Friday, July 3, 2009

Medicare Part D increases spending on prescription drugs

Is that what you were expecting? In a recent article in the New England Journal of Medicine (NEJM), we see that the authors conclude that "Enrollment in Medicare Part D was associated with increased spending on prescription drugs. Groups that had no or minimal drug coverage before the implementation of Part D had reductions in other medical spending that approximately offset the increased spending on drugs, but medical spending increased in the group that had more generous previous coverage."

Between December 2005 and December 2007, as compared with the increase in the no-cap group, the increase in total monthly drug spending was $41 higher among enrollees with no previous drug coverage, $27 higher among those with a previous $150 quarterly cap, and $13 higher among those with a previous $350 cap. I wonder if the government knew this was going to happen.

The article is titled, "The Effect of Medicare Part D on Drug and Medical Spending." Click here to access the abstract. The authors on this study included: Yuting Zhang, Ph.D., Julie M. Donohue, Ph.D., Judith R. Lave, Ph.D., Gerald O'Donnell, M.S., and Joseph P. Newhouse, Ph.D.

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