Wednesday, July 27, 2011

Two Views of Medicare D

Two studies on Medicare Part D have crossed my inbox and twitter feed this week. I haven't read either of them in full, only skimmed or read the abstract. I will freely confess that all of this is over my head so you should definitely read for yourself. Compare and contrast as you please.

From Douglas Holtz-Eakin (former CBO director and current president of American Action Forum) and Michael Ramlet (Director of the Forum’s Operation Healthcare Choice), we have "Cost Shifting Debt Reduction to America’s Seniors: Medicare Part D Rebates Would Dramatically Increase Drug Premiums." The full pdf report is 7 pages long. Here is the summary:

The United States faces a daunting budgetary outlook. To avert an impending debt crisis, policymakers must tackle the unsustainble growth in entitlments in general, and Medicare spending in particular. Imposing mandatory prescription drug rebates in Medicare Part D has been proposed as a solution. In this report, beneficiary data is used to evaluate the impact of introducing Medicaid-style rebates into the Medicare Part D program. Despite any cosmetic appeal, such rebates would dramatically raise, not lower, the premiums paid by America’s seniors and seriously undermine proven success in harnessing competition in entitlement programs.

(You can read more about the American Action Forum on wikipedia).

This week's issue of the Journal of the American Medical Association (JAMA) has an article on Medicare D. "Implementation of Medicare Part D and Nondrug Medical Spending for Elderly Adults With Limited Prior Drug Coverage" by J. Michael McWilliams, MD, PhD; Alan M. Zaslavsky, PhD; Haiden A. Huskamp, PhD is behind a paywall but you might be able to find a paper or online copy at your local public library (remember those?). An abstract is on JAMA's website so you can get the gist. Here's their conclusion:
Conclusion Implementation of Part D was associated with significant differential reductions in nondrug medical spending for Medicare beneficiaries with limited prior drug coverage.

In other words, JAMA is saying that the prescription benefits in Medicare D lowered the amount of money seniors spent on other types of health care.

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