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With Medicare Plan, Drug Spending May Be Up
Date:7/1/2009

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.

People were classed in one of four groups: those who had no drug coverage before Medicare Part D; those who had drug coverage but with a cap of $150 a quarter (considered limited coverage); those who had a cap of $350 a quarter; and those who received uncapped drug coverage from their former employer for the entire four years of the study, considered the control group. People in the first three groups all switched to Part D as of 2006.

"The impact of Part D on medical spending really depended on prior drug coverage," Zhang said.

People who'd had no drug coverage increased their spending on drugs, on average, by 74 percent ($41 a month), those with a cap of $150 increased spending by 27 percent ($27 a month) and those with a $350 quarterly cap increased spending by 11 percent ($13), compared with the control group.

At the same time, each of the groups also decreased the amount spent on other medical care by $33, $46 and $30, respectively. This probably was due to better medication adherence and, thus, better control of medical conditions, the researchers stated.

One surprise was that drug spending actually went up in the group that had the most coverage before joining Part D.

The study suggested that drug overuse might have been partly responsible in this group and, to a lesser extent, in the other two groups.

"This shows that those who didn't have drug coverage, once they did get it, accessed the medication they needed and that kept them out of doctors' offices and emergency rooms," said Joseph Baker, president of the Medicare Rights Center, who was not involved in the study. "We always said there would be savings in
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