Managing the pharmacy benefit in Medicare HMOs: what do we really know?

An estimated five million Medicare beneficiaries received outpatient prescription drug benefits through Medicare + Choice in 1999. However, little is known about how these benefits are managed or about their effects on costs and quality of care. This exploratory study applies a case-study methodology to four large Medicare health maintenance organizations (HMOs) to identify and assess drug-use management strategies. It also poses a number of important issues for consideration by both policymakers and health services researchers, as the debate rages on over the creation and administration of a Medicare outpatient drug benefit, especially in light of the predilection for the use of private pharmacy benefit managers (PBMs) in many of these proposals.