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It's Time to Bail Out Seniors Trapped in the Medicare Donut Hole!

      Medicare D, which became effective in January of 2006, was a major step forward in providing prescription drug coverage to one segment of our population: those age 65 and older. As of 2009, 90% of all seniors (Medicare beneficiaries) had signed up for Medicare D, which is voluntary, or had other insurance coverage for prescription drugs.
      Kaiser Family Foundation, the Medicare prescription drug benefit fact sheet, March, 2009.
      The Medicare population accounts for one third of all prescription drug use in the US.
      • Steinberg E.P.
      • Guiterrez B.
      • Momani A.
      • et al.
      Beyond survey data: a claims-based analysis of drug use and spending by the elderly.
      The vast majority (87%) of seniors have at least one chronic condition that requires life-long medication, and more than 45% have 3 or more chronic conditions.
      • Paez K.A.
      • Zhao L.
      • Hwang W.
      Rising out-of-pocket spending for chronic conditions: A ten-year trend.
      The average number of prescription drugs for seniors with one of the commonest chronic conditions, congestive heart failure, was 7.5 with an annual cost of $3823 in 2001.
      • Masoudi F.A.
      • Baillie C.A.
      • Wang Y.
      • et al.
      The complexity and cost of drug regimens of older patients hospitalized with heart failure in the United States, 1998-2001.
      The health of our Medicare population is dependent on their being able to afford prescription drugs.
      Unfortunately, 2 features of the Medicare D legislation jeopardize the ability of seniors to afford the drugs they require.
      • Dalen J.E.
      • Hartz D.J.
      Medicare prescription drug coverage: A very long wait for a very modest benefit.
      The legislation forbids Medicare from negotiating drug prices with drug manufacturers. Unlike the Department of Defense, the Veterans Administration, and Medicaid, which are able to negotiate discounts of 30 to 50%,
      • Iglehart J.K.
      Medicare and drug pricing.
      Medicare is forced to pay the manufacturers' asking price. As a result, Medicare and Medicare beneficiaries pay more for prescription drugs than the citizens of any other country. Medicare pays 30% more for prescription drugs than Medicaid pays. In 2 years (2006 and 2007) Medicare paid $3.7 billion more than Medicaid would have paid for the same prescription drugs.
      House committee on oversight and government reform, July, 2008.
      The second feature of the legislation that jeopardizes the ability of seniors to afford prescription drugs is the infamous “donut hole.”
      • Altman D.E.
      The new Medicare prescription-drug legislation.
      Once a deductible of $250 has been paid by the senior, Medicare pays 75% of the cost of drugs and the senior pays 25% until the total amount paid by Medicare and the patient reaches $2250. At that point, the senior pays 100% out of pocket until the total amount paid by the patient and Medicare reaches a catastrophic limit of $5100. After that point has been reached, the senior is freed from the donut hole and Medicare pays 95% of further prescription costs. In one study,
      • Schneeweiss S.
      • Patrick A.R.
      • Pedan A.
      • et al.
      The effect of Medicare Part D coverage on drug use and cost sharing among seniors without prior drug benefits.
      only 3%, and in another study,
      • Zhang Y.
      • Donohue J.M.
      • Newhouse J.P.
      • et al.
      The effects of the coverage gap on drug spending: a closer look at Medicare Part D.
      only 4% of seniors falling into the donut hole emerged to receive catastrophic coverage.
      Zhang et al,
      • Zhang Y.
      • Donohue J.M.
      • Newhouse J.P.
      • et al.
      The effects of the coverage gap on drug spending: a closer look at Medicare Part D.
      reported that 25% of seniors reached the donut hole in 2006. The proportion reaching the hole increased as the number of chronic conditions increased. A third of patients with both hypertension and diabetes, and more than 60% of those who also had hyperlipidemia and congestive heart failure fell into the hole.
      • Zhang Y.
      • Donohue J.M.
      • Newhouse J.P.
      • et al.
      The effects of the coverage gap on drug spending: a closer look at Medicare Part D.
      The Kaiser Family Foundation reported that 26% of seniors landed in the donut hole in 2007.
      Kaiser Family Foundation, The Medicare Part D coverage gap: Costs and consequences in 2007. August 2008.
      While in the donut hole, the senior must pay the total cost of additional drugs out of pocket. There are multiple studies examining what happens when out-of-pocket expenses for drugs increase. Many patients resort to stinting: not filling prescriptions, not refilling prescriptions, or decreasing the prescribed dose because of the cost. One study found that 15% of all Americans under age 65, and 30% of those with low income, failed to fill a prescription because of cost in 2007.
      Center for Studying Health System Change, More nonelderly Americans dace problems affording prescription drugs January, 2009.
      In the Kaiser report,
      Kaiser Family Foundation, The Medicare Part D coverage gap: Costs and consequences in 2007. August 2008.
