Part D drug benefit did not save money for Medicare

Did Medicare Part D Affect National Trends in Health Outcomes or Hospitalizations?: A Time-Series Analysis

By Becky A. Briesacher, PhD; Jeanne M. Madden, PhD; Fang Zhang, PhD; Hassan Fouayzi, MS; Dennis Ross-Degnan, ScD; Jerry H. Gurwitz, MD; and Stephen B. Soumerai, ScD
Annals of Internal Medicine, June 16, 2015

Background: Medicare Part D increased economic access to medications, but its effect on population-level health outcomes and use of other medical services remains unclear.

Objective: To examine changes in health outcomes and medical services in the Medicare population after implementation of Part D.

Results: Five years after Part D implementation, no clinically or statistically significant reductions in the prevalence of fair or poor health status or limitations in ADLs or instrumental ADLs, relative to historical trends, were detected. Compared with trends before Part D, no changes in emergency department visits, hospital admissions or days, inpatient costs, or mortality after Part D were seen. Confirmatory analyses were consistent.

Conclusion: Five years after implementation, and contrary to previous reports, no evidence was found of Part D's effect on a range of population-level health indicators among Medicare enrollees. Further, there was no clear evidence of gains in medical care efficiencies.


Researchers find prescription drug benefit did not save money for Medicare

By Joe O'Connell
news@Northeastern, June 16, 2015

For years, the Medicare pre­scrip­tion drug ben­efit Part D has been cred­ited with pos­i­tively impacting national trends in health out­comes and med­ical ser­vices. But a recent study led by North­eastern asso­ciate pro­fessor Becky Briesacher chal­lenges that assump­tion.

“We are con­cluding that Medicare Part D did not save the (Medicare) pro­gram any money overall,” said Briesacher, a health ser­vices researcher in the School of Phar­macy with nationally-​​recognized exper­tise in drug policy and med­ica­tion use in older adults. “You have to be real­istic about the fact that giving people access to med­ica­tion is impor­tant, but it’s not going to sub­stan­tially save money in other parts of the health care system or keep a sig­nif­i­cant number of people out of the hospital.”



By Don McCanne, MD

Although it was important to include a drug benefit in the Medicare program there was concern that the conservatives designing the program wanted to allow the market to work its magic. The program was to be administered by private pharmacy benefit managers (PBMs) rather than the government. In fact, the government was even prohibited from negotiating drug prices with the manufacturers. Further, it was thought that the benefits of improving access to drugs would make patients healthier thus reducing future costs for Medicare.

This study shows that the magic did not work in that the drug benefit did not save money for Medicare, and it did not measurably change the health status of Medicare beneficiaries. Specifically there were no changes in emergency room visits, hospitalizations, and inpatient costs, nor was there any change in mortality.

It would not be surprising to see conservatives propose that the Part D program be terminated since it supposedly isn’t doing any good. But there are innumerable studies that have shown that some medications do provide at least a modest benefit, though those benefits were not detected by this study.

At any rate, it is clear that PBMs are not as effective price negotiators as is our government, as demonstrated by the greater value in drug purchasing that we have through the VA and the Medicaid program. Also, the PBMs waste considerable funds in excess administrative activities, not to mention the added middleman profits that they divert to themselves.

Under an improved Medicare for all we would have a more efficient and less costly publicly-administered program that would ensure that the government was paying fair prices for our drugs. It is not that way now.