Free Essay on Medicare:
In its endeavor to find a balance between service quality (in terms of width of coverage) and economic feasibility, Medicare first offered prescription drugs cover in its 2006 Part D plan. This plan offers 75% coverage for drugs up to an annual total drug spend (TDS) threshold of $2250. In addition to paying the remaining 25%, Part D participants (who must be, of course, eligible for Parts A and B) are also required to pay an annual deductable of $250. However, annual TDS that exceeds $2250 is not covered, unless it exceeds $5100 (where coverage goes up again to 95%). This no coverage gap, also called the “doughnut hole,” stands in the heart of this paper.
A recent exploratory, hypothesis-generating study by Cronk et al. (2008) sheds light on the way patients may manage their drugs expenditure once they reached the “doughnut hole.” Based on few previous findings, the authors assume and show supporting evidences to the assumption that without coverage (i.e. with a TDS of $2250-5100), patients may be three times more likely to engage in cost-lowering strategies, which may not be coherent with medical regimens. This paper provides a critical analysis of the study, its methods and its results, and discusses the study’s implications for the contemporary US healthcare system.
2 An Analysis of the Study by Cronk et al. (2008)
In order to lower the expenditure on prescription drugs, patients may engage in one or more of the following strategies:
Obtaining medication samples from physicians
Taking fewer medications than prescribed
Stopping the use of medications
Switching to a different medication
Buying medications outside the United States and/or using a mail-order pharmacy
Taking someone else’s medication
The rationale behind this study (and other studies on this construct) is threefold. First, the extent of using cost-lowering strategies among patients at the applicable gap should be considered at the policy making level, because failure to follow medical regiments may bring about additional costs to Medicare, especially when deterioration of health conditions causes increased hospitalization costs. Second, health professionals should pay more careful attention to the behavior of patients at this group, in particular patients within this group, whose characteristics indicate higher probability of engaging in such behavior (see below). Third, if patients are willing to take considerable health risks in order to avoid costs, the system should try to find customized solutions to such patients, by finding cheaper alternatives such as using more generic drugs and referring them to assistance organizations.
The study focused on participants in two Medicare Part D schemes offered by Kaiser Permanente Colorado (KPCO). Participants in the KPCO Direct Pay program comprised the study group of this research, while the control group was based on participants in the Retiree Drug Subsidy program, which lacks any thresholds. Not surprisingly, the authors found that patients in the study group were not only three times more likely to engage in cost-lowering strategies, but also had to forgo necessities and to borrow money in order to pay for the drugs. Interestingly, however, a fit of data to the model statistical analysis suggests that within the study group, there is a greater risk of taking a cost-lowering strategy among patients who are young, have lower household income, are better educated and have poorer health status. Notwithstanding the other parameters, users of second-generation antipsychotic drugs are less likely to give up on their medications, perhaps due to the immediate effect on everyday life when not taking the drug.
Although Medicare Part D coverage is an important step towards a more just medical coverage for the elderly and the severely ill, there are more than a few questions marks surrounding the program. Notwithstanding its clear benefits for both the patients and Medicare, Part D is somewhat complicated and may fail to reach its primary goal, namely improving the medical care provided to the beneficiaries while retaining financial stability. One possible cause to this prospective failure is patients’ tendency towards cost-lowering strategies, which may not only lead to further health deteriorations, but also to pose a challenge to healthcare professionals, whose younger, better educated patients’ “creativity” may complicate clinical work.
The study by Cronk et al. (2008) does not lack limitations. The researchers’ use of mail questionnaires and their dependency on voluntary reporting resulted in higher response rates among the study group (most probably since they are more attentive to the construct). Moreover, the possibility of reporting errors and lies cannot be excluded. Further studies are required to reassure the findings and to calculate the exact impact of Part D’s no coverage gap on Medicare total expenditure.
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