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Bruce Stuart, Linda Simoni-Wastila, and Danielle Chauncey, Assessing The Impact Of Coverage Gaps In The Medicare Part D Drug Benefit, Health Affairs Web Exclusive, April 19, 2005 [Abstract] [PDF] [HTML Version][Appendix] [Reprints & Permissions]

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Assessing the Analysis Gaps: Strengths of the Medicare Drug Benefit

Bill Thomas   ( 23 September 2005 )

Re: Assessing the Analysis Gaps: Strengths of the Medicare Drug Benefit

Bruce C. Stuart, Linda Simoni-Wastila, Danielle Chauncey   ( 28 September 2005 )

Assessing the Analysis Gaps: Strengths of the Medicare Drug Benefit 23 September 2005
Bill Thomas, Chairman House Committee on Ways and Means Send comment to journal: Re: Assessing the Analysis Gaps: Strengths of the Medicare Drug Benefit joel.white{at}mail.house.gov Bill Thomas	Stereotypical profiles oftentimes have grounding in fact: for example, the ability of certain academics to miss the forest for the trees. As a case study, I reference the paper by Bruce Stuart, Linda Simoni-Wastila, and Danielle Chauncey that appeared recently in the online version of Health Affairs. The study conducted a torturous examination of the theoretical impact of the well-known coverage gap in the standard Part D drug benefit and yet managed to miss the point that the new Medicare drug benefit will provide significant assistance to seniors in purchasing the prescription drugs that they need. As many are aware, the standard Medicare drug benefit, which will take effect on January 1, 2006, includes a $250 deductible, provides 25 percent cost sharing up to $2,250 in drug spending, and then provides catastrophic coverage, with only 5 percent cost sharing, once a beneficiary has spent $3,600 out of his or her own pocket. No news here. However, this structure seems to have come as a recent revelation to these researchers, as they chose to spend time analyzing the relative impact this coverage gap will have on different groups of beneficiaries. With the results of their multivariate analyses and Durbin-Wu-Hausman tests, they drew dire conclusions about the efficacy and equity of the drug benefit. Yet their own data show that the new Medicare drug benefit will provide a tremendous improvement in coverage for all beneficiaries –- and those with chronic conditions in particular. The researchers chose to ignore these facts and focus instead on those things that the drug benefit does not do. As a consequence, one is forced to wonder whether this “research” was conducted with a political, rather than an empirical, motive in mind. For example, the article virtually ignores its own assumption that with the new benefit, total drug spending for beneficiaries previously without drug coverage will increase significantly –- between $800 and $1,400 annually –- an increase of 44 to 79 percent. Thus, beneficiaries who previously did not have coverage –- and as a result may not have had access to the medications they required –- will now have greater access to the prescriptions they need. The article instead focuses on the fact that, even with the drug benefit, total spending of those formerly without prescription coverage will be 76 to 92 percent of spending by those who have continuous coverage, stressing the point that spending by the two groups will not be equal. However, the authors fail to note that in the absence of the new benefit, beneficiaries without coverage would spend only 44 to 59 percent of the amount spent by those with continuous coverage. Thus, the new benefit makes real strides in ensuring greater access to needed medications for all beneficiaries. Furthermore, the article ignores the fact that real beneficiaries will save real money with the Part D drug benefit –- between $344 and $862 per year for the case studies presented. And those savings are compared to their pre-benefit drug spending, not compared to spending on the additional medicines they will be able to access through the new benefit. The article also makes certain assertions that are misleading or inaccurate. It states that beneficiaries with “above average spending will experience even longer benefit gaps before the generous catastrophic coverage finally kicks in.” For the standard drug benefit, the coverage gap is the exact same dollar value for everyone. Therefore, among those who will spend enough to actually reach the catastrophic coverage, those who have higher levels of spending will reach that coverage more quickly than those with lesser spending, resulting in a shorter period of time in the coverage gap, not a longer one. The article also states that “Medicare beneficiaries with continuous drug coverage in 2001 had three-quarters of their total drug spending paid for by their insurers, a more generous rate [than] will be available to any enrollee in the standard Part D benefit.” This statement ignores the extremely generous low-income subsidies, which will be available to one-third of all Medicare beneficiaries. The Centers for Medicare and Medicaid Services (CMS) estimates that the low-income program will cover an average of 96 percent of drug costs. The researchers conclude that “the standard Part D benefit structure will exact a disproportionate toll on people with diabetes, chronic lung problems, and mental illness in the form of both higher out-of-pocket costs and reduced use of medications compared with beneficiaries with average drug spending.” One marvels at the notion that providing beneficiaries who have chronic conditions with increased access to medicines at lower costs than they are paying now could be described as a “toll.” The bottom line: under the case studies presented, beneficiaries who previously had no drug coverage will be unequivocally better off with the new Medicare drug benefit than without it. Seniors can begin signing up for the new drug benefit beginning on November 15, 2005, with coverage beginning on January 1, 2006. Those with limited means can apply now to qualify for extra assistance. As seniors are making their decisions this fall about whether to enroll and which plan to choose, it is incumbent upon all of us to provide them with good information about the benefits that the new drug program can provide. In a cynical political context, the measure of success for those who opposed the new Medicare law may be how few seniors sign up for the drug benefit, even though it can provide beneficiaries with tangible benefits. When “research” attempts to legitimize such political aims, society must sigh in disbelief. Studies that spend time focusing on what the law does not do and ignore all that it does do risk driving seniors away from a program that can provide them with real and meaningful assistance. Surely this could not have been the reason for the timing of the publication of this article? Editor's note: Like all papers that Health Affairs publishes, the paper by Stuart et al. was subjected to a rigorous peer review process to ensure that the methods and results were scientifically sound and free of bias. The timing of the publication was determined by the submission date and the constraints of the review and revision processes, and was in no way motivated by political considerations. The paper was first submitted to Health Affairs on November 11, 2004, then revised in response to reviewer comments and resubmitted on January 31, 2005. After one more round of revision, the paper was accepted for publication on February 7, 2005, and published on April 19, 2005.
Re: Assessing the Analysis Gaps: Strengths of the Medicare Drug Benefit 28 September 2005
Bruce C. Stuart, Professor University of Maryland Baltimore, Linda Simoni-Wastila, Danielle Chauncey Send comment to journal: Re: Re: Assessing the Analysis Gaps: Strengths of the Medicare Drug Benefit bstuart{at}rx.umaryland.edu Bruce C. Stuart, et al.	The authors stand by the integrity of their work and let the results of the research speak for themselves.