Economic effect of an expansion of pharmacy benefits on total health care expenditures by a state Medicaid program

Abstract

ObjectivesTo evaluate the economic effect of a pharmacy benefit expansion on a population of Oklahoma Medicaid recipients and to determine whether recipients who routinely maximized their monthly prescription limit (cap) before the benefit expansion benefited more from the expansion than the remainder of the study population. DesignRetrospective study SettingOklahoma Medicaid claims data from January 1, 2003, to December 31, 2004. PatientsData from 15,936 Oklahoma Medicaid recipients. InterventionRetrospective administrative analysis using the Oklahoma Health Care Authority pharmacy and medical claims databases. Main outcome measuresTotal health care expenditures per recipient per year, total medical expenditures per recipient per year, and total pharmacy expenditures per recipient per year. ResultsTotal health care expenditures increased 17% after the benefit expansion (P < 0.0001). Of this increase, 65% was attributed to pharmacy expenditures and 35% to medical expenditures. However, a subpopulation of recipients who routinely reached their prescription limit before the expansion had a statistically significant increase in total and pharmacy expenditures; a statistically significant increase in medical expenditures was not observed. ConclusionAlthough total health care expenditures increased after a monthly pharmacy benefit in a Medicaid population was expanded, a subpopulation of recipients identified as high pharmacy users before the expansion did not have a statistically significant increase in medical expenditures, whereas those who were non–high users experienced a significant increase. Additionally, this subpopulation experienced a nonsignificant decrease in hospital expenditures. These results could suggest that this subpopulation was affected differently than the overall population by the expansion of the Medicaid pharmacy benefit.