The impact of Medicare part D on income-related inequality in pharmaceutical expenditure

Natalie Carvalho, Dennis Petrie, Linkun Chen, Joshua A. Salomon, Philip Clarke

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Background: Income-related inequality measures such as the concentration index are often used to describe the unequal distribution of health, health care access, or expenditure in a single measure. This study demonstrates the use of such measures to evaluate the distributional impact of changes in health insurance coverage. We use the example of Medicare Part D in the United States, which increased access to prescription medications for Medicare beneficiaries from 2006. Methods: Using pooled cross-sectional samples from the Medical Expenditure Panel Survey for 1997-2011, we estimated income-related inequality in drug expenditures over time using the concentration and generalised concentration indices. A difference-in-differences analysis investigated the change in inequality in drug expenditures, as measured using the concentration index and generalised concentration index, between the elderly (over 65 years) and near-elderly (54-63 years) pre- and post-implementation of Medicare Part D. Results: Medicare Part D increased public drug expenditure while out-of-pocket and private spending fell. Public drug expenditures favoured the poor during all study periods, but the degree of pro-poorness declined in the years immediately following the implementation of Part D, with the poor gaining less than the rich in both relative and absolute terms. Part D also appeared to result in a fall in the pro-richness of private insurance drug expenditure in absolute terms but have minimal distributional impact on out-of-pocket expenditure. These effects appeared to be short lived, with a return to the prevailing trends in both concentration and generalised concentration indices several years following the start of Part D. Conclusions: The implementation of Medicare Part D significantly reduced the degree of pro-poorness in public drug expenditure. The poor gained less of the increased public drug expenditure than the rich in both relative and absolute terms. This study demonstrates how income-related inequality measures can be used to estimate the impact of health system changes on inequalities in health expenditure and provides a guide for future evaluations.

Original languageEnglish
Article number57
Number of pages11
JournalInternational Journal for Equity in Health
Volume18
DOIs
Publication statusPublished - 16 Apr 2019

Keywords

  • Concentration index
  • Health insurance, prescription drugs
  • Inequality
  • Medicare part D

Cite this

@article{34902a9c967c4cc195fe696d32aed5af,
title = "The impact of Medicare part D on income-related inequality in pharmaceutical expenditure",
abstract = "Background: Income-related inequality measures such as the concentration index are often used to describe the unequal distribution of health, health care access, or expenditure in a single measure. This study demonstrates the use of such measures to evaluate the distributional impact of changes in health insurance coverage. We use the example of Medicare Part D in the United States, which increased access to prescription medications for Medicare beneficiaries from 2006. Methods: Using pooled cross-sectional samples from the Medical Expenditure Panel Survey for 1997-2011, we estimated income-related inequality in drug expenditures over time using the concentration and generalised concentration indices. A difference-in-differences analysis investigated the change in inequality in drug expenditures, as measured using the concentration index and generalised concentration index, between the elderly (over 65 years) and near-elderly (54-63 years) pre- and post-implementation of Medicare Part D. Results: Medicare Part D increased public drug expenditure while out-of-pocket and private spending fell. Public drug expenditures favoured the poor during all study periods, but the degree of pro-poorness declined in the years immediately following the implementation of Part D, with the poor gaining less than the rich in both relative and absolute terms. Part D also appeared to result in a fall in the pro-richness of private insurance drug expenditure in absolute terms but have minimal distributional impact on out-of-pocket expenditure. These effects appeared to be short lived, with a return to the prevailing trends in both concentration and generalised concentration indices several years following the start of Part D. Conclusions: The implementation of Medicare Part D significantly reduced the degree of pro-poorness in public drug expenditure. The poor gained less of the increased public drug expenditure than the rich in both relative and absolute terms. This study demonstrates how income-related inequality measures can be used to estimate the impact of health system changes on inequalities in health expenditure and provides a guide for future evaluations.",
keywords = "Concentration index, Health insurance, prescription drugs, Inequality, Medicare part D",
author = "Natalie Carvalho and Dennis Petrie and Linkun Chen and Salomon, {Joshua A.} and Philip Clarke",
year = "2019",
month = "4",
day = "16",
doi = "10.1186/s12939-019-0955-9",
language = "English",
volume = "18",
journal = "International Journal for Equity in Health",
issn = "1475-9276",
publisher = "Springer-Verlag London Ltd.",

}

The impact of Medicare part D on income-related inequality in pharmaceutical expenditure. / Carvalho, Natalie; Petrie, Dennis; Chen, Linkun; Salomon, Joshua A.; Clarke, Philip.

