Question

assume that a patient has 80% coverage for medical services but no coverage for prescription drugs. An 80% drug benefit is added. Show graphically what will happen to the relative utilization of medical services and prescriptions, as well as on total health care, to attain a given health status. What happened to the amount spent on drugs (insurance plus patient amounts)? Why will total spending on health care diminish when the 80% drug benefit is added?

Answer 1

review focused on populations of patients who had prescription drug insurance coverage. We excluded studies of patients with health insurance in which the prescription drug insurance component was not separately analysed. The intervention or exposure of interest was expansion or restriction of prescription drug coverage. Studies were included if they collected empirical data comparing outcomes of patients before and after the expansion or restriction or if they compared patients with prescription drug insurance with a comparator population of patients without such insurance. We included only studies reporting clinical outcomes, which included use of health care services but not simply measurements of costs or health care spending related to service use. We excluded studies of prescription drug insurance benefit design changes that evaluated only effects on drug prescribing,14,15 expenditure patterns,16 or medication adherence alone.17 Although these measures are of key public health importance, we chose to focus on studies that directly evaluated patient health outcomes.

These inclusion criteria did not allow for condition-specific formulary alterations such as those characteristic of value-based insurance designs,13 nor did they allow for alterations in drug insurance benefit features such as changes in copayments or institution of prior authorization requirements.18 Even though such programs may affect patient outcomes, we chose to focus on broader drug coverage expansions or restrictions. Studies available for inclusion could have randomized, nonrandomized, controlled, prospective, retrospective, or natural experiment designs. Policy reviews that were not data driven and economic simulations were excluded.

Comparing Patients With and Without Drug Insurance

7 studies that evaluated the impact of drug insurance on patients’ health by comparing cohorts of patients with and without coverage. The study with the largest number of participants examined the impact of reported initiation of prescription drug insurance coverage in a sample of 22 741 Medicare Current Beneficiary Survey respondents from 1992 to 2000. The authors found that, in a fixed effects regression model accounting for the number of reported chronic conditions and doctor visits, there was no relationship between drug coverage and self-reported measures of general health status, functional disability, or hospitalizations. However, 2 other smaller studies involving survey data did reveal evidence of disparities in health outcomes among participants with and without drug coverage.8,21 These survey studies were limited in their analysis of patient-reported outcomes, which could have been affected by recall and other biases.

found 3 other studies that reported associations between drug coverage and objective reports of health outcomes. The largest (Bhattacharya et al.22) compared the effects of public and private insurance coverage on mortality among patients with HIV during the years 1996 to 1998. The study authors found that, relative to absence of coverage, private insurance was associated with a greater survival advantage (79%) than public insurance (66%; P < .05). This difference was attributable to increased use of highly active antiretroviral therapy among patients in private insurance plans; 50% of patients in private insurance plans received therapy early in their care, as compared with 34% of patients with public insurance and 32% of patients with no insurance. Piette et al.23 found similar results in their analysis of patients with Veterans Affairs–based health insurance and uninsured patients. Uninsured patients had greater odds of cost-related medication underuse (odds ratio [OR] = 5.6; 95% confidence interval [CI] = 2.7, 11.8), which was in turn linked to worse diabetes control and patient-reported health.

In the only non-US-focused study in our review, Bleich et al.24 surveyed patients in different areas of Mexico. They found that patients with drug insurance and hypertension had higher odds of receiving a prescription for an antihypertensive drug and receiving antihypertensive treatment than a propensity-score-matched sample of hypertensive patients without drug insurance. A fourth study that examined the association between health insurance and smoking cessation outcomes (quitting attempts and rates) showed no significant difference in quitting attempts or rates; however, this study involved a high risk of bias.25

Drug Insurance Expansions and Patient Health Outcomes:

Eight studies reviewed the effects of extending drug coverage to patients on their health outcomes (Table 2). In 3 of these studies, initiation of Medicare Part D drug insurance in 2006 was the key policy intervention. Afendulis et al.,26 studying adults across 23 states with at least one “medication-sensitive condition” (a condition that can be improved by drug adherence, such as congestive heart failure or stroke), found that initiation of Part D coverage was associated with a significant reduction from baseline in hospitalizations for such conditions. They estimated that the introduction of Part D was responsible for half of the reduction in admissions occurring in those states during the 2005–2007 time period.

