Effect of prescription benefit changes on medical care utilization in a medicare HMO population

Objective: To examine the impact of 2 cost-containment efforts in prescript ion benefits in successive years that included changes in copayment and cov erage levels, expanded generic coverage, and brand name prescription drug l imit-of-coverage in a Medicare health maintenance organization (HMO). The b enefit changes included moving to a drug benefit with increased total cover age and higher copayments in the first year (1998) and to one with brand na me limit-of-coverage and unlimited generic availability in the second year (1999). Study Design: A repeated-measures analytical design with enrollee follow-up before and after introduction of the 2 policies. Patients and Methods: A cohort of 2411 older adults continuously enrolled i n a Medicare HMO since 1998 was followed up for 1 year pre-post for healthc are service utilization and costs; 259 patients enrolled since 1997 were av ailable to test the effects of the first policy change. Results: Bivariate and multivariate analyses found a significant decrease o f 27% in prescription costs, a 4% decrease in, physician visits, and a 6% d ecrease in total costs associated with the change in prescription benefit i n the second year (1999). The policy change in the first year (1998) result ed in a 29% increase in prescription costs and 38% increased total costs fo r the HMO. Conclusions: Introduction of a prescription benefit that included substanti al brand name limit-of-coverage and generic drug coverage expansion was ass ociated with significantly reduced prescription costs. In addition, this ch ange did not seem to increase nonprescription-related healthcare service us e in the population.