Rx Minute: Offsets in Heart Failure Treatment & Seniors Selecting Lower Costs Part D Plans

Increased Adherence to HF Medicines Associated with Medicare Cost Offsets

November 2012

Last month, a study published in the American Journal of Managed Care found a significant association between modest increases in adherence to heart failure (HF) medications and reduced medical spending among Medicare beneficiaries.[1]

The authors used data from a nationally-representative survey of the Medicare population linked with administrative enrollment records and Part A and B claims from the Centers for Medicare and Medicaid Services (CMS). The study sample consisted of 2,204 beneficiaries who were identified based on a diagnosis of HF.  Baseline use of four guideline-recommended therapies, including angiotensin-converting enzyme (ACE)-inhibitors/angiotensin receptor blocker (ARBs), beta-blockers, diuretics, and cardiac glycosides was examined.

Results indicated that almost 17% of beneficiaries diagnosed with HF had no evidence of treatment for any the medication classes. Less than 60% of beneficiaries received an ACE-inhibitor or ARB and less than 40% received a beta-blocker.

Findings also demonstrated that modest increases in adherence to HF medication regimens were associated with reductions in Medicare Part A and B spending.  Specifically, a 10% increase in daily pill counts for both beta-blockers and cardiac glycosides was associated with reductions in cumulative 3-year Medicare spending in the range of $510 to $561 and $750 to $923, respectively.  

Finally, the authors calculated the mean cost per 30-day prescription fill for each medication class, which ranged from $10.85 to $41.19. Findings suggest that the cost savings associated with improved adherence may generally exceed the costs of treatment.

Seniors Adapting to Select Medicare Part D Plans to Lower Costs

A recent study published in the American Economic Review examined plan switching and the amount of spending among a sample of Medicare Part D beneficiaries from 2006 to 2007 and found that many seniors often reduce total medication spending by changing plans.[2]

The authors analyzed data from the Centers for Medicare & Medicaid Services, CVS Caremark and other sources for 71,399 non-LIS (Low Income Subsidy) beneficiaries in stand-alone Part D prescription drug plans that were provided or administered by CVS Caremark in both 2006 and 2007. Using this data, the authors determined how out-of-pocket drug costs and plan premiums varied between beneficiaries’ chosen plans compared to each individual’s cheapest plan alternative for both years.

The study has several key findings. First, despite claims that Part D offers too many plan choices and thus creates confusion for consumers, this study found that the difference in spending between the chosen plan and the cheapest plan decreased significantly from 2006 to 2007 for a large portion (81%) of the sample. Additionally, the greatest reductions in spending were achieved by those who spent the most which was due, in part, to beneficiaries’ choices. This suggests that Part D consumers are learning from their experience and making more informed decisions as a result.

The evidence also suggests that Part D consumers are considering both past performance and incorporating information about future changes to their current plan in the decision process, as demonstrated by the fact that beneficiaries were more likely to switch plans if their current plan’s costs were set to increase.

Finally, the study found that even beneficiaries with a greater prevalence of cognitive limitations, such as those 85 years or older or taking medications for Alzheimer’s disease, still experienced average reductions in their calculated spending difference from 2006 to 2007. This suggests that this subpopulation may have had assistance with their decision making, through children, other relatives, or medical personnel, and that the Part D market evolved to provide additional information to consumers to help them make choices.

According to the authors, these findings “add to the accumulating evidence that Part D represents a successful implementation of a market-based approach to deliver a large-scale entitlement program.”

[1] Lopert R, Shoemaker JS, Davidoff A, Shaffer T, Abdulhalim A, Lloyd J, Stuart B. “Medication Adherence and Medicare Expenditure among Beneficiaries with Heart Failure”. Am J Manag Care. 2012, 18(9)556-563.

[2] Ketcham J, Lucarelli C, Miravete E, Roebuck MC, “Sinking, Swimming, or Learning to Swim in Medicare Part D”. American Economic Review. 2012, 102(6): 2639-73.

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