      15% of seniors stopped taking their medications when they were in the hole. Zhang et al,
      • Zhang Y.
      • Donohue J.M.
      • Newhouse J.P.
      • et al.
      The effects of the coverage gap on drug spending: a closer look at Medicare Part D.
      reported a 14% reduction in medication use while in the hole. Schneeweiss et al,
      • Schneeweiss S.
      • Patrick A.R.
      • Pedan A.
      • et al.
      The effect of Medicare Part D coverage on drug use and cost sharing among seniors without prior drug benefits.
      reported that when seniors fell into the donut hole they decreased the use of such essential medications as warfarin, statins, and clopidogril, each of which has been shown to decrease the incidence of myocardial infarction and/or stroke.
      The seniors most likely to stop taking their medications when out-of-pocket expenses increase are those with the lowest income,
      Center for Studying Health System Change, More nonelderly Americans dace problems affording prescription drugs January, 2009.
      • Rector T.S.
      • Venus P.J.
      Do drug benefits help Medicare beneficiaries afford prescribed drugs?.
      those with the largest out-of-pocket expenses,
      • Rector T.S.
      • Venus P.J.
      Do drug benefits help Medicare beneficiaries afford prescribed drugs?.
      and those with multiple chronic conditions requiring prescription drugs.
      Center for Studying Health System Change, More nonelderly Americans dace problems affording prescription drugs January, 2009.
      In one Medicare HMO, a total of 30% of participants stinted.
      • Rector T.S.
      • Venus P.J.
      Do drug benefits help Medicare beneficiaries afford prescribed drugs?.
      Of those with an annual income >$48,000, 17% stinted compared to 38% of those with an annual income less than $12,000. When total out-of-pocket expenses were less than $50/month, 16% stinted, but when out-of-pocket expenses exceeded $300/month, 47% stinted.
      • Rector T.S.
      • Venus P.J.
      Do drug benefits help Medicare beneficiaries afford prescribed drugs?.
      Many studies have shown that stinting on medication leads to adverse health outcomes for seniors and increases Medicare expenses.
      • Rector T.S.
      • Venus P.J.
      Do drug benefits help Medicare beneficiaries afford prescribed drugs?.
      • Christian-Herman J.
      • Emons M.
      • George D.
      Effects of generic-only drug coverage in a Medicare HMO.
      • Hsu J.
      • Price M.
      • Huang J.
      Unintended consequences of caps on Medicare drug benefits.
      • Tamblyn R.
      • Laprise R.
      • Hanley J.A.
      • et al.
      Adverse events associated with prescription drug cost-sharing among poor and elderly persons.
      In one US HMO a decision was made to only cover generic drugs. As a result HMO drug costs decreased and patient out-of-pocket drug expenses increased. However, the number of hospital days increased and no money was saved.
      • Christian-Herman J.
      • Emons M.
      • George D.
      Effects of generic-only drug coverage in a Medicare HMO.
      Hsu compared Medicare HMO patients with a prescription cap of $1000/year to HMO patients without a cap.
      • Hsu J.
      • Price M.
      • Huang J.
      Unintended consequences of caps on Medicare drug benefits.
      Those with a cap had poorer adherence to medications because of stinting. The result was poorer control of blood pressure, lipids, and diabetes. This led to more emergency room visits and more non-elective hospital admissions.
      Another example of what happens when out-of-pocket expenses for medications increase was reported in Quebec.
      • Tamblyn R.
      • Laprise R.
      • Hanley J.A.
      • et al.
      Adverse events associated with prescription drug cost-sharing among poor and elderly persons.
      Prior to 1996, prescription drugs were free for the elderly if poor and $2 per prescription if not poor. After 1996, there was a co-pay of $25 per prescription. After the new law 9% of seniors discontinued essential drugs. In this group emergency room visits increased by 43%, and serious adverse events (death or hospital admission) increased by 117%.
      • Tamblyn R.
      • Laprise R.
      • Hanley J.A.
      • et al.
      Adverse events associated with prescription drug cost-sharing among poor and elderly persons.
      The evidence is quite clear. As out-of-pocket expenses for prescription drugs increase, non-compliance because of medication stinting increases. Health outcomes worsen, with resultant increased emergency room visits and hospital admissions. Restricting prescription drug coverage does not save Medicare money, it increases Medicare expenses!
      Prescription drug costs will continue to increase for seniors. The number of Medicare beneficiaries with chronic conditions will continue to increase, and new therapy guidelines as with hypertension
      • Chobanian A.V.
      • Bakris G.L.
      • Black H.R.
      • et al.
      The seventh report of the Joint National Committee on Prevention, Detection, Evaluation, and Treatment of High Blood Pressure.
      and hyperlipidemia
      • Grundy S.M.
      • Cleeman J.I.
      • Merz C.N.
      • et al.
