Ingenious study of 65 year old Medicare beneficiaries shows increase in mortality caused by an increase in pharmacy cost sharing
Today’s Managing Health Care Costs Number is 32.7%
Amitabh Chandra and colleagues have just published blockbuster and ingenious research that shows the potential harm from pretty small changes in the costs of prescription drugs.
They use the “donut hole” in Medicare prescription plans, where patients are responsible for 100% of medical costs after they exceed $2500 cost in a year to create a synthetic experimental group of 65 year olds who move into Medicare early in the year (who are more likely to hit the donut hole), and compare these to another group of 65 year olds who age into Medicare late in the year (when they are less likely to have enough costs to hit the donut hole). The first group has higher effective cost sharing in December than the second group. (They use dual eligible Medicare/Medicaid beneficiaries to project what drug spending would have been in the first group had they had full coverage without cost sharing.
From the paper:
...small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death.
The results:
Increase of about ⅓ in out of pocket costs (11% increase in coinsurance, $10.40 per drug) causes 22.6% decrease in total drug consumption ($61.20) and a 32.7% increase in mortality.
Price increases cause 18% more patients to fill no drugs at all, regardless of how many drugs they had been on previously
Many of the drugs that were not filled were lifesaving drugs (cholesterol, blood pressure, diabetes, asthma and COPD medications)
Patients at the highest tercile of risk based on their machine learning projections were almost three times MORE likely to drop cardiac drugs than those in the bottom ⅔ of risk
These differences held true for those who lived in both high and low income zip codes (although Medicare age-ins could live in wealthy zip codes while having relatively little income or cash)
Over ⅔ of those on 4 or more drugs at baseline filled NO drugs in December with this price increase
The “savings” Medicare beneficiaries realize by not filling drugs equates to $6,628 per life year lost - which is way below the $100-150K value we usually place on a life year.
The donut hole, a design initially meant to discourage overutilization in Medicare Part D, was “closed” in 2020 - so there is no longer this “cliff” where seniors have to pay 100% of the cost of medications after they hit a certain threshold.
If anything, the real impact on Medicare beneficiaries of this donut hole is probably substantially larger. This is looking at only the youngest non-disabled Medicare beneficiaries, and looking at mortality only in December of their 65th year. Behavior is likely similar in those over 65, who are more likely to die of the harm from not filling lifesaving drugs.
The authors’ conclusion:
...patient cost-sharing introduces large and deadly distortions into the cost-benefit calculus. Payers should evaluate the merits of these policies in light of their impact on health, not just on health care costs.