Adverse drug events in the ambulatory setting substantially increase the healthcare costs of elderly persons.

Recent research has warned that the introduction of Diagnosis Related Groups (DRGs) based on hospital treatment decisions will lead to an increase in the rate of marginal procedures and to a resumption of high medical expenditure growth rates. This paper explores the often contradictory effects of the multiple reimbursement incentives created by refinements to the Prospective Payment System (PPS) (principally, the introduction of procedure-based DRGs) on hospital resource allocation. Three effects are examined in the paper: (i) the change in primary or payment-related procedures owing to marginal reimbursement incentives; (ii) the change in secondary or non-payment-related services owing to average price incentives; and (iii) the change in average severity of both medical and surgical admissions. The model suggests that the anticipated positive effect of marginal reimbursement incentives on overall hospital resource use may be offset by several factors, most notably the lower average payment incentives of non-procedural DRGs.

Objectives. To assess the impact of multitiered copayments on the cost and use of prescription drugs among Medicare beneficiaries. Data Sources. Marketscan 2002 Medicare Supplemental and Coordination of Benefits database and Plan Benefit Design database. Study Design. The study uses cross-sectional variation in copayment structures among firms with a self-insured retiree health plan to measure the impact of number of copayment tiers on total and enrollee drug payments, number of prescriptions filled, and generic substitution. The study also assesses the effect of enrollee cost sharing on the cost and use of prescription medications for the long-term treatment of chronic conditions. Data Collection Methods. We linked plan enrollment and benefit data with medical and drug claims for 352,760 Medicare beneficiaries with employer-sponsored retiree drug coverage. Primary Findings. Medicare beneficiaries in three-tiered plans had 14.3 percent lower total drug expenditures, 14.6 percent fewer prescriptions filled, and 57.6 percent higher out-of-pocket costs than individuals in lower tiered plans. They also had fewer brand name and generic prescriptions filled, and a higher percentage of generics. The estimated price elasticity of demand for prescription drug expenditures was À 0.23. Finally, for maintenance medications used for the long-term treatment of chronic conditions, members in three-tiered plans had 11.5 percent fewer prescriptions filled. Conclusions. Higher tiered drug plans reduce overall expenditures and the number of prescriptions purchased by Medicare beneficiaries. Beneficiaries are less responsive to cost sharing incentives when using drugs to treat chronic conditions.

Objective To assess the effects of eLongTermCare (eLTC), a telehealth program implemented by an integrated health system in 45 nursing homes across the Midwest, on the use of acute hospital services and total expenditures for Medicare residents. Data Sources Minimum Data Set, Medicare fee‐for‐service claims, and enrollment data from 2013 to 2018. Study Design We used a longitudinal difference‐in‐differences design to estimate the changes in outcomes for treatment beneficiaries before and after participating in the eLTC program, relative to changes for the matched comparison beneficiaries over the same period. We measured outcomes over a 24‐month follow‐up period, including total Medicare spending, emergency department (ED) visits, hospitalizations, and the likelihood of readmission. Data Collection/Extraction Methods Using administrative data, we identified treatment beneficiaries who stayed at participating nursing facilities during the program period and matched comparison beneficiaries with similar baseline characteristics from non‐participating facilities in the same geographic locations. Principal Findings For long‐term care residents, the eLTC program led to an estimated reduction of 73 ED visits per 1000 beneficiaries (p < 0.01, 8.6% effect) over the two‐year follow‐up period. The estimated effects for this group were concentrated among beneficiaries who entered the nursing home after program startup, with sizable reductions in hospitalizations, ED visits, and spending. For skilled care residents, the program was associated with an estimated reduction of 85 ED visits per 1000 beneficiaries (p = 0.03, 9.7% effect), but had no discernible effect on their hospitalizations or total Medicare spending. Conclusions Telehealth can be a valuable tool for nursing homes to enhance care coordination and provide timely access to care, leading to lower spending for nursing home residents. Future research needs to explore payment methods that encourage telehealth expansion in nursing homes.

Nursing homes are the setting of care for growing numbers of our nation's older people, and adverse drug events are an increasingly recognized safety and quality concern in this population. Health information technology, including computerized physician/provider order entry (CPOE) with clinical decision support (CDS), has been proposed as an important systems-based approach for reducing medication errors and preventable drug-related injuries. This article describes the costs and benefits of CPOE with CDS for the various stakeholders involved in long-term care (LTC), including nurses, physicians, the pharmacy, the laboratory, the payer (e.g., the insurer), nursing home residents, and the LTC facility. Critical barriers to adoption of these systems are discussed, primarily from an economic perspective. The analysis suggests that multiple stakeholders will incur the costs related to implementation of CPOE with CDS in the LTC setting, but the costs incurred by each may not be aligned with the benefits, which may present a major barrier to broad adoption. Physicians and LTC facilities are likely to bear a large burden of the costs, whereas residents and payers will enjoy a large portion of the benefits. Consideration of these costs and benefits suggests that financial incentives to physicians and facilities may be necessary to encourage and accelerate widespread use of these systems in the LTC setting.