Part D saved Medicare money, Harvard study finds

Spending more money on drug therapies actually can be thrifty, at least for Medicare patients. That's the conclusion of a new study by Harvard Medical School and Brigham and Women's Hospital. As the Boston Business Journal reports, the researchers found that Medicare Part D, which subsidized drug purchases, led to lower costs for non-drug care.

Published in the Journal of the American Medical Association, the study compared medical spending on non-drug treatment both before and after Medicare Part D was implemented in 2006. Researchers used data from 2004 to 2007 on Medicare recipients who had limited drug coverage before Part D and on those who already had drug coverage when the new program came into force.

The researchers found that Part D cut other healthcare spending by about 10% per patient, or $1,200, for the group who had little drug coverage before the program. Costly inpatient care appeared to be reduced the most, while more cost-effective outpatient care wasn't affected as much. That's how drug treatment is supposed to work, of course, but this study offers dollar signs as hard evidence.

The Part D data ought to inspire Medicare to look at better integration of care, the researchers said. "These reductions in non-drug spending suggest Part D has not cost Medicare as much as initially expected," study author J. Michael McWilliams, a Harvard Medical School professor, said in a statement (as quoted by the BBJ). "This study exemplifies how spending on one type of service can affect spending on other types of care, which suggests that greater coordination and integration could lead to...higher value healthcare for elderly Americans."

- get the BBJ story