Acknowledgements
• Collaborators:
The Impact of Drug Benefit Caps
− Dana Goldman
− Pinar KaracaKaraca-Mandic
• This research was funded by:
Geoffrey Joyce, PhD
− National Institute on Aging
A6794c-2 6/06
Imposing a Spending Cap Creates a
Fundamental TradeTrade-off
Benefit Cap
• Annual limit on the plan’
plan’s contribution
•
Imposing a spending cap decreases the cost to
provide the prescription benefit
In this case, $2,500 benefit cap
• Makes coverage available to more beneficiaries
• Common in Medicare M+C plans
A spending cap creates a coverage gap (or “donut
hole”
hole”) for beneficiaries
• Impact of caps on retirees < age 65 and 65+ in
20032003-2004
• Increases the risk that patients will reduce or
cease drug therapy
A6794c-3 6/06
As Set Up, Medicare Part D Raises Some
Issues
Stop-Loss $5,100
($3,600 in
out-of-pocket)
Catastrophic
Coverage
Catastrophic
Coverage
Insurer
Pays
Insurer Pays
95%
ofCosts
Costs
90% of
Beneficiary
Pays Next
$2,850 in Rx
Spending
5% Cost-Sharing
Above Stop-Loss
Beneficiary Paid
A6794c-4 6/06
Tseng et al (2004): Surveyed Beneficiaries to
Assess the Effects of Spending Caps
1,300 Medicare+Choice enrollees in one state in
2001:
• Group who exceeded their annual prescription
benefit cap of $750 or $1,200
Insurer Paid
• Matched controls who did not exceed their
annual cap of $2,000
Initial
Coverage Limit
$2,250
75%
Paid by
50%
of Costs
Paid
Plan
by Insurer
($1,500)
($2,113)
25% Copay ($500)
$250 Deductible
Those exceeding the cap had resulting coverage
gaps of 75–
75–180 days
2006
A6794c-5 6/06
A6794c-6 6/06
1
Beneficiaries Reported Using Several
Strategies When They Exceeded Caps
Switched
Drugs
Hsu et al (2006): Impact of $1,000 Cap on
Utilization, Costs, & Clinical Measures
• Compared clinical and economic outcomes in 2003
among Kaiser M+C members in capped vs. nonnoncapped plans in 20022002-2003 (age 65+)
15 (9)
− EmployerEmployer-supplemental insurance – No cap
Used Drugs
Less Often
− IndividualIndividual-purchased - $1,000 benefit cap
18 (10)
− About 13% reached the cap in 2003
Used Free
Samples
34 (27)
0
10
20
30
40
• Those in capped plan:
− 31% lower Rx costs
− No difference in total medical costs
Percent of Beneficiaries Using Strategy
A6794c-7 6/06
A6794c-8 6/06
Hsu et al (2006)
Aims of This Study
• But had higher rates of
• Examine Rx utilization and costs in more detail
− ED visits (RR=1.09)
− Behavior prepre- and postpost-cap
− Nonelective hospitalizations (RR=1.13)
− Timing of cap
− Mortality rate (1.22)
− Stopping, switching, mailmail-order use, by class
− NonNon-adherence (1.2(1.2-1.3)
− Do those who stop resume drug therapy in
subsequent year
• Capped members had higher odds (1.2 – 1.3)
• Impact on hospitalizations and ED visits
− Elevated LDL
− Systolic blood pressure
− HbA1c
A6794c-9 6/06
A6794c-10 6/06
Distribution of Health Plan Spending
in Capped Plans (PPPY)
Data & Methods
• We linked health care claims to health plan benefits
of 30 large employers (1997(1997-2004)
PPPY Spending by Health Plan
− Over 50 health plans
< $2,400
$2,401$2,499
>= $2,500
N
%
6,843
94.1
192
2.6
239
3.3
N
%
25,972
88.6
1,359
4.6
1,981
6.8
− Nearly 8 million personperson-years
• Analyze 7 plans in 20032003-2004 from large employer
Plan 1
− 2 plans had an annual Rx benefit cap of $2,500
• Compare Rx and medical use
Plan 2
− Among groups within the same (capped) plan
− Among persons in capped vs. uncapped plans
A6794c-11 6/06
A6794c-12 6/06
2
Classify Members Into 3 Groups
When Do Members Reach the Cap?
• Group 0: Rx spending by the health plan <= $2,400
Percentile of Those Reaching the Cap
• Group 1: Rx spending by the health plan > $2,400
− But no subsequent Rx claims
5th
10th
25th
50th
75th
90th
Feb
April
June
Sept
Nov
Dec
• Group 2: Rx spending by the health plan > $2,400
− With subsequent Rx claims
A6794c-13 6/06
Monthly Rx Spending in Capped vs.
NonNon-capped Plans (>$2,400)
A6794c-14 6/06
Monthly Rx Use in Capped vs. NonNon-capped
Plans (>$2,400)
12
PMPM N30DE Scripts
PMPM Rx Spending
700
600
500
400
300
200
10
8
6
4
2
100
0
0
1
2
3
4
5
6
7
8
9
10
11
1
12
2
3
4
5
6
7
8
9
10
11
12
Month in 2004
Month in 2004
A6794c-15 6/06
A6794c-16 6/06
Percent Switching Medications PostPost-Cap
Percent Stopping Medications PostPost-Cap
(Among Those Reaching the Cap Before November)
(Among Those Reaching the Cap Before November)
Diabetes
Percent Switching Post-Cap
Cap
No Cap
3.3
5.8
Diabetes
Percent Stopping Post-Cap
Cap
No Cap
4.9
3.3
Cardiac
9.6
8.1
Cardiac
5.2
5.4
Hypertension
7.2
6.3
Hypertension
7.0
6.6
Depression
4.2
6.1
Depression
16.4
8.7
Cholesterol
2.1
2.4
Cholesterol
13.0
4.8
A6794c-17 6/06
A6794c-18 6/06
3
Resumption of Medication Use
Preliminary Conclusions
• Among those who stopped taking a class of
medications in capped plans
Imposing a spending cap:
• Reduces Rx use overall
• Modest taketake-up in Q1 of 2004
− 50% - 66% reductions in NovNov-December
− May be related to data problem in 2003
− Effects vary modestly by therapeutic class
• Increases the risk of adverse health outcomes
− Inconsistent evidence on medical use
A6794c-19 6/06
A6794c-20 6/06
4