      Implications of recent clinical trials for the National Cholesterol Education Program Adult Treatment Panel III guidelines.
      will increase the number requiring chronic medications. New brand name drugs, and direct-to-consumer advertising will increase the number of drugs prescribed, and we can expect continued escalation of the price of many existing drugs.
      • Moeller J.F.
      • Miller G.E.
      • Banthin J.S.
      Looking inside the nation's medicine cabinet: Trends in outpatient drug spending by Medicare beneficiaries, 1997 and 2001.
      Anderson et al have suggested a cost effective way to eliminate the donut hole.
      • Anderson G.F.
      • Shea D.G.
      • Hussey P.S.
      • et al.
      Doughnut holes and price controls.
      If Medicare was allowed to negotiate drug prices with the manufacturers, the cost savings would be more than enough to eliminate the donut hole. Elimination of the donut hole would lead to fewer emergency room visits, fewer hospital admissions, and a reduction in Medicare expenses. More important than the monetary savings, elimination of the donut hole would improve the health of our senior population.

      References

      1. Kaiser Family Foundation, the Medicare prescription drug benefit fact sheet, March, 2009.
        (Last accessed March 15, 2009.)
        • Steinberg E.P.
        • Guiterrez B.
        • Momani A.
        • et al.
        Beyond survey data: a claims-based analysis of drug use and spending by the elderly.
        Health Affairs. 2000; 19: 198-211
        • Paez K.A.
        • Zhao L.
        • Hwang W.
        Rising out-of-pocket spending for chronic conditions: A ten-year trend.
        Health Affairs. 2009; 28: 15-25
        • Masoudi F.A.
        • Baillie C.A.
        • Wang Y.
        • et al.
        The complexity and cost of drug regimens of older patients hospitalized with heart failure in the United States, 1998-2001.
        Arch Intern Med. 2005; 165: 2069-2076
        • Dalen J.E.
        • Hartz D.J.
        Medicare prescription drug coverage: A very long wait for a very modest benefit.
        Am J Med. 2005; 118: 325-329
        • Iglehart J.K.
        Medicare and drug pricing.
        N Engl J Med. 2003; 348: 1590-1597
      2. House committee on oversight and government reform, July, 2008.
        (Last accessed April 23, 2009.)
        • Altman D.E.
        The new Medicare prescription-drug legislation.
        N Engl J Med. 2004; 350: 9-10
        • Schneeweiss S.
        • Patrick A.R.
        • Pedan A.
        • et al.
        The effect of Medicare Part D coverage on drug use and cost sharing among seniors without prior drug benefits.
        Health Affairs. 2009; 28: w305-w316
        • Zhang Y.
        • Donohue J.M.
        • Newhouse J.P.
        • et al.
        The effects of the coverage gap on drug spending: a closer look at Medicare Part D.
        Health Affairs. 2009; 28: w317-w325
      3. Kaiser Family Foundation, The Medicare Part D coverage gap: Costs and consequences in 2007. August 2008.
        (Last accessed March 15, 2009.)
      4. Center for Studying Health System Change, More nonelderly Americans dace problems affording prescription drugs.
        (Last accessed March 17, 2009.)
        • Rector T.S.
        • Venus P.J.
        Do drug benefits help Medicare beneficiaries afford prescribed drugs?.
        Health Affairs. 2004; 23: 213-222
        • Christian-Herman J.
        • Emons M.
        • George D.
        Effects of generic-only drug coverage in a Medicare HMO.
        Health Affairs. 2004; 23: w455-w468
        • Hsu J.
        • Price M.
        • Huang J.
        Unintended consequences of caps on Medicare drug benefits.
        N Engl J Med. 2006; 354: 2349-2359
        • Tamblyn R.
        • Laprise R.
        • Hanley J.A.
        • et al.
        Adverse events associated with prescription drug cost-sharing among poor and elderly persons.
        JAMA. 2001; 285: 421-429
        • Chobanian A.V.
        • Bakris G.L.
        • Black H.R.
        • et al.
        The seventh report of the Joint National Committee on Prevention, Detection, Evaluation, and Treatment of High Blood Pressure.
        JAMA. 2003; 289: 2560-2571
        • Grundy S.M.
        • Cleeman J.I.
        • Merz C.N.
        • et al.
        Implications of recent clinical trials for the National Cholesterol Education Program Adult Treatment Panel III guidelines.
        Circulation. 2004; 110: 227-239
        • Moeller J.F.
        • Miller G.E.
        • Banthin J.S.
        Looking inside the nation's medicine cabinet: Trends in outpatient drug spending by Medicare beneficiaries, 1997 and 2001.
        Health Affairs. 2004; 23: 217-225
        • Anderson G.F.
        • Shea D.G.
        • Hussey P.S.
        • et al.
        Doughnut holes and price controls.
        Health Affairs. 2004; 23: 396-404