706:statistics & numerical data*; D006801:Humans; D007356:Insurance, Pharmaceutical Services; D006278:Medicare / Q000706:statistics & numerical data*; D016134:Organizational Policy; D015144:Southeastern United States; D014481:United States