Healthy Skepticism Library item: 19979

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Pauly MV
Medicare Drug Coverage and Moral Hazard
Health Affairs 2004 Jan; 23:(1):113-122
http://content.healthaffairs.org/content/23/1/113.abstract

Abstract:

This paper explores the effect of more extensive drug coverage in Medicare on the use of and spending for prescription drugs and considers whether any additional use is likely to represent satisfaction of previously unmet needs or whether it represents yet more overuse. Reasonable estimates of the effect on spending strongly suggest that the spending increase will be small and that some of it will go to beneficiaries who do not face high financial barriers at present. Thus, from the viewpoint of improvements in health, national spending on drugs, or pharmaceutical firm revenues, effects are small. The effects of such programs on Medicare’s fiscal future are much more important.