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Purpose: Last year, the State of Massachusetts increased the co-payment for prescription drugs by $1.50 for Medicaid beneficiaries. We sought to determine the likely health outcomes and cost shifts attributable to this co-payment increase using the example of inhaled corticosteroids (ICS) use among adult asthmatic Medicaid beneficiaries.
Methods: We compared the predicted costs and health outcomes projected over a 5-year time horizon with and without the increase in co-payment from four different perspectives (State government, hospitals, pharmacies and patients). We estimated that 10.8% patients on ICS therapy would not refill their prescriptions, based on the literature and inflation adjustment using the consumer price index. Predicted costs and health outcomes were based on a previously developed asthma model for evaluating ICS therapy.
Results: With an increased co-payment from 50¢ to $2, our analysis predicted that the State government would save on average $124 per asthmatic patient over 5 years, whereas hospitals would lose $18 per patient, pharmacies would lose $39 per patient, and patients would pay an additional $71 each over five years. We also projected an additional 87 urgent-care visits, 15 emergency room (ER) visits, and 7 hospitalizations over 5 years per 1,000 asthmatic patients with the co-payment increase. Projected government savings were a result of lower reimbursement to the pharmacies with decreased drug utilization and a decreased pharmacy reimbursement rate. Although we predicted that the State government would incur a cost increase associated with the increased number of acute exacerbations, this was more than offset by the savings from decreased pharmacy reimbursement. Financial losses attributed to hospitals were a result of the increased number of acute exacerbations, and the fact that the State government reimbursement rate is lower than the actual cost to hospitals. Pharmacies made less profit after the increase in co-payment because of the predicted decrease in the number of Medicaid patients who refill their prescription drugs.
Conclusion: In the example of ICS in asthmatic patients, an increase in prescription drug co-payment shifts the financial burden from the State government to the hospitals, pharmacies, and Medicaid patients. In addition, asthmatic patients will experience additional acute exacerbations that result in increased number of ER visits, urgent-care visits, and hospitalizations.
See more of Oral Concurrent Session B - Health Services Research
See more of The 26th Annual Meeting of the Society for Medical Decision Making (October 17-20, 2004)