With Medicare Plan, Drug Spending May Be Up

July 2 -- WEDNESDAY, July 1 (HealthDay News) -- Older people who signed up for Medicare's prescription drug coverage, called Part D, spent more on drugs after enrolling than they had before but less on other types of medical care, researchers have found.

Their study, in the July 2 issue of the New England Journal of Medicine, also found that spending varied depending on the type of drug coverage participants had before enrolling in Part D.

Although the report was not designed to look at improvements in health, another study on Part D, presented at the AcademyHealth meeting in Chicago, did.

That research, from the University of Maryland School of Pharmacy and funded by Novartis Pharmaceuticals, found "small but statistically significant" improvements in health status, based on daily activity levels, of those enrollees who previously had no prescription drug coverage. This seemed to correlate with an improvement in greater ability to afford medications, the study found.

Medicare Part D, implemented at the beginning of 2006, was intended to help relieve the burden of prescription drug costs for seniors on Medicare.

Architects of the plan hoped that better adherence to medication regimens would, in turn, result in better health outcomes and lower overall health costs.

At the time, 18 percent of people nationwide who were on Medicare had no drug coverage.

"The primary goal of Medicare Part D was to reduce beneficiaries' financial burden and improve medication use," explained Yuting Zhang, lead author of the NEJM study and an assistant professor of health economics at the University of Pittsburgh Graduate School of Public Health. "Some people also argued that if medication compliance improved, maybe that would potentially save the other non-drug medical-care spending. That was the motivation, but no one has looked at definite results."

Zhang and her fellow researchers compared spending on prescription drugs by about 35,000 people enrolled in the Medicare Advantage plan in Pennsylvania in the two years before implementation of Part D and the two years after.