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Study: Greater Pharmaceutical Use Can Lower Other Health Care Spending

By Marissa Evans, CQ Roll Call

September 8, 2015 -- Medicaid beneficiaries who use more prescription drugs tend to have lower costs for other health care services, according to a Health Affairs report.

Just a 1 percent increase in overall medication use led to lower costs in other medical spending for low-income or disabled beneficiaries in the joint state and federal program, which cost a total of $449 billion in 2013, the study found.

The drop was more intense for those battling chronic illnesses and disabilities. Among blind or adults with disabilities with an average age of 46 years old, a 1 percent increase in drug use was associated with a 0.108 percent decrease in total non-drug costs, the report found. A similar 1 percent increase in the use of prescription drugs among other adults who were 36 years old on average led to a 0.167 percent decrease in other medical costs, and among children a 0.041 percent decrease.

The report released Tuesday focuses on 1.5 million adult and child beneficiaries enrolled in fee-for-service Medicaid programs in 11 states. About 25 percent of them were blind or disabled adults, 11 percent were other adults and 64 percent were children. Researchers analyzed Medicaid eligibility and claims data on long-term care, the use of inpatient and outpatient services and prescription drug use from 2008 through 2010.

Prescription drug use was highest among blind or disabled adults, with 50 prescriptions filled per year, compared to 20 for other adults and six for children, according to the study. Among blind or disabled adults, 42 percent used medication for hypertension, 35 percent for depression, and 30 percent for gastroesophageal reflux disease.

About 23 percent of the other adults used anti-depressants, the most common medications in that group. Among children, the most commonly treated illnesses were asthma and chronic pulmonary disease.

The study comes as more policy experts and lawmakers continue to seek out data that shows the correlation between prescription drug medical care costs in Medicaid and other programs.

A 2012 Congressional Budget Office (CBO) report found such a link in the Medicare program, which serves seniors and people with disabilities. A 1 percent increase in drug utilization resulted in a 0.20 percent reduction in spending on other types of medical care including emergency department visits and hospitalizations. The authors of the new report noted that the CBO findings did not directly relate to the Medicaid population but that, taken together, the reports suggested that greater drug use can potentially hold down costs for other types of medical care.

"We believe that our study, as a complement to the CBO's work on Medicare, helps strengthen economic evaluations of Medicaid," according to researchers.

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