The impact of Medicare Part D on healthcare utilization and health of the Medicare beneficiaries

The implementation of Medicare Part D on January 1st, 2006 profoundly influenced the American healthcare system. To better understand the impact of Medicare Part D, this dissertation, using a nationally representative data, examined the effects of Medicare Part D on out-of-pocket cost, emergency room (ER) visits, hospitalization, and general health related utility score among civilian non-institutionalized Medicare beneficiaries. In addition, this dissertation explored potentially different impacts of Medicare Part D on the above outcomes across Medicare beneficiaries with different prior health insurance status.;The primary data were from the Medical Expenditure Panel Survey (MEPS) panel 10 data, which provided detailed patient-level information before and after the implementation of Medicare Part D. Medicare beneficiaries aged 65 and older, excluding those with low-income subsidies and/or Medicaid in 2005, were selected as study subjects. MEPS respondents with age between 55 and 63 years old in 2005 served as control subjects. Raw and adjusted difference-in-differences methods were used to identify the effects of Medicare Part D on the