Bruce Stuart

Insurance Choice and the Demand for Prescription Drugs

This paper analyzes the influence that health insurance has on elderly individuals decisions to use prescription drugs. We create a data base from a survey of health insurance and medicine use in the Commonwealth of Pennsylvania conducted during the summer of 1990 by researchers affiliated with the Medicine, Health, and Aging Project at Penn State [23]. Pennsylvania is particularly interesting in this regard because of the generous provisions of the PACE (Pharmaceutical Assistance Contract for the Elderly) program, which pays for all outpatient prescriptions for low income elderly, less a

Reimbursement and access to physicians' services under Medicaid

4.00 copayment per 30 days dosage. Our analytic framework is dictated by three considerations. First, we wish to produce quantitative estimates of insurance effects over a wide range of prescription benefit provisions. Most prior research on prescription drug demand has focused on the effects of relatively minor alterations in insurance benefits such as the addition of a

Persistence in the use of pharmaceuticals by the elderly. Evidence from annual claims.

.50 or

Coverage and use of prescription drugs in nursing homes: implications for the medicare modernization act.

1.00 copayment. Findings from these studies are not generalizable to situations in which individuals gain (or lose) prescription coverage or face other major changes in prescription benefits. Second, we wish to address the question of whether prescription demand is driven more by the own-price effects of drug coverage or by the cross-price effects of Medicare supplementation for ambulatory physician visits. Outpatient physician visits are covered under Medicare Part B, but are subject to deductible and coinsurance provisions which may reduce their use. Since physi

Prescription Drug Coverage and Medical Indigence among the Elderly

Several recent studies have shown that physician participation in state Medicaid programs is directly related to the generosity of their reimbursement levels. The implication is that when states reduce fees, Medicaid eligibles suffer because their access to physicians services is thereby limited. The results presented in this paper do not support this implication. Multivariate analyses of utilization and site-of-visit patterns among non-elderly Medicaid eligibles indicate that stringent physician reimbursement practices do not impede access to ambulatory care when all sites at which a doctor may be seen are considered.

Medicaid Reform: Programming Solutions to the Equity Problem

An analysis of four-and-a-half years of claims data from the Pennsylvania Pharmaceutical Assistance Contract for the Elderly (PACE) program shows a pronounced degree of persistence in annual prescription drug expense by individual enrollees from year to year, particularly among the heaviest users. There is evidence of eventual regression to the mean, but it takes a substantial length of time--far longer than observed for other types of health care used by the elderly. The study findings raise questions about the insurability of drug expenses in non-group Medigap policies.

On taking chances with the law of large numbers.

Background:The Medicare Modernization Act will affect drug coverage for most nursing home residents in the United States. Understanding the impact of the MMA requires knowledge of the process by which drugs are prescribed to residents and the effect of coverage on medication use. Objectives:We sought to characterize sources of drug coverage for Medicare beneficiaries residing in nursing facilities and to provide empirical estimates of the relationship between coverage and use. Research Design:We used bivariate and multivariate analyses to assess the relationship between coverage and drug use in a sample of nursing home residents drawn from the 2001 Medicare Current Beneficiary Survey augmented with monthly institutional drug administration data. Subjects:A total of 789 residents with a mean nursing home stay of 8.7 months in 2001 were studied. Measures:We measured the proportions of residents with drug coverage from Medicaid, other sources, or none at all, and mean number of unique prescription drugs administered per resident per month by source of coverage. Results:We found that 20% of the sample had no drug coverage, 56% had drug coverage under Medicaid, 9% had coverage from other sources, and for 15% drug coverage status could not be determined. There were no statistically significant differences in drug utilization by drug coverage status. Conclusions:When drug coverage becomes a Medicare benefit in 2006, it is unlikely to spur additional medication use among nursing home residents but may redirect utilization as a result of health plan formulary restrictions.

Dynamics In Drug Coverage Of Medicare Beneficiaries: Finders, Losers, Switchers

When Medicare extends catastrophic coverage to outpatient prescription drugs in 1991, the program will benefit an estimated 15% to 25% of the aged population. For some of these individuals Medicare coverage will mean the difference between economic self-sufficiency and impoverishment due to high medical bills. This article provides empirical estimates of the relationship between third-party coverage of outpatient pharmaceuticals and the risk of medical indigence based on the experience in Pennsylvania following enactment of that states Pharmaceutical Assistance Contract for the Elderly (PACE), a lottery-financed drug benefit program that currently enrolls nearly half a million residents age 65 and older. The study provides data on the distribution of billed charges for outpatient drugs by income class for PACE enrollees and then uses a time series analysis to estimate the impact of PACE implementation (July 1984) on monthly changes in Medicaid enrollments and expenditures by category of elderly Medicaid recipient over the period July 1981 through June 1987. Study findings are discussed in the context of the forthcoming Medicare drug benefit.

Estimating the effects of prescription drug coverage for Medicare beneficiaries.

This paper demonstrates the application of a mathematical programming model to a longstanding policy issue in the Medicaid reform debate: the redistribution of program funds necessary to achieve equity in eligibility and benefit coverage across states. The model is used to estimate the potential degree of equity achievable in the current Medicaid system given various budgetary and political constraints. Two model simulations, based on a 1979 data set for aged recipients of Supplementary Security Income, are presented. The results indicate that half or more of the interstate differences in spending for this population group are due to actuarial and efficiency factors rather than deviations from equity potential. The implications of eliminating the remaining differences are discussed.

Riding The Rollercoaster: The Ups And Downs In Out-Of-Pocket Spending Under The Standard Medicare Drug Benefit

An increasing number of major purchasers of health services now consider capitation to be the preferred method of payment for individual physicians and small group practices. This paper is a primer on capitation payment plans for small risk pools. It describes some of the basic economic issues that purchasers and providers face when negotiating small-panel capitation contracts, including sources of risk, techniques of risk reduction and risk sharing. An empirical section analyses the experience of a plan that took a chance with the law (law of large numbers) and lost.