Decreased out-of-pocket spending on prescription drugs accounts for reduced financial burden of care to patients, and is consistent with improved access to care.
Published Online: February 20, 2014
Peter Cunningham, PhD; and Emily Carrier, MD
Objectives: To examine trends in out-of-pocket spending and the financial burden of care for persons with diabetes between 2001 and 2009, and to examine whether these trends are consistent with trends in access to prescription drugs and utilization of hospital services.
Study Design and Methods: Data are from the 2001 to 2009 Medical Expenditure Panel Survey (MEPS). The sample includes persons aged 18 to 64 years with diagnosed diabetes. The primary outcome variable is the percent of people with out-of-pocket spending on insurance premiums and services that exceed 10% of family income. Secondary outcome measures include the percent with diabetes-related prescription drug use, perceived access to prescription drugs, hospital inpatient stays, and emergency department use in the past 12 months. Multiple regression analysis is used to control for changes in comorbid chronic conditions and other characteristics of persons with diabetes.
Results: Both out-of-pocket spending and the percent with high financial burden decreased markedly for persons with diabetes between 2001 to 2003 and 2007 to 2009. The decrease in spending was driven primarily by a decrease in spending on prescription drugs, including diabetes-related prescriptions. The shift from brand name drugs to generics accounts for much of this decline, although decreases in out-of-pocket spending for both brand name and generic drugs also contributed. During the same period, utilization of and access to diabetes-related prescriptions increased, and hospital use decreased.
Conclusions: Although the prevalence of diagnosed diabetes continues to increase, treatment is becoming more affordable, especially prescription drugs. This may offset some of the costs to the healthcare system of higher prevalence by reducing complications of uncontrolled diabetes that result in more costly hospital use.
Am J Manag Care. 2014;20(2):135-142
Patients receiving treatment for diabetes and related comorbidities often incur a substantial financial burden due to the out-of-pocket costs of care they receive. However, despite increased prevalence, the financial burden of diabetes care to patients decreased markedly over the past decade, due primarily to lower spending on prescription drugs.
Increased use of generics explains much of the decrease in spending on prescription drugs, although other factors—possibly including increased use of mail order and valuebased health plans—may also be reducing costs for patients.
Reduced financial burden was accompanied by fewer people with diabetes reporting that they had problems accessing prescription drugs, and fewer who had hospital inpatient stays and emergency department visits.
Diabetes has been widely recognized as a large and growing public health challenge in the United States. The number of adults with diagnosed diabetes increased 75% between 2000 and 2010 (to about 21 million by 2010), while the percentage of adults with diabetes increased from 6% to 9% during this same period.1
The increasing prevalence of diabetes not only has profound consequences for the health of the US population, but also for healthcare costs. The direct medical costs of diabetes were estimated to be $116 billion in 2007.2 Average medical expenditures for persons with diabetes are about 2.3 times higher than for people without diabetes, in part because complications of the disease often lead to other medical conditions, including heart disease and stroke, hypertension, eye problems, kidney disease, and nervous system disease.3
In addition, the high costs for treatment of diabetes and comorbid conditions often impose a high financial burden on individuals and their families, which itself can be a barrier to regular monitoring of the disease and adhering to treatment regimens.4 Development of treatment guidelines and new antidiabetic drugs has increased the intensity of treatment, which also increases the potential financial burden on people with diabetes.5
On the other hand, the greater availability and use of generic medicines has reduced the out-of-pocket costs and financial burden of prescription medications for many patients. As the percent of prescription drugs filled using generic drugs has increased, out-of-pocket spending on prescription drugs declined sharply for the US population, from an annual average of $215 in 2001 to $162 in 2009.6 For persons with diabetes, the availability of frequently prescribed antidiabetic medications in generic form—such as metformin—is also likely to reduce the financial burden of medical care for people with diabetes and their families.
This paper has 2 objectives: (1) to examine trends in out-of-pocket spending and medical cost burdens for persons with diabetes between 2001 and 2009, focusing especially on trends in prescription drug spending; and (2) to examine trends in the percentage of people with diabetes using diabetes-related medications, overall access to prescription drugs, and use of hospital care for persons with diabetes. To the extent that diabetes treatment has become more affordable over the past decade, we would expect to see more people with diabetes using diabetes- related medications, and fewer reporting that they were unable to receive needed prescription drugs. As prior research has established that greater adherence to diabetes drugs is related to lower hospital emergency department (ED) use and inpatient stays, decreases in hospital use over the past decade among people with diabetes would also be consistent with greater affordability and access to treatment.7
We used data from the 2001 to 2009 Medical Expenditure Panel Survey, Household Component (MEPS HC). The survey is based on a large nationally representative sample of the civilian noninstitutionalized population and is conducted annually by the federal Agency for Healthcare Research and Quality (2009 is the latest year for which data are publicly available at the time of this study). The MEPS sample is based on a subsample of the National Health Interview Survey (NHIS), conducted annually by the Centers for Disease Control and Prevention (CDC). The survey collects detailed information on healthcare expenditures, use of services, insurance coverage, health status, medical conditions, and other sociodemographic details of individuals and their families during 3 rounds of interviewing during the calendar year. Sample sizes range from between 33,000 to 37,000 for each year.
