Study Finds Medicare Part D Drug Spending Varies Widely Across Regions

In general, total prescription drug use is high among Medicare beneficiaries enrolled in the prescription drug (Part D)  program, but the use of both effective and risky drug therapies varies widely across regions, according to a report by the Dartmouth Institute for Health Policy & Clinical Practice. The report conducted by the Dartmouth Atlas Project,  found that while regions with higher Part D prescription drug spending also generally have higher spending on health care services covered by Medicare Part A and Part B, higher spending is not related to higher use of proven drug therapies. Jeffrey C. Munson, a physician and lead author of the report, said that there is no good reason for heart attack victims living in one part of the country to receive medicine to lower their risk of a second heart attack less often than those living in another part of the country. Katherine Hempstead, PhD, MA, senior program officer at the Robert Wood Johnson ,Foundation said that “Instead of varying widely, patterns of care should be nearly uniform across the country for noncontroversial drug therapies with a strong evidence for their use.” According to an article written in Kaiser Health News (KHN),”Dartmouth’s research is one of the first comprehensive looks at the Medicare Part D prescription drug program.”

The Report

The report describes current prescribing practices, including patterns of regional variation in prescription drug use across a spectrum of drug classes. The report categorizes prescription drug use by relative value of efficiency, including: (1) treatments that are widely believed to be effective, (2) treatments that may involve a high degree of prescriber or patient discretion due to diagnostic and therapeutic uncertainty, and (3) treatments with good evidence of potential harm in specific populations. The report also focuses on prescription drug spending, including the influence of volume and drug selection on regional drug spending, which provides an understanding of prescription expenditures as a component of the overall Medicare budget.

According to Dartmouth Atlas, it is important to understand the source of the variation. If low overall drug use reflects a failure to provide effective care, then reform efforts should target regions at the bottom of the total utilization ranking. Alternatively, higher drug use may be driven by the use of medications with uncertain benefits or the use of prescription medications in situations when there are other reasonable treatments available. To address this issue, Dartmouth Atlas looked more closely at regional variations in the use of drugs used to treat patients with cardiovascular disease, diabetes, and fractures caused by osteoporosis. Dartmouth Atlas specifically looked at beta blockers and statins used to treat patients after a heart-attack, ACE-I and ARBs and statins used to treat diabetics, and use of drugs to treat osteoporosis after a fracture. The researchers also looked at high risk drugs and discretionary medications (those that have less clear benefits but be effective for some patients), including proton pump inhibitors used to reduce symptoms of gastroesophageal reflux disease, antidepressants, dementia medications, and new sedative-hypnotics used to treat insomnia.

Other Findings

The report found that Miami has the highest spending on prescription drugs, $4,738 in 2010, while the national average is $2,670. Further, although the average Medicare beneficiary enrolled in Part D filled 49 standardized 30-day prescriptions in 2010, the average beneficiary in Miami filled about 63 prescriptions in 2010, while the average beneficiary in Grand Junction Colorado filled 39 prescriptions. The number of prescriptions filled per patient across hospital referral regions varied by a factor of more than 1.6. Dartmouth Atlas concluded that higher drug spending is not consistently associated with higher quality.  Therefore, variation in drug spending is unlikely to result from variation in the use of effective medication; this finding is consistent with past research by Atlas that demonstrated no consistent association between higher spending within a region and markers of care quality or improved patient outcomes.

Causes of Variations Among Regions

The report said that cost and prescribing variations are not due to some regions having greater numbers of sick individuals or regional differences in the cost of prescription drugs.  Rather, the variations are more likely due to the regional culture of medical practice. For example, Miami, specifically, has a history of high use of health care services and rates well above the national average on the use of discretionary drugs. Dartmouth’s research showed that a major contributor to higher spending may be the large number of physician specialists in the Miami, which may lead to more visits to doctors and more diagnostic tests. The Kaiser article reported that Munson said that  high-spending “[…] really speaks to a culture of more aggressive care.” He added that spending is closely tracking with the use of discretionary drugs, stating that regions with high use of discretionary medications tend to have higher prescription drug costs per Medicare beneficiary.