Boyd H. Gilman

Impact of Multitiered Copayments on the Use and Cost of Prescription Drugs Among Medicare Beneficiaries

OBJECTIVES To assess the impact of multitiered copayments on the cost and use of prescription drugs among Medicare beneficiaries. DATA SOURCES Marketscan 2002 Medicare Supplemental and Coordination of Benefits database and Plan Benefit Design database. STUDY DESIGN The study uses cross-sectional variation in copayment structures among firms with a self-insured retiree health plan to measure the impact of number of copayment tiers on total and enrollee drug payments, number of prescriptions filled, and generic substitution. The study also assesses the effect of enrollee cost sharing on the cost and use of prescription medications for the long-term treatment of chronic conditions. DATA COLLECTION METHODS We linked plan enrollment and benefit data with medical and drug claims for 352,760 Medicare beneficiaries with employer-sponsored retiree drug coverage. PRIMARY FINDINGS Medicare beneficiaries in three-tiered plans had 14.3 percent lower total drug expenditures, 14.6 percent fewer prescriptions filled, and 57.6 percent higher out-of-pocket costs than individuals in lower tiered plans. They also had fewer brand name and generic prescriptions filled, and a higher percentage of generics. The estimated price elasticity of demand for prescription drug expenditures was -0.23. Finally, for maintenance medications used for the long-term treatment of chronic conditions, members in three-tiered plans had 11.5 percent fewer prescriptions filled. CONCLUSIONS Higher tiered drug plans reduce overall expenditures and the number of prescriptions purchased by Medicare beneficiaries. Beneficiaries are less responsive to cost sharing incentives when using drugs to treat chronic conditions.

Understanding the variation in costs among HIV primary care providers

Abstract The paper uses a hybrid cost model to identify the determinants of cost variation among programs that offer early intervention services to people living with HIV and AIDS in the US. The model combines the effects of input price and output volume measures from traditional economic cost functions with institutional factors based on program and patient characteristics on the cost of providing primary medical care and support services to people living with HIV and AIDS. The impact of economic factors conforms to conventional theory and reveals the potential for cost savings through greater economies of scale and substitutability of low cost for high cost labor inputs. Similarly, programs that use staff more efficiently and share an affiliation with other organizations exhibit lower costs than more labor intensive and non-affiliated providers. However, patient characteristics are equally important determinants of program spending. Minority patients use services less frequently and generate fewer costs, while patients facing fewer barriers to care, such as those with Medicaid coverage, access services more frequently and incur higher costs. Uninsured patients also generate higher costs, but the higher costs associated with this subgroup more likely stem from a lack of continuity in care and, thus, poorer health status and greater healthcare needs when treatment is sought. Injection drug users require less expensive services, but access services more frequently than other risk groups, while patients with an AIDS diagnosis and those who are co-infected with hepatitis C require more program resources. By separately estimating the economic and institutional determinants of program costs, the study highlights the relative importance of factors that are amendable to internal cost control efforts versus those that reflect the resource needs of local communities.

Association Between Extending CareFirst’s Medical Home Program to Medicare Patients and Quality of Care, Utilization, and Spending

Importance CareFirst, the largest commercial insurer in the mid-Atlantic Region of the United States, runs a medical home program focusing on financial incentives for primary care practices and care coordination for high-risk patients. From 2013 to 2015, CareFirst extended the program to Medicare fee-for-service (FFS) beneficiaries in participating practices. If the model extension improved quality while reducing spending, the Centers for Medicare and Medicaid Services could expand the program to Medicare beneficiaries broadly. Objective To test whether extending CareFirst’s program to Medicare FFS patients improves care processes and reduces hospitalizations, emergency department visits, and spending. Design, Setting, and Participants This difference-in-differences analysis compared outcomes for roughly 35 000 Medicare FFS patients attributed to 52 intervention practices (grouped by CareFirst into 14 “medical panels”) to outcomes for 69 000 Medicare patients attributed to 42 matched comparison panels during a 1-year baseline period and 2.5-year intervention at Maryland primary care practices. Main Outcomes and Measures Hospitalizations (all-cause and ambulatory-care sensitive), emergency department visits, Medicare Part A and B spending, and 3 quality-of-care process measures: ambulatory care within 14 days of a hospital stay, cholesterol testing for those with ischemic vascular disease, and a composite measure for those with diabetes. Interventions CareFirst hired nurses who worked with patients’ usual primary care practitioners to coordinate care for 3656 high-risk Medicare patients. CareFirst paid panels rewards for meeting cost and quality targets for their Medicare patients and advised panels on how to meet these targets based on analyses of claims data. Results On average, each of the 14 intervention panels had 9.3 primary care practitioners and was attributed 2202 Medicare FFS patients in the baseline period. The panels’ attributed Medicare patients were, on average, 73.8 years old, 59.2% female, and 85.1% white. The extension of CareFirst’s program to Medicare patients was not statistically associated with improvements in any outcomes, either for the full Medicare population or for a high-risk subgroup in which impacts were expected to be largest. For the full population, the difference-in-differences estimates were 1.4 hospitalizations per 1000 patients per quarter (P = .54; 90% CI, −2.1 to 5.0), −2.5 outpatient ED visits per 1000 patients per quarter (P = .26; 90% CI, −6.2 to 1.1), and −

Impact of Critical Access Hospital Conversion on Beneficiary Liability

1 per patient per month in Medicare Part A and B spending (P = .98; 90% CI, −

Consumer response to dual incentives under multitiered prescription drug formularies

40 to

Impact of Influenza Immunization on Medical Expenditures Among Medicare Elderly, 1999–2003

39). For hospitalizations and Medicare spending, the 90% CIs did not span CareFirsts expected impacts. Hospitalizations for the intervention group declined by 10% from baseline year to the final 18 months of the intervention, but this was matched by similar declines in the comparison group. Conclusion and Relevance The extension of CareFirst’s program to Medicare did not measurably improve quality-of-care processes or reduce service use or spending for Medicare patients. Further program refinement and testing would be needed to support scaling the program more broadly to Medicare patients.

The Impact of a Health Information Technology–Focused Patient-centered Medical Neighborhood Program Among Medicare Beneficiaries in Primary Care Practices: The Effect on Patient Outcomes and Spending

CONTEXT While the Medicare Critical Access Hospital (CAH) program has improved the financial viability of small rural hospitals and enhanced access to care in rural communities, the program puts beneficiaries at risk for paying a larger share of the cost of services covered under the Medicare part B benefit. PURPOSE This paper examines the impact of hospital conversion to CAH status on beneficiary out-of-pocket coinsurance payments for hospital outpatient services. METHODS The study is based on a retrospective observational design using administrative data from Medicare hospital cost reports and fee-for-service beneficiary claims from 1999 to 2003. The study compares changes in beneficiary co-payments before versus after CAH conversion with payment trends among small rural non-converting hospitals over the same period. FINDINGS Conversion to CAH status is associated with an increase in beneficiary coinsurance payments per outpatient visit of

Evaluation of Health Care Innovation Awards (HCIA): Primary Care Redesign Programs

17.19, equivalent to 34% of the sample average. However, CAH designation had no significant effect on the share of outpatient costs paid by the beneficiary. Most of the increase in beneficiary liability associated with conversion is attributable to the provision of more services per outpatient visit. CONCLUSIONS While this and other studies show that conversion to CAH status results in more intensive outpatient care, CAH conversion does not appear to inadvertently create financial barriers to accessing ambulatory services in remote rural communities by forcing beneficiaries to pay a higher share of their Medicare part B costs.