Mar 2, 1987 - Abstract: In order to put Pennsylvania's Pharmaceutical Assist- ance Contract for ..... Harrisburg: Pennsylvania Department of Aging, 1984. 5.
State-Level Pharmaceutical Assistance Programs for the Elderly: A National Survey GRETA L. BERRY, MS, MICHAEL A. SMYER, PHD, AND DAN LAGO, PHD Abstract: In order to put Pennsylvania's Pharmaceutical Assistance Contract for the Elderly (PACE) Program in a national context, a nationwide mail survey and telephone follow-up to each ofthe 58 State Unit Directors on Aging in the United States and its territories identified 10 programs. The results reported in this article are specific to the seven state-level pharmaceutical assistance programs which were in operation during the fiscal year 1984-85. In general, the programs varied on select
program characteristics and on their efforts to address major policy issues. Data from the non-program states indicated support, legislative efforts, and a high interest in fiscal concerns. The findings reflect a lack of program uniformity and have implications for program development and implementation. Suggestions on how to identify the "optimum" or best combination of program and policy options are discussed. (Am J Public Health 1988; 78:157-160.)
Introduction
states and territories, although we appreciate the legal and cultural differences represented by the two terms.) States that did not have programs were retained in the survey to obtain information on both the purposes for and the barriers to the development and implementation of such programs. Information on the political atmosphere of the non-program states regarding the concept of pharmaceutical assistance for the elderly also was collected. Silverman and Lydecker identified nine major policy issues and/or options which can be used to comprehensively characterize any prescription cost coverage program and/or insurance plan.7 These policy issues involve the selection of beneficiaries and covered medicine products, cost and reimbursement, data management, and program quality control. Decisions on these policy areas are expected to have their greatest impact on the providers of medicines such as community pharmacies, discount houses, mail-order pharmacies, dispensing physicians, and outpatient pharmacies in hospitals, as well as on the elderly program participants. Appendix A summarizes the program options relative to the nine policy issues. The Silverman and Lydecker policy issues, along with a modified version of a 21-item questionnaire** on state-level pharmaceutical assistance programs for the elderly, were used to structure the survey instrument. This modified questionnaire included items that elicited information on selected policy issues and on specific program characteristics and provided additional comparative data on budgeting and political factors (e.g., legislation and support). The questionnaire was sent to each of the 58 state unit directors on aging with instructions to have the appropriate individual complete the questionnaire. Due to the nature of the data, univariate statistical procedures were used in the data analysis.
During the past decade, public attention has been focused on our nation's growing number of elderly. The increase in the number of elderly has been associated with an increase in the prevalence of chronic illnesses and in turn an increase in the demand for long-term care."3 These demographic and health trends have provoked policy makers and researchers to examine alternatives to the traditional methods of providing care to the impaired elderly.4 The need for increased individual responsibility, family support, and state and local programming has been emphasized.5 The current emphasis on community-based long-term care has generated interest in the role of pharmaceuticals in the care of the elderly. Although, Medicare and Medicaid programs supply assistance to most states for certain categories of people in need, in 1980, only 60 per cent of the cost for physician services and 13 per cent of the cost for medications were paid from public funds.6 Concerns over the increased medicine use among the elderly and the expensive costs of medications generated state-level pharmaceutical assistance programs to respond to these issues. The survey reported here was part of a larger study* which focused on Pennsylvania's Pharmaceutical Assistance Contract for the Elderly (PACE) Program. To put the PACE Program in a national context, a study was undertaken to compare the PACE Program to similar state-level pharmaceutical assistance programs with respect to major policy issues and to specific program characteristics (e.g., organization expenditures, source of revenue, etc.). Method The study's survey sample frame included all state-level units on aging in the United States and its territories (N = 58), which might have access to information on pharmaceutical assistance programs for the elderly in their states. (Throughout this article, we will use the term "state" to refer to both From the Medicine, Health, and Aging Project, Pennsylvania State University. Address reprint requests to Michael A. Smyer, PhD, Medicine, Health and Aging Project, College of Health and Human Development, Pennsylvania State University, 105 Amy Gardner House, University Park, PA 16802. This paper, submitted to the Journal March 2, 1987, was revised and accepted for publication May 20, 1987.
