Proper Use of Medicines Saves Lives AND Money
Medicare Part D refers to the prescription drug benefit that went into law in January 2006. Basically, it provides for prescription drug coverage for everyone on Medicare. Clearly, this law was intended to bring medicines to people who previously couldn’t afford them and, in doing so, improve their quality of life.
Opponents of Medicare Part D feared that the costs would be prohibitive and drive up the overall healthcare costs of the nation. Proponents argued that enacting Part D was the right thing to do and that we as a nation were obligated to provide medicines to all who needed them.
Not many people banked on the possibility that such access to medicines might actually save money.
Last week, an article in the Journal of the American Medical Association (July 27, 2011) by J. Michael McWilliams, Alan Zaslavsky and Haiden Huskamp of Harvard Medical School showed that this may indeed be the case. Using survey data from the Health and Retirement Study, they compared non-drug medical spending for 6001 elderly adults (aged 65 and over) for those with limited drug coverage to those who had generous drug benefits before and after the implementation of Medicare Part D. What they found was extremely encouraging. Those with limited prior drug coverage had significant reductions in non-drug medical spending after benefiting from Medicare Part D. These reductions were specifically attributed to reduced use of skilled nursing facilities, less spending on physician services and reduced inpatient services. The amount of actual savings was estimated to be $306 per patient per quarter. In other words, greater access to medicines improved patients’ health, thereby saving downstream healthcare costs.
This really shouldn’t be a surprise. There are a number of studies where the introduction of new medicines has proven to have had major economic benefits. One of the best examples occurred in the treatment of AIDS in the late ’90s. Prior to the introduction of the “triple therapy” (highly active antiretroviral therapy or HAART), the overall per patient cost to treat AIDS patients amounted to roughly $1800 annually, of which $604 was due to drugs. Triple therapy was far more expensive at $821 per patient. But the overall cost to the healthcare system for AIDS patients on triple therapy dropped to $1521 per patient annually. More significantly, triple therapy cut mortality by 75%.
The debate about increasing healthcare costs will continue to rage over the coming years as the Federal and States’ budgets get tighter. It is important to remember in these debates that effective use of medicines and broad access to them not only improves the quality of one’s life, it also reduces overall costs to the nation’s doctor bills.