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The effect of a Medicaid drug copayment program on the utilization and cost of prescription services.

The effect of a copayment for pharmaceutical services in a Medicaid program is presented. Data were collected from Medicaid claim files in South Carolina (experimental program) and Tennessee (control program) for a 4-year period, 1976-1979. Utilization rates and expenditures for 1 year prior to copayment and 3 years after copayment were computed from a stratified sample of 18 counties. Both the level of prescriptions per eligible recipient and the slope of the utilization function after copayment were found to have declined with the implementation of copayment in South Carolina. The level of the expenditure series after copayment also declined, but the series retained a positive trend. Subsequent analysis of prescription quantity concluded that the increasing expenditure function was attributed to the inflation in cost of ingredients rather than an increase in average prescription size. The study concluded that a small (50) copayment for prescription service is a successful mechanism to control the cost and assist in financing a Medicaid prescription drug program.

Adult↗

Determinants of change in Medicaid pharmaceutical cost sharing: does evidence affect policy?

Since 1980, many Medicaid programs have instituted, adjusted, or abolished pharmaceutical copayments or limitations on the number of prescriptions per patient (caps). Studies indicate that prescription caps can harm patients and increase Medicaid costs. However, because there is little information on how state policy makers select and evaluate such policies, in-depth telephone interviews were conducted with key informants in Medicaid programs that had recently made changes in cost-sharing policies. Among the barriers to evidence-based policy making were lack of political power, skills, and infrastructure; crisis-oriented decisions; compartmentalized budgeting; lack of advocates for disadvantaged patients; and the absence of timely research. Research was applied successfully when the interests of patient advocates and the drug industry were aligned and when Medicaid analysis were able to identify and communicate relevant research to policy makers at the time, or "teachable moment," that policy was being changed.

Cost Sharing↗

Employees pay more, get more.

One benefit plan shares costs with employees by increasing deductibles. But the plan also allows employees to share in the savings it creates.

Cost Allocation↗

The human factor.

Though theoretically elegant, some expected health-system reforms could taste like bitter medicine to many patients.

Competitive Medical Plans↗

Better MSP (Medicare secondary payer) process may boost payments.

Because the Federal government estimates large overpayments by Medicare, changes in the Medicare Secondary Payer (MSP) program may play a significant role in future Medicare budget cuts. A major contributor to MSP problems is providers' failure to adequately collect coverage information from Medicare beneficiaries. Along with data sharing between Federal agencies to help identify responsibility for Medicare claims, providers likely will face more pressure to properly collect Medicare beneficiary information. Because of MSP program payment structure, improving billing offices' procedures for collecting Medicare beneficiary information ultimately may increase providers' overall payments.

Admitting Department, Hospital↗

Control of prescription costs--is it possible?

The author considers two choices for controlling the cost of prescription drugs: Return the prescription drug program to the TPA, or implement plan design changes. Making changes to the buying habits of the public is key.

Cost Control↗

Do the incentives in 3-tier pharmaceutical benefit plans operate as intended? Results from a physician leadership survey.

BACKGROUND: Three-tier pharmaceutical benefit systems use graded co-payments to steer patients toward "preferred" formulary medications. OBJECTIVES: To evaluate physicians' knowledge of formularies and out-of-pocket costs in such systems, as well as their perceived responsibility for helping patients manage out-of-pocket costs. STUDY DESIGN: Self-administered written survey. METHODS: Physician leaders participating in the California Medical Association Leadership Conference were surveyed. RESULTS: A total of 133 responses were received from 205 participants (65% response rate). Physicians reported that they were often unaware of patients' out-of-pocket costs at the time of prescribing. Fifty-nine percent of physicians reported that they never or seldom were aware of patients' "preferred" (lower cost) formulary options when prescribing, and 70% never or seldom were aware of patients' out-of-pocket costs when prescribing. Although 88% of physicians agreed that it is important that patients' out-of-pocket costs for prescription drugs are managed, only 25% strongly or somewhat agreed that it is their "responsibility" to help. Instead, 69% of physicians believed that it is the responsibility of the pharmacist to be familiar with patients' out-of-pocket costs. Physicians reported that they receive phone calls from pharmacists concerning formulary issues after 18.6% of the prescriptions they write. CONCLUSIONS: Physician leaders reported that they often do not possess the knowledge to assist patients in managing out-of-pocket costs for prescription drugs and they depend on pharmacists to communicate patient preferences in making prescribing decisions. As a result, price preferences are communicated indirectly, likely less efficiently, rather than intentionally when prescribing decisions are made.

Data Collection↗