Effects of Medicaid drug-payment limits on admission to hospitals and nursing homes

Article Abstract:

The cost of medical care in the United States shows no signs of subsiding, and health care providers and government officials continue to try to find ways to reduce costs. However, targeting specific expenditures for cutbacks may produce only the illusion of savings if overall health costs rise as a result. While this may be understood in principle, demonstrating it in practice is more difficult. However, the state of New Hampshire targeted drug-reimbursement under Medicaid for cutbacks and provided an opportunity to observe the effects of cutbacks. For 11 months, New Hampshire had instituted a limit on reimbursement to three medications. Thirty-six months of Medicaid claim data were analyzed which included the 11 months of the three-drug limit. For purposes of comparison, data from New Jersey during the same 36-month period were included. New Jersey had introduced no such three-drug limit. The patient populations in New Hampshire and New Jersey were found to be nearly identical. The institution of the three-drug limit in New Hampshire was associated with a 35 percent decrease in the use of specific drugs tabulated in the study. These drugs included insulin, anticonvulsants, heart drugs, and other drugs which might be expected to play an important role in maintaining patients' health. The decrease in drug use in New Hampshire was associated with an increase in admission to nursing homes. No similar increase was observed in New Jersey in the same period. Admissions to hospitals were unchanged by the three-drug limit. When the three-drug limit was discontinued after 11 months, most patients admitted to nursing homes did not return to their own homes or families. These observations indicate that attempts to conserve health care resources may substantially affect the health of the public, and, ironically, may actually drive up the cost of health care by ultimately necessitating more expensive care in the long run. (Consumer Summary produced by Reliance Medical Information, Inc.)

Economic aspects, Finance, Economic policy, Medicaid, Pharmaceutical services, Drug utilization, Drug monitoring

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Withdrawing payment for nonscientific drug therapy: intended and unexpected effects of a large-scale natural experiment

Article Abstract:

Relatively little is known of the consequences of designating certain drugs and medical technologies that are not considered to be effective, as 'ineligible for reimbursement' by insurance providers. Twelve drugs which fall into this category have been identified as Drug Efficacy Study Implementation (DESI) drugs and a background summary is provided which outlines the evolution of the relevant regulations and guidelines. A random sampling of 390,465 individuals from the New Jersey Medicaid population was performed to investigate the use of these 12 categories of drugs whose clinical effectiveness is questionable. Four groups of subjects who regularly used these drugs were also examined. Factors considered included overall expenditures, prescriptions, and doctors' use of substitute drugs. The results of analysis of the data indicated that the changes in reimbursement policies had no apparent impact upon the use of these drugs. These drugs, which were not eligible for reimbursement, represented seven percent of all annual prescriptions. During the course of this 42-month study, the overall rates of prescriptions increased from an average of 0.86 to 1.00 prescriptions per month per subject. Although a decrease in the use of DESI drugs was estimated to be 21.7 per 1,000 individuals per month, an increase in the use of substitute drugs of 33.7 prescriptions per person offset this figure. This increase included both unapproved and scientifically approved medical therapies. The rise in the use of these therapies approximated the savings realized by the elimination of DESI drugs for reimbursement. Restrictions on reimbursement of treatments did not have the desired results of reducing the usage of these drugs. Investigators suggested that education might be necessary to augment the existing restrictions and to promote better therapeutic and economic practices. (Consumer Summary produced by Reliance Medical Information, Inc.)

Drugs, Statistics, Drug therapy, Health insurance, Drug administration and dosage

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Use of psychoactive medication and the quality of care in rest homes: findings and policy implications of a statewide study

Article Abstract:

Many elderly patients who are diagnosed with chronic mental illness have been transferred out of state institutions to rest homes where there is less medical supervision. Fifty-five rest homes in Massachusetts were evaluated in order to determine the prevalence of psychoactive (affecting mind and behavior) medication use, drug side-effects, and level of medical supervision. Almost half of the total number of residents were given some type of psychoactive medication, 40 percent were administered antipsychotic drugs, and 18 percent were prescribed two or more such drugs. In one rest home found to have high anti-psychotic drug use, 50 percent of the residents were not being followed by a mental health professional. Mental status testing showed an impairment in over 30 percent of the residents. Drug related side-effects were identified in 6 percent of the residents receiving psychoactive drugs. Personnel caring for these patients had little understanding of the use and side effects of these medications. To improve the safety and level of care in these facilities regulatory monitoring should be required.

Health aspects, Aged, Elderly, Surveys, Massachusetts, Psychotropic drugs, Nursing home care, Long-term care facilities, Long term care facilities

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