*Smyer M, Lago D, Ahern F, Goodfellow M, Associates: Medicine, Health, and Aging: Enrollment in Pennsylvania's Pharmaceutical Assistance Contract for the Elderly (PACE) Program (Report, Vol. II). University Park, PA: The Pennsylvania State University Gerontology Center and the Pennsylvania Department of Aging, 1986. C 1988 American Journal of Public Health 0090-0036/88$1.50
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Results
The findings represent data requested from the state programs for the fiscal year 1984-85 as provided by program staff and obtained during a four-month data collection period (August 1985-December 1985). Of the 58 states and US territories, 50 states and 5 territories responded to the mail survey, a return rate of 95 per cent. Ofthe 55 completed surveys, seven states/territories reported currently having a pharmaceutical assistance program (Pennsylvania, Delaware, Maine, New Jersey, Maryland, Montana, Guam), and three states (Connecticut, Illinois, Rhode Island) reported that their program would start either in late 1985 or 1986. The program data reported here **Fink J: Unpublished data on a survey of state-level pharmaceutical assistance programs for the elderly during 1980. Philadelphia College of Pharmacy and Science, 1980. 157
BERRY, ET AL. TABLE 1-Selected Program Characteristics of Seven State Pharmaceutical Assistance Programs, for Period July 1, 1984-June 30, 1985
Elderly and/or
Elderly Program Characteristics Year Program Started Estimated Number Persons Eligible Number Persons Enrolled Per Cent of Population Eligible Enrolled* Providers in Program
Community-based Pharmacy
PA
Disabled
DE
ME
1984
1981
1977
751,000a 380,000 50.0
25,000 8,500
24,000 24,000
34.0
100.0
Yes No No No No
Institutional Pharmacy Dispensing Physician Private Foundation Pharmacist under Contract How Program Financed
Yes Yes Yes No No State lottery
No No No Yes No Private foundation
Estimated Program Expenditure per Enrollee (Dollars)
$165.17b
$117.65
General fund $68.83
NJ
Medically Indigent GU
MD
231,415
Unknown
1984 250 250 100.00
1979 Unknown 13,099 Unknown
1937 Unknown Unknown Unknown
Yes Yes No No No General fund & casinos
Yes Yes No No No Local funds
Yes Yes Yes No No General funds
Yes Yes Yes No No Federal & state funds
$305.34
$120.72
$343.00
Unknown
1975 Unknown
MT
aBased on 1980 census data. 'Computed from information provided. bAmount includes one-time start up costs and public information campaign, both of which were disproportionately large. PA = Pennsylvania DE = Delaware ME = Maine NJ = New Jersey GU = Guam MD= Maryland Ml = Michigan
are only from the seven states which had a program in operation during the data collection period. Program Characteristics
Table 1 profiles the ongoing programs in terms of size, and administrative and cost issues. The earliest date reported for the implementation of a state-level pharmaceutical assistance program was 1937 and that for a program exclusively for the elderly was 1975. Administratively, the majority of the state-level programs were under the auspices of departments or offices of aging or elderly affairs, with human, health, or social services agencies ranking second, and a revenue bureau being third. Major Policy Issues Adhering to Silverman and Lydecker's analysis of policy issues (Appendix), the following observations can be made: * Selection of beneficiaries: The beneficiaries of the statelevel pharmaceutical assistance programs were the elderly only, the elderly and/or disabled, and the medically indigent (Table 2). For the majority of the programs, income level was a limiting factor for eligiblity. The majority of the state-level programs required documentation of age, income, residency and, where
appropriate, disability. * Selection of covered drug products: The majority of the programs reimbursed payment for legend drugs, generic drugs, and insulin (Table 3). None of the states reimbursed payment for non-prescription medicines. At the time of the survey, only two states reimbursed payment for mail-order prescriptions. Most of the states reported using a formulary of compensable medicine products. * Cost-sharing by patient: Typically, the patient is obligated to pay an out-of-the-pocket share of the cost, to reduce program expenditures and to discourage over-utilization. The cost-sharing approach used most by the state-level pharmaceutical assistance programs was the fixed co-payment (Table 2). However, limitations on the dosage per claim were evenly distributed among the states. * Reimbursement for dispensing cost by pharmacist: It 158
is presumed that the mark-up or fee covers the costs of full pharmaceutical services. Reimbursement plans for the pharmacist or physician processing fee were reported by six states (Table 2), ranging from $2.75 to $3.53. * Data processing: The means for transmitting claims affect not only programs costs, but possible lag in reimbursement and the prompt and accurate provision of data for utilization review. Over one-half of the states maintained the capability of generating a drug use profile for each enrollee
(Table 2). * Control of program quality: This effort is usually focused on the program's utilization review process and overall regulation and processing procedures. For most of the states, quality control was the responsibility of program staff. All of the states had some form of utilization review. Political Attitudes and Efforts
Forty-five non-program states and US territories provided information to address the issue of purposes for and barriers to the development and/or implementation of these types of programs. At the time of data collection, bills proposing a pharmaceutical assistance program for the elderly were being debated in only three state legislatures. Twenty-six of the 45 responding non-program states indicated that they supported the concept of pharmaceutical assistance for the elderly, with only a small number indicating non-support (Table 4). The most frequently cited reason for state support of the concept was to defray the elderly's high cost for medicines; the reasons for opposition varied. Discussion A national survey in the latter half of 1985 revealed that only 10 states have state-level pharmaceutical assistance programs for the elderly, with the Pennsylvania Pace Program being the largest. There is a great deal of heterogeneity of implementation and operation of such assistance programs.
