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Drug policy down under: Australia's pharmaceutical benefits scheme.

Australia has had a government subsidized universal system of pharmaceutical provision for 50 years. The Pharmaceutical Benefits Scheme (PBS) consumes around 14 percent of total government health care expenditures and has grown substantially in both range of drugs covered, and expenditure since it was first introduced in 1950. It incorporates patient copayments (with differentials for the general population compared with concessional beneficiaries). Prior to listing a drug on the PBS it is subject to a rigorous cost-effectiveness analysis.

Australia↗

The impact of outpatient drug benefits on the use and costs of health care services for the elderly.

In light of the current debate surrounding the extension of Medicare benefits to cover outpatient drugs, it is important to increase our understanding of the impact of drug payment programs on overall health care outcomes and expenditures. In this retrospective study of health care use among Medicare beneficiaries in New Jersey and eastern Pennsylvania, we studied the impact of New Jersey's Pharmaceutical Assistance for the Aged (PAA) program on health care costs. Using multiple regression analysis, we found that New Jersey Medicare recipients used, on average, $238.50 less in inpatient hospital care under the PAA program than did their counterparts in eastern Pennsylvania, which did not have a drug payment assistance program in place. Although administrative costs may have reduced overall savings, it seems reasonable to conclude that the PAA program resulted in no overall health care cost increases.

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A critical analysis of studies of state drug reimbursement policies: research in need of discipline.

Concerns over pharmaceutical costs and appropriateness of medication use have led state Medicaid programs to restrict drug reimbursement. This article critically reviews 20 years of research on cost sharing, drug reimbursement limits, and administrative limitations on access to particular drugs via formularies, category exclusions, or prior authorization requirements; evaluates their methodological rigor; summarizes the state of current knowledge; and proposes future research directions. Drug reimbursement caps and modest cost sharing can reduce the use of both essential and less important drugs in Medicaid populations; severe reimbursement caps may precipitate serious unintended effects. Limitations on access to particular drugs can cause both rational and irrational drug substitution effects; it is unclear whether such limits reduce expenditures either for drugs or for overall health care.

Cost Control↗

A description of outpatient drug use in rural China: evidence of differences due to insurance coverage.

This paper describes the effects of health financing systems (insurance) on outpatient drug use in rural China. 1320 outpatients were interviewed (exit interview) in the randomly selected county, township and village health care facilities in five counties in three provinces of central China. The interview was face to face. Questions were asked by a trained interviewer and were answered by patient him/herself. The main finding was that health insurance appeared to influence drug use in outpatient services. The average number of drugs per visit was 2.56 and drug expenditures per visit was 16.9 yuan. Between insured and uninsured (out-of-pocket) groups, there were significant differences in the number of drugs and drug expenditures per visit. The insured had a lower number of drugs and a higher drug expenditure per visit than the uninsured, implying the use of more expensive drugs per visit than the uninsured. There were also significant differences in the number of drugs and drug expenditures per visit between the types of insurance. One third of the drugs were anti-infectives, most of which were penicillin, gentamycin, and sulfonamides. The results imply that uninsured patients do not receive the same care as the insured do even if they have the same needs. The fee-for-service financing for hospitals and health insurance have changed health providers' and consumers' behaviour and resulted in the increase of medical expenditure.

China↗

The life and death of a field experiment: a case study of health care research in a hostile environment.

This paper discusses the effects of powerful confounding events on the evaluation of an innovative health care payment program--an experiment with capitation payment for pharmacy services for Medicaid recipients. The research, conducted at the University of Iowa from 1975 to 1982, used a sophisticated experimental design; it was funded by the National Center for Health Services Research, the Health Care Financing Administration, and the State of Iowa, representing an investment of over two million dollars. Despite this investment, and the interest of many at the national level, events in the research environment during this period may well have distorted the conclusions of the research. Thus this case study highlights the problems of conducting evaluation research, particularly social experiments, on innovative programs perceived as threatening to the status quo.

Capitation Fee↗

Blind faith?

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