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Elderly individuals encompass a diverse population with varying degrees of age-related physiological changes. Defining the elderly presents challenges, as the geriatric population is often arbitrarily categorized as individuals older than 65. However, many individuals in this group lead active and healthy lives, with an increasing number surpassing 85 years and falling into the older elderly category. Physiological changes associated with aging impact performance capacity and homeostatic...

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Does cost sharing really reduce inappropriate prescriptions among the elderly?

Joan Costa Font¹, Marin Gemmill Toyama

¹London School of Economic and Political Science, Houghton Street, London WC2A 2AE, England, UK. j.costa-font@lse.ac.uk

Health Policy (Amsterdam, Netherlands)

|October 5, 2010

Summary

User fees for prescription drugs can reduce inappropriate medication use among seniors. However, the impact of cost sharing on improving prescription drug quality is small, suggesting limited effectiveness of co-payments.

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Area of Science:

Health Policy
Pharmaceutical Economics
Medication Quality

Background:

Improving prescription drug quality is a key health policy objective.
Evidence on effective policy instruments is limited.
Cost sharing's role in ensuring appropriate prescriptions is debated.

Purpose of the Study:

To empirically examine the effect of prescription drug cost sharing on inappropriate medication use.
To assess the impact of user fees on medication-related quality for US seniors.

Main Methods:

Analysis of US senior data from 1996-2005.
Econometric modeling to address sample selection, endogeneity, and unobserved heterogeneity.
Estimation of price elasticity of inappropriate drug use with respect to out-of-pocket drug costs.

Main Results:

A small, negative price elasticity was found between out-of-pocket drug costs and inappropriate prescription use.
User fees were observed to decrease the utilization of inappropriate medications.
The price elasticity for cost sharing was lower than for drugs generally.

Conclusions:

Cost sharing demonstrates a modest effect in reducing inappropriate prescription drug use.
The potential for significant improvements in prescription quality via co-payments appears limited based on the observed elasticity.
Further research may be needed to identify more effective strategies for enhancing medication quality.