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February 23, 2012

Research Notes

Cost makes regional Medicare drug spending vary

It’s mainly the use of more-expensive brand-name drugs, not the amount of drugs prescribed, that causes regional variations in Medicare’s subsidized prescription drug program costs.

In a study, led by Graduate School of Public Health (GSPH) faculty member Julie M. Donohue and published in the Feb. 9 New England Journal of Medicine, researchers said that more efficient prescribing practices could have saved the Medicare program and its beneficiaries $4.5 billion.

They suggest that increased use of lower-cost generic medications could substantially reduce drug spending and beneficiary out-of-pocket costs without compromising quality of care or health.

The research suggests the Medicare Part D benefit design, which promotes cost-sharing and utilization management, may be an important tool for boosting the use of generic drugs in the program and saving money, particularly in high-cost regions, said Donohue, a GSPH faculty member in health policy and management. “Promoting the use of generics could greatly lower out-of-pocket costs for patients and save Medicare money. Lower costs could potentially lead to improved adherence to medication regimens, which in turn would lead to overall improvements in health,” Donohue said.

Studies have shown differences in Medicare drug spending across the United States, but the reasons behind those differences were not well understood. Donohue’s team examined 2008 Medicare data for 4.7 million beneficiaries. In addition to studying overall medication use, they looked at three drug categories widely prescribed to the elderly: blood pressure medications, cholesterol-lowering statins and newer antidepressants. The data were analyzed across hospital referral regions and adjusted for demographic, socioeconomic and health status differences. The studies found the mean adjusted per-capita pharmaceutical spending ranged from $2,413 in the lowest hospital referral region to $3,008 in the highest.

More than 75 percent of that difference was due to the cost per prescription ($53 versus $63). However, the data indicated differences in the role of volume versus cost depending on the drug class studied. For example, the cost per prescription was the most important factor for medications used to treat hypertension and high cholesterol while the differences in volume were more important in the costs of antidepressants.

“The preference to use antidepressants among the elderly may vary by region, which may account for some of the difference the research found in this drug class compared to the other two studied,” Donohue said.

Pitt collaborators included Walid F. Gellad and Joseph T. Hanlon of the Department of Medicine.

The study was supported by the National Institute on Aging, the Agency for Healthcare Research and Quality, the National Institute of Nursing Research, the National Institute of Mental Health, the Robert Wood Johnson Foundation and the Veterans Affairs Health Services Research and Development Service.

Credit card security improved

Researchers from the Swanson School of Engineering have come up with a new credit card design that allows a card to turn on and off to guard against fraud and theft.

Near-field communications (NFC) and radio frequency identification (RFID) technologies allow consumers to wave rather than swipe credit cards through a machine when making purchases or bank withdrawals. But with the convenience comes the risk of theft and fraud because RFID tags and NFC credit cards can operate any time they’re placed in an electromagnetic field.

That can be dangerous, noted Marlin Mickle, the Nickolas A. DeCecco Professor of Engineering and executive director of the RFID Center for Excellence in the Swanson School. Thieves can buy portable readers for just a few hundred dollars, making it possible to simply pass a reader near an NFC credit card and charge purchases to it or extract cash from a bank account.

“Our new design integrates an antenna and other electrical circuitry that can be interrupted by a simple switch, like turning off the lights in the home or office,” said Mickle. “The RFID or NFC credit card is disabled if left in a pocket or lying on a surface and unreadable by thieves using portable scanners.”

With this new technology, consumers would simply hold RFID or NFC credit cards in a specified area that serves as a switch — for example, an emblem or other mark — when making a transaction. As long as the “switch” is held, the card is “on.” When the contact is discontinued, it automatically turns off.

“This solution is simple and very inexpensive to integrate into the RFID and NFC credit card manufacturing process,” Mickle said. “We have filed a patent application and hope to see the technology quickly adopted, once approved.”


The University Times Research Notes column reports on funding awarded to Pitt researchers as well as findings arising from University research.

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