Cumulative response rates for the 9 years of the survey used in this analysis averaged around 60%. Cumulative response rates combine the initial response rate to the NHIS (the sample frame), as well as response rates in each of the 3 rounds of data collection for the MEPS sample. Survey weights used in this analysis calibrate population estimates to be consistent with the Current Population Survey conducted by the US Census Bureau, and adjust for differences in nonresponse by US census region, metro versus rural residence, income, age, gender, and family income.
The sample for this survey includes persons aged 18 to 64 years who, in response to a question in the survey, reported that a physician or other health provider had told them that they had diabetes, which is identical to the methods used by the CDC to assess diagnosed diabetes prevalence in the population. 8 Annual samples of nonelderly adults with diabetes ranged from about 900 to 1100. To increase the statistical precision of estimates, samples from multiple years were pooled. The study compares annual estimates for the years 2001 to 2003 (N = 2747); 2004 to 2006 (N = 3096); and 2007 to 2009 (N = 3439). Persons aged 65 years and older were excluded because most have Medicare coverage, and therefore financial burden is likely to differ considerably from that of the under- 65-years adult population.
Expenditures for each medical encounter for each sample respondent are collected during 3 rounds of survey interviews during the calendar year. Expenditures are reported separately for office-based medical provider visits, hospital inpatient, outpatient, and ED care, prescribed medicines, home healthcare, dental services, and vision aids. For each visit/ event, total expenditures are reported (ie, from all payer sources), as well as the amounts paid by third-party payers and out-of-pocket by the patient. To improve the quality and accuracy of expenditure reporting, the MEPS Medical Provider Component collects data from a sample of medical providers and pharmacies used by sample persons, which are used to either supplement or replace patient-reported data on expenditures.9 All expenditure data are inflated to reflect 2009 dollars, based on the Consumer Price Index.
The study also examines trends in the percent of persons with diabetes who live in families with “high financial burden.” This is defined similarly to previous studies using the MEPS, as the ratio of total out-of-pocket spending on health services and health insurance premiums to total family income.4,6,7 For this measure, out-of-pocket spending is defined at the family level (ie, summed across all members in the family, typically defined as the nuclear family). Each individual is assigned the family level burden measure. Individuals who live in families that spend more than 10% of family income on healthcare are defined as individuals with high financial burden.
More detailed analysis of spending on prescription drugs is also included. Respondents were asked to supply the name of any prescribed medicine they obtained. For each prescribed medicine, information was collected on the name, medical conditions (coded based on ICD-9 classification), spending, and source of payment information. In the analysis, we distinguish between prescriptions related to diabetes versus prescriptions for other conditions based on the class of drug.
We also distinguish between “brand name” and “generic” prescriptions by linking the MEPS to Lexicomp, a database that identifies and distinguishes brand name and generic medications.10 National Drug Codes were used to link MEPS prescription drug records with Lexicomp data. However, data on generic versus brand name are available only for the years 2005 to 2009 because of changes in methods used to assign National Drug Codes to prescription drug records.
To assess perceived access to prescription drugs, MEPS also asks respondents whether there was a time in the previous year when they were unable to obtain prescription drugs they or a doctor thought necessary. For hospital use, MEPS obtains information on all visits for inpatient stays and ED visits made in the prior year.
For the analysis of trends in spending and medical cost burdens, the analysis compares means and percentages for pooled samples of persons aged 18 to 64 years for the years 2001 to 2003, 2004 to 2006, and 2007 to 2009. All spending estimates reflect annual averages. Tests of statistical significance are computed for the change between 2001 to 2003 and 2007 to 2009 and between 2004 to 2006 and 2007 to 2009. All estimates are weighted to be nationally representative of the US civilian noninstitutionalized population with diagnosed diabetes.
For measures of the likelihood of having high financial burden, any use of diabetes-related prescriptions in the past year, access to prescription drugs, and use of hospital care, we use logistic regression analysis to examine whether changes between the three time periods are statistically significant, even after accounting for other changes in the aggregate characteristics of diabetics, including their age, gender, race/ ethnicity, number of comorbid chronic conditions, body mass index, limitations in daily activities, family income relative to the US poverty level, educational attainment, and health insurance coverage.
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