Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. Utilization Estimates

04/01/2000

The MCBS and the MEPS household component both involve multiple rounds of interviews with each respondent. In each interview, the respondent is asked about services used in the period since the last interview. MEPS separately surveys pharmacies named by respondents, and can thus supplement the information gathered in the household survey. Because MCBS has no pharmacy component, it must collect all utilization and price information through the household survey.

MCBS uses a variety of devices to promote fuller reporting by participants. Between interviews, participants are asked to keep track of the services they used on a calendar and to retain bills, receipts, check stubs and other relevant documentation. For a filled prescription they are asked to save and bring to the interview the actual bottle, the package it came in, and any receipts or other statements they received with the prescription. To further aid recall, the interviewer in each round has information about the drugs reported in the previous interview, and thus can ask whether the respondent is still taking the same drugs. Still, the information is probably incomplete. Some respondents may not keep the requested records, or the proxy who actually participates in the survey for individuals unable to be interviewed may not have full information.

MEPS collects less information through the household survey. For example, charge and payment data are not obtained from participants who report that their insurance pays the pharmacy directly. Instead, MEPS obtains some information through the pharmacy component. Each participant who reports having a prescription is asked to identify the pharmacy that filled it and to give permission for that pharmacy to share information. Permission was obtained for 73 percent of possible person-pharmacy pairs, and pharmacies responded to data requests for 67 percent of these pairs. Thus there is information from pharmacies for about half the instances in which a participant named a specific pharmacy.

The pharmacy component provided more detailed data on specific drugs used and on their costs, but it did not actually increase MEPS estimates of total drug utilization. It was expected that pharmacies would sometimes report filling more prescriptions for an individual than the individual had reported in the household survey. While this sometimes occurred, aggregate utilization estimates derived from the household data alone are actually larger than those derived from the pharmacy survey alone. Thus there remains the possibility of some undercounting of total prescriptions. However, aggregate MEPS data benchmark fairly well to external data on prescription drug utilization.

The MEPS data, based on household responses supplemented with some reporting from pharmacies, can be compared to IMS data, which are based on pharmacy audits. MEPS estimates a total of 2.1 billion prescriptions, excluding free samples, for the noninstitutionalized population in 1996. IMS data show total pharmacy prescription volume of 2.41 billion, about 15 percent more. However, the IMS data include prescriptions for people in institutions, including the 1.6 million people who were in nursing homes in 1996 and who are often heavy users of prescription drugs. MEPS excluded people in institutions (along with individuals in the military, prisoners, and non-resident individuals). The difference in populations covered may account for much of the difference in total prescription counts.

For the Medicare population, MEPS reports 9.8 percent more prescriptions than does MCBS. The two surveys are almost identical in their estimates of the proportion of beneficiaries who received any prescription during the year; the difference is chiefly in their estimates of the annual number of prescriptions for each person who received any prescription drug. A portion of this difference is attributable to somewhat different treatment of diabetic supplies in MEPS and MCBS. The MEPS estimate includes expenditures for insulin and diabetic supplies totaling nearly $2 billion. MCBS includes insulin in prescription drug expenditures, but excludes diabetic supplies. Insulin purchases do not require a prescription, but a prescription is generally needed to receive third party payments.

Because the focus in this report is on relative utilization by the covered and noncovered populations, whether the MCBS prescription count is complete is less important than whether the possible undercount is more serious for one or the other of these groups. This is difficult to ascertain, however, because of the differences in assignment of coverage status between MEPS and MCBS. MCBS reports more prescriptions than MEPS for beneficiaries without coverage and fewer for beneficiaries with coverage. This is probably partially attributable to the fact that MCBS treats as noncovered some beneficiaries who used prescription drugs and would have been assigned coverage under MEPS on the basis of a third-party payment. Since people with coverage tend to have higher utilizaton than those without coverage, having peole with coverage in the noncovered category will tend to raise estimates of average spending and utilization for the noncovered category.

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