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Effect of prescription drug coverage on the cost of care to Medicare beneficiaries with asthma

The objective of this review is to investigate the impact of asthma on Part A and B expenditures for enrollees in the Medicare program, and the effect of voluntary outpatient prescription drug coverage on Medicare-covered asthma expenditures. Data were drawn from the 2001 Medicare Current Beneficiary Survey Access to Care file, a nationally representative sample of the Medicare population, and includes data on individual healthcare expenditures and characteristics, such as health status. Using regression analysis, it was found that self-reported asthma increased the probability of Part A (hospital) expenditures and the level of Part B (outpatient) expenditures. Voluntary prescription drug coverage decreased Part B spending on people with self-reported asthma by 7% but increased Part B spending by 23% for those without asthma. Prescription drug coverage had no effect on the level of Part A expenditures in either those with or without self-reported asthma. The author’s study suggests that increases in spending associated with the new Medicare prescription drug benefit may be mitigated by reductions in spending on chronic illnesses such as asthma. As the drug benefit is designed over the next 2 years, attention may need to be focused on the identification of medications that reduce overall Medicare spending to ensure that they are covered by the drug plans.