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STATE PHARMACEUTICAL ASSISTANCE PROGRAMS FOR ELDERLY TABLE 2-Major Policy Issues, July 1, 1984-June 30, 1985 Elderly and/or Disabled
Elderly Program Issuesa
PA
DE
ME
Medically Indigent
NJ
GU
MD
MT
Selection of Beneficiaries Age Income Single Couple Residency Disability
65+
65+
62+
65+
Any age
Any age
Any age
$12,000
$6,730
$6,200 $7,400 Resident SSI Recipient
$13,250 $16,250 30 days
$4,920 $6,504 Resident
$5,600 $6,200 Resident
$3,768 $7,400 Resident
Selection of Covered Drug Products Formulary of Compensable Drug Products Cost-Sharing by Patient Cost-Sharing Plan
Compulsoryb
Voluntary
Compulsory
Compulsory
Fixed copayment
Annual deductible % cost fee
Fixed copayment Fixed copayment fee sharing
$15,000
$9,575
90 days
Maximum Dosage per Claim
Resident
30-Day orc 100 doses
Compulsory Voluntary
Sliding
100-Day supply
30-Day supply
Reimbursement Policy Issues Pharmacist and/or Physician Processing Fee $2.75 No $3.20 Reimburse Payment for Mail Order Prescriptions Noe Yes No Data Processing Drug Use Profile On-line On-line, archived, On-line data demographic demographic, base & drug use & drug use information information &
Compulsory
Fixed copayment Fixed copayment
costsharing
60-Day
Minimum Dosage per Claim
100-Unit doses or 30-day supply
$3.53
$2.75
$3.45
$2.00d
No
No
No
Yes
On-line data base
No
No
No
Staff Contractor Contractor Staff Staff/Contractor
Staff Staff Staff Contractor Staff
Staff Staff Staff Staff Staff
Contractor Contractor Staff Staff Staff
available to outsiders
Control of Program Quality Processing Applications Processing Claims Reimbursing Providers Quality Control Utilization Review aPolicy issues
Disabled & 18+ years
Contractor Contractor Contractor Staff/Contractor Staff/Contractor
Staff Staff Staff Staff Staff
Contractor Contractor Contractor Not Reported Staff
identified by Silverman and Lydecker (1977)
bCardholder must also pay difference between generic and brand name medicines when generic is allowed by prescriber
cWhichever is less for chronic medicines; 15 days for acute Incorporated within the drug formulary
d$2.00 $3.75 RX based on completion of cost survey
eAct 27: Mail Order Prescription Amendment was passed on June 26, 1985 but was not effective until January, 1986
TABLE 3-Medicine and Medical Supplies Reimbursements by Program Category July 1, 1984-June 30, 1985
Elderly Medically Indigent
Elderly Only and/or Product
Federal Legend Drugs
Non-Prescription (OTC) Insulin Glasses, Hearing Aids Other Diabetic Testing Materials Dental Services Selected Therapeutic Categories (e.g., Cardiovascular, diabetic) Needles, Syringes
Disabled
PA DE ME
NJ
GU
MD
MT
X
X
X
X
Xa
X
X
X
X X
X
X
X X
X
X
-
-
-
-
-
-X x
-
-
-
X
Xb
aGuam reimburses payment for only brand name federal legend drugs binsulin only
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Two policy issues in particular-income eligibility requirements, and the pharmacist/physician despensing fees-have the greatest impact on cost. By raising the income criterion, for example, a state might generate a large number of eligible persons, while a state with a low-income criterion may make a relatively small number of persons eligible participants. Concerns such as these emphasize a need to identify the "best combination" of options balancing fiscal and therapeutic efficacy in order to best serve the medical needs of older adults. At present, there are several different approaches to trying to meet the needs of older adults for assistance in managing the high costs of medicines. Program cost and efficacy issues reflect an even greater need to establish standardized data management procedures and medicine use profiles. Such a profile should enable the integration of research on operational issues to identify effective and efficient models of program implementation. In addition to operational issues, research should be conducted to address general issues such as the role of pharmaceuticals in longterm care of the elderly and specific ones such as medicine use and misuse among the elderly. To date there is no joint 159
BERRY, ET AL. TABLE 4-Political Attitudes among 45 Non-Program States, July 1, 1984-June 30, 1985 Number (Total N:45)
