A buoyantly
optimistic Paul Krugman proclaimed recently that Medicare’s woes are over—after
a long period of seemingly relentlessly rising costs, costs that were rising so
fast that they were clearly the major threat to the federal budget, Medicare
per beneficiary expenditures actually fell last year. Economics guru and NY Times editorialist Krugman argues that the good news cannot simply be attributed to the recession because
Medicare is a government program and therefore recession-proof. Now it’s
dangerous to take issue with a force such as Krugman. But I want to at least raise the possibility that
Medicare expenditures are not immune to the economic downturn because of the
large amount of money that Medicare beneficiaries pay out of pocket for health
care. And if a patient doesn’t get a drug prescription filled, for example,
because his co-pay is too high, then Medicare does not have to pay for that drug, and expenditures fall. In this vein, a report released in July by the Henry J. Kaiser Family Foundation, “How much
is enough? Out-of-pocket spending among Medicare beneficiaries: a chartbook” is
very sobering.
The main findings of
the report (see chart in previous post) are that fee-for-service Medicare recipients spent an average of
$4734 out of pocket for health care in 2010, up from $3253 in 2000--a 44%
increase. Most of that spending is by those age 85 or older: they spent an
average of $5962 out of pocket compared to only $1926 for those ages
65-74. And older people with 3 or more “ADL
deficits,” or difficulties carrying out basic daily activities, spent a mind-boggling $9200 on health care, mainly on services. Out of pocket spending
went to items such as Medicare premiums, other supplementary insurance, and long
term care. In addition, 11% went to paying for prescription
drugs as Medicare Part D has evolved since its inception to include more and
more cost shifting to patients.
Interestingly, my
colleagues at the Harvard Pilgrim Health Care Institute, just
published a study in Health Affairs in which they present data indicating that
older patients are increasingly skipping pills, taking less than the prescribed
doses of medicines, or failing to fill prescriptions altogether in order to
save money: among patients with 4 or more chronic conditions, they found that while 14.9% experienced “cost-related medication nonadherence” in 2005, this rate
fell steadily until it reached 10.2% in 2009, and then it began rising again,
reaching 10.8% in 2011.
So it is entirely
possible that the fall in Medicare costs reflects at least in part decisions made by patients to
forgo particular pricey interventions. The result, predictably, would be
savings to the entire Medicare program. Now whether such choices made by
patients adversely affects their health is another matter. The Health Affairs study assumes that
non-adherence to medications is likely to lead to adverse health outcomes
including worth health states and increased rates of hospitalization,
especially in older individuals with multiple chronic conditions. They base
their assumption on studies from the 1990s, principally conducted in the
mentally ill and in Medicaid patients, that in fact showed that when patients
did not take their medicines as prescribed, their clinical condition
deteriorated. Whether the same would hold true for chronically ill older
patients today is not so clear: there is ample evidence that older individuals with multimorbidity are at increased risk of adverse drug reactions the more
medicines they take and that following the guidelines for all the diseases they
have can cause falling, fainting, confusion, and other problems. Nonetheless, it
would be preferable for physicians to make wiser prescribing decisions based on
an understanding of physiology rather than leaving it to patients to decide
which medications to forgo based on cost.
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