Multiple drug cost containment policies in Michigan's Medicaid program saved money overall, although some increased costs. Health Aff (Millwood) 2012 Apr;31(4):816-26
Date
04/12/2012Pubmed ID
22492899Pubmed Central ID
PMC4118749DOI
10.1377/hlthaff.2011.0246Scopus ID
2-s2.0-84862501885 (requires institutional sign-in at Scopus site) 7 CitationsAbstract
Michigan's Medicaid program implemented four cost containment policies--preferred drug lists, joint and multistate purchasing arrangements, and maximum allowable cost--during 2002-04. The goal was to control growth of drug spending for beneficiaries who were enrolled in both Medicaid and Medicare and taking antihypertensive or antihyperlipidemic prescription drugs. We analyzed the impact of each policy while holding the effect of all other policies constant. Preferred drug lists increased both preferred and generic drugs' market share and reduced daily cost--the cost per day for each prescription provided to a beneficiary. In contrast, the maximum allowable cost policy increased daily cost and was the only policy that did not generate cost savings. The joint and multistate arrangements did not affect daily cost. Despite these policy trade-offs, the cumulative effect was a 10 percent decrease in daily cost and a total cost savings of $46,195 per year. Our findings suggest that policy makers need to evaluate the impact of multiple policies aimed at restraining drug spending, and further evaluate the policy trade-offs, to ensure that scarce public dollars achieve the greatest return for money spent.
Author List
Kibicho J, Pinkerton SDMESH terms used to index this publication - Major topics in bold
AgedCost Control
Drug Costs
Female
Humans
Insurance Claim Review
Male
Medicaid
Michigan
Middle Aged
Organizational Policy
United States
