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APHA Scientific Session and Event Listing

Recorded presentation

Christine E. Bishop, PhD¹, Daniel Gilden, MS², Melissa A. Morley, PhD³, Joanna Kubisiak, MS², and Cindy Parks Thomas, PhD¹. (1) Schneider Institute for Health Policy Heller School, Brandeis University, Mailstop 035, 415 South Street, Waltham, MA 02254-9110, 781-736-3942, bishop@brandeis.edu, (2) JEN Associates, 5 Bigelow St., Cambridge, MA 02139, (3) RTI International, 411 Waverly Oaks Road, Suite 330, Waltham, MA 02452

Some prescription drug insurance plans are designed to fully cover a capped amount of consumers' drug expenses, but require higher or full payment for drug purchases above the cap. Economic theory suggests that consumers make drug purchase decisions based on the price they expect to face at the end of the insured year, which for high users may be substantially higher than initial price in capped plans. This research investigates the impact of a “soft” cap (a dollar ceiling on expenditures beyond which enrollees pay a substantially higher copayment) on elders' use of prescription drugs.Data on enrollees' monthly expenditures, prescriptions filled (brand and generic), and income was supplied by two state pharmacy assistance programs serving near-poor elders, one with a “soft” cap of $1750. Elders were eligible for the program if income was less than twice the poverty level and aged 65 or older. The data source is unusual: because the program continued to cover drugs for enrollees who hit the spending cap, albeit with higher enrollee cost sharing, we are able to observe drug purchases beyond the cap. Data on individual health status was derived from Medicare claims and enrollment data. A random effects model applied to repeated measures (monthly expenditures and proportion generic prescriptions filled) supported estimation of the effect on utilization for months in which an enrollee in the capped program met and then exceeded the benefit cap. Predicted end-of-year price (dependent on whether annual spending would exceed the cap) was modeled based on enrollees' total spending to date and health conditions. Higher income elders within this near-poor population tended to use more drugs (given health and other characteristics) and appeared better able to maintain prescription drug use when their copayments rose after hitting the spending limit. Utilization patterns of enrollees in the comparison state program further support the conclusion that the observed drop in use for enrollees facing the higher copayment above the cap is due to insurance plan design. Subgroup analyses allow comparisons of effects for enrollees with six chronic health conditions with high drug use, including diabetes, cardiovascular disease, and arthritis. The hypothesis from economic theory that consumer decisions respond to predicted end-year rather than current price was not supported for this near-poor population. The findings have implications for the design of prescription drug insurance programs that can support access to needed medication for near-poor elders as well as cost containment.

Learning Objectives: At the conclusion of the session, the participant will be able to

• Identify factors affecting prescription drug utilization for near-poor elders within an economic model of consumer choice
• Assess impacts of a spending cap as a provision of prescription drug insurance
• Discuss impact of copayments on prescription drug utilization for near-poor elders with specific chronic conditions

Keywords: Drug Use Variation, Economic Analysis

Presenting author's disclosure statement:

Any relevant financial relationships? No

Recorded presentation