Medicare Part D reduces admissions to SNFs, hospitals

A new study finds that Medicare’s prescription-coverage program cuts healthcare costs since the benefit results in reduced admissions to nursing facilities and hospitals.

Harvard researchers investigated nondrug Medicare spending for 6,000 seniors between 2004 and 2007. The Medicare Part D program began in 2006. By comparing spending trends before and after the program began, researchers calculated nondrug savings. Implementation of Part D was associated with significant differential reductions in nondrug medical spending for Medicare beneficiaries with limited prior drug coverage.

The decrease was attributed mostly to reductions in spending on nursing home and hospital care, suggesting that patients were able to control health conditions through medication and preventing complications that could hospitalize them, reported The New York Times. Also, with the expanded drug coverage, doctors may have been able to treat patients on an outpatient basis for conditions that previously required an inpatient stay in order to be covered by Medicare.

Dr. J. Michael McWilliams, lead author of the study, which appears in The Journal of the American Medical Association, told The New York Times that the findings have a direct federal budgetary implication. “Medicare Part D probably did not cost us as much as was originally thought.”