In: International Journal for Equity in Health, Vol. 18, 57, 16.04.2019.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - The impact of Medicare part D on income-related inequality in pharmaceutical expenditure

AU - Carvalho, Natalie

AU - Petrie, Dennis

AU - Chen, Linkun

AU - Salomon, Joshua A.

AU - Clarke, Philip

PY - 2019/4/16

Y1 - 2019/4/16

N2 - Background: Income-related inequality measures such as the concentration index are often used to describe the unequal distribution of health, health care access, or expenditure in a single measure. This study demonstrates the use of such measures to evaluate the distributional impact of changes in health insurance coverage. We use the example of Medicare Part D in the United States, which increased access to prescription medications for Medicare beneficiaries from 2006. Methods: Using pooled cross-sectional samples from the Medical Expenditure Panel Survey for 1997-2011, we estimated income-related inequality in drug expenditures over time using the concentration and generalised concentration indices. A difference-in-differences analysis investigated the change in inequality in drug expenditures, as measured using the concentration index and generalised concentration index, between the elderly (over 65 years) and near-elderly (54-63 years) pre- and post-implementation of Medicare Part D. Results: Medicare Part D increased public drug expenditure while out-of-pocket and private spending fell. Public drug expenditures favoured the poor during all study periods, but the degree of pro-poorness declined in the years immediately following the implementation of Part D, with the poor gaining less than the rich in both relative and absolute terms. Part D also appeared to result in a fall in the pro-richness of private insurance drug expenditure in absolute terms but have minimal distributional impact on out-of-pocket expenditure. These effects appeared to be short lived, with a return to the prevailing trends in both concentration and generalised concentration indices several years following the start of Part D. Conclusions: The implementation of Medicare Part D significantly reduced the degree of pro-poorness in public drug expenditure. The poor gained less of the increased public drug expenditure than the rich in both relative and absolute terms. This study demonstrates how income-related inequality measures can be used to estimate the impact of health system changes on inequalities in health expenditure and provides a guide for future evaluations.

AB - Background: Income-related inequality measures such as the concentration index are often used to describe the unequal distribution of health, health care access, or expenditure in a single measure. This study demonstrates the use of such measures to evaluate the distributional impact of changes in health insurance coverage. We use the example of Medicare Part D in the United States, which increased access to prescription medications for Medicare beneficiaries from 2006. Methods: Using pooled cross-sectional samples from the Medical Expenditure Panel Survey for 1997-2011, we estimated income-related inequality in drug expenditures over time using the concentration and generalised concentration indices. A difference-in-differences analysis investigated the change in inequality in drug expenditures, as measured using the concentration index and generalised concentration index, between the elderly (over 65 years) and near-elderly (54-63 years) pre- and post-implementation of Medicare Part D. Results: Medicare Part D increased public drug expenditure while out-of-pocket and private spending fell. Public drug expenditures favoured the poor during all study periods, but the degree of pro-poorness declined in the years immediately following the implementation of Part D, with the poor gaining less than the rich in both relative and absolute terms. Part D also appeared to result in a fall in the pro-richness of private insurance drug expenditure in absolute terms but have minimal distributional impact on out-of-pocket expenditure. These effects appeared to be short lived, with a return to the prevailing trends in both concentration and generalised concentration indices several years following the start of Part D. Conclusions: The implementation of Medicare Part D significantly reduced the degree of pro-poorness in public drug expenditure. The poor gained less of the increased public drug expenditure than the rich in both relative and absolute terms. This study demonstrates how income-related inequality measures can be used to estimate the impact of health system changes on inequalities in health expenditure and provides a guide for future evaluations.

KW - Concentration index

KW - Health insurance, prescription drugs

KW - Inequality

KW - Medicare part D

UR - http://www.scopus.com/inward/record.url?scp=85064455385&partnerID=8YFLogxK

U2 - 10.1186/s12939-019-0955-9

DO - 10.1186/s12939-019-0955-9

M3 - Article

VL - 18

JO - International Journal for Equity in Health

JF - International Journal for Equity in Health

SN - 1475-9276

M1 - 57

ER -