Increased Prescription Drug Spending May Reduce U.S. Health Care Costs, Survey Finds

Greater spending on prescription drugs may lead to decreased inpatient hospital and other health care costs, according to a new survey of disease management organizations. The Boston Globe reports that the survey findings suggest that the U.S. health care system, including Medicare, could save money if drug consumption increases (Powell, Boston Globe, 3/13). Researchers at the Tufts Center for the Study of Drug Development surveyed 19 of the 25 leading disease management organizations in the United States, which represent 55% of the roughly 1.5 million people covered by disease management programs. These programs help people with high-cost chronic conditions manage their illnesses, and have become more popular as both insurers and state governments look to reduce health care costs. The study's main findings include:

• Forty-two percent of disease management programs said that increased spending on prescription drugs helps "contain" total health care costs, while 21% said that greater drug spending leads to increases in health care costs, and 37% said that drug spending has "no effect" on total spending.
  
• Seventy-five percent said that increased drug spending increases outpatient and physician costs but lowers inpatient costs (Cohen et al., Impact Report, March/April, 2002).