2 studies evaluated loosening of previously strict drug insurance caps. Kozma et al.29 reviewed the effects of a 1984 policy change in South Carolina Medicaid; as a result of this policy change, a drug formulary that provided coverage for only a subset of prescription drugs was replaced with a program in which the state offered reimbursements for all prescription drugs and some over-the-counter drugs without restrictions. The formulary expansion was associated with increases in outpatient-focused variables (e.g., outpatient hospital services and physician visits) and reductions in inpatient-focused variables (e.g., hospitalizations). Balkrishnan et al.30 examined a similar change at a southeastern Medicare health maintenance organization that altered its policy from a tiered copay system for brand-name ($15) and generic ($7) drugs and a $200 quarterly drug expenditure cap to unlimited coverage of generic drugs (with a $5 copay) with a high copay ($25) and a cap on brand-name drugs ($25 per month). They found that the policy change was associated with a 4% decrease in patient office visits (P < .05) and a 6% decrease in total health care costs.

Drug Insurance Restrictions and Patient Health Outcomes

Eight studies evaluated the effects of drug insurance restrictions on health outcomes Only one study (Fuller et al.34) examined complete withdrawal of drug insurance. That study assessed the impact of the Oregon Medicaid program’s elimination of its methadone benefit program, which had previously been available to patients with opioid addiction. The authors found that enrolees who left the program after the elimination of coverage had a 75% rate of self-reported heroin use over the next year, as compared with a rate of approximately 33% among patients who paid for the methadone themselves or did not lose their coverage benefits. However, this study was uncontrolled and was methodologically the weakest in our review.

Summary:

Our systematic review of studies evaluating patient health status and health care service use related to possession of prescription drug insurance shows that such programs can have significant effects on both outcomes. Benefits were demonstrated in a variety of clinical circumstances, geographic regions, and temporal settings.

The link between drug insurance expansion and patient health outcomes might be mediated by a number of different mechanisms. One contributor is the improved access to prescription drug therapies offered by enhanced insurance coverage. Patients without insurance may obtain episodic care in an emergency department, but the health effects derived from most prescription therapeutics accrue after ongoing treatment. Consistent access is a key feature of stable insurance coverage. For example, in the Bhattacharya et al. study of outcomes among patients with HIV, the observed improvements in health were a direct result of the life-saving antiretroviral therapy made available to patients through their prescription drug insurance. Clearly, by reducing financial strain on patients, prescription drug insurance helps insulate them from cost-related medication nonadherence and helps advance their health outcomes.

Whether insurance coverage has a positive or negative effect on health care outcomes has become particularly controversial42 because the Affordable Care Act now authorizes the federal government to offer substantial resources to states for the purposes of expanding Medicaid. Although the federal government plans to cover the full cost of the expansion for the first 3 years and 90% of the cost thereafter, Medicaid expansion has been rejected by some states as too expensive, with state governors expressing worry about excessive spending on Medicaid necessitating cuts to other parts of the government budget.43Such perceptions have been buoyed by economic calculations of Medicaid expansion that predict the costs of additional individual enrollees44 without considering the reductions in costs accruing from the prevention of morbidity associated with use of medications among millions of Americans previously without drug insurance. A key question is whether there would be benefits from the expansion in terms of reduced mortality, and we found limited data addressing mortality directly.

The results of our review are consistent with retrospective studies showing that state-driven Medicaid expansions since 2000 in Wisconsin, New York, Arizona, and Maine have led to reduced mortality and improved coverage, access to care, and self-reported health.45,46 A prospective randomized study conducted in Oregon, where a Medicaid expansion was implemented through a lottery process in 2008, also demonstrated better self-reported physical and mental health among those who received health insurance.47 After 2 years of observation, the experience in Oregon has shown inconsistent effects on health promotion, with significant improvements in access to care and reductions in financial strain from medical costs but insignificant changes in clinical markers of hypertension and diabetes control (however, the study was underpowered for these clinical outcomes).48

Notably, effects on health care outcomes or health service use were not observed in all of the studies we identified. In some cases, the effects seen might be explained by the short-term time windows assessed. For example, studying a population sample after only 1 year of coverage, Liu et al. found reductions in out-of-pocket medication costs and increases in prescription drug use but no impact on outcomes. In other cases, negative outcomes may have been consequences of the study designs. For example, Khan and Kaestner found no statistically significant evidence of health benefits in a survey of elderly patients who self-reported changes in health and disability status, in part because their sample also reported limited changes in their use of prescription drugs after obtaining insurance.49 Their study showed a nonsignificant trend toward beneficial outcomes among a chronically ill subgroup of the population.