Support/Non-Support of State-Level Pharmaceutical Assistance Concept Support concept Do not support concept Have not yet taken a position Have never discussed/considered the issue Did not respond to this question Reason for Supporting Concept 15 Defray high cost of prescriptions for the elderly Reduce premature nursing home care State sponsor other programs discounting prescription costs Utilization control Reason for Opposition to Concept Other elderly priorities Program too expensive No funding Not pharmaceutical by itself Would not benefit prescribing & usage patterns There are other programs covering this issue Other health care systems should be responsible and not the state
fiscal, and medical judgments about the most appropriate way to maintain older adults' independence through prescription medicines. Additional work still remains for both policy makers and researchers to effectively assess the contribution of such programs to the long-term well-being of the elderly. ACKNOWLEDGMENTS
26 4 9 2 4
Grant Acknowledgment: The results reported here were made possible by the efforts of a group of investigators (M. Smyer, F. Ahern, and D. Lago) at Pennsylvania State University in collaboration with the Pennsylvania Department of Aging supported by the Medical Trust, one of the Pew Charitable Trusts of Philadelphia. The investigators gratefully acknowledge the advice of: P. Lamy, University of Maryland; W. Ray, Vanderbilt University; J. Roberts, Medical College of Pennsylvania; and W. Simonson, Oregon State University. An earlier version of this article was presented at the 39th Annual Meeting of the gerontological Society of America November 20, 1986, Chicago, Illinois.
1 1 2
REFERENCES
2 1 1 1 1 1
1
research effort or formal data-sharing among the various state programs; a standardized data management profile would make research collaboration both practical and desirable. In summary, the data reported here represent the current array of state-level pharmaceutical assistance programs for the elderly. Each program represents a combination of political,
1. Rice D: Health Care Needs of the Elderly. In: Harrington C, Newcomer D, Estes C, Associates (eds): Long-Term Care of the Elderly, Beverly Hills: Sage, 1985. 2. US Senate Special Committee on Aging: the American Association of Retired Persons: Aging America: Trends and Projections. Washington, DC: AARP, 1983. 3. Vladeck B, Firman J: The Aging of the Population and Health Services. Ann Am Acad Polit Soc Sci 1983; 468:132-143. 4. Pennsylvania Department of Aging (PDA): Long-Term Care Needs of Older Pennsylvanians. Harrisburg: Pennsylvania Department of Aging, 1984. 5. Benjamin A: Community-Based Long-Term Care. In: Harrington C, Newcomer D, Estes C, Associates (eds): Long-Term Care of the Elderly, Beverly Hills: Sage, 1985. 6. Lamy P: Prescribing for the Elderly. Boston: John Wright, 1980. 7. Silverman M, Lydecker M: Drug Coverage under National Health Insurance: The Policy Options. DHEW Pub. No. HRA 77-3189. Washington, DC: Govt Printing Office, 1977.
APPENDIX Summary of Pharmaceutical Assistance Program Policy Options
Policy Issues
Selection of Beneficiaries
Selection of Covered Drug Products
Cost-Sharing by Patient
Reimbursement for Acquisition Cost Reimbursement for Dispensing Cost Alternative Reimbursement Approaches Reimbursement Methods Data Processing
Control of Program Quality
160
Program Options -age eligibility requirement -income eligibility requirement -residency eligibility requirement -disability eligibility requirement -legend drugs -non-prescription drugs -generic substitutions -insulin -glasses and hearing aids -health care supplies -compulsory formulary -voluntary formulary -mail-order prescriptions -fixed co-payment -fixed co-insurance -annual deductible -sliding cost-sharing (sliding fee scale) -fixed percentage of drug cost -limitation on number of days supply per prescription -combination of above -pharmacistphysician processing fee -pharmacisVphysician processing fee -usual or customary retail price -capitation system -contract between pharmacist and program -cash payment to patient -casy payment to pharmacist -payment of drugs purchased by government -on-line database -archived database -data include participant and drug use descriptive information -database available to other program personnel -manual data processing -utilization review -no utilization review
AJPH February 1988, Vol. 78, No. 2
