Experience of State Drug Benefit Programs

Prologue: The federal government's recent flirtation with providing an outpatient drug benefit to Medicare beneficiaries has focused Washington's attention on prescription drugs and the elderly as never before For many years, state governments, which administer Medicaid pharmaceutical benefits and other state-financed drug benefit programs for the elderly, have been experimenting with various quality assurance and cost containment initiatives. Reflecting the importance that states attach to providing outpatient drugs to the poor people who are eligible to receive Medicaid coverage, all but two states (Alaska and Wyoming) offer such drugs, although they are not required to do so by federal law. In this essay, Stephen Soumerai and Dennis Ross-Degnan discuss the diversity and impact of these initiatives and urge that the federal government pay more attention to lessons learned thus far as it seeks to craft new policy in relation to Medicare and Medicaid. They consider the policy implications of recent well-controlled research focusing on two key questions: (1) What are the intended and unintended impacts of drug cost containment policies, particularly for chronically ill elderly? (2) Can inappropriate prescribing behavior be reduced without affecting essential medical care? They argue for an increased federal effort to produce and disseminate rigorous evaluation research on this topic to policymakers and also draw some tentative conclusions on the risks and benefits of several popular cost-sharing, regulatory, and informational interventions. Soumerai and Ross-Degnan both hold doctor of science degrees from the Harvard School of Public Health. They are currently faculty members of Harvard Medical School's Department of Social Medicine and are affiliated with the Program for the Analysis of Clinical Strategies at Boston's Beth Israel Hospital. They lead several federal studies on the relationship between prescription drugs and cost containment, quality of care, and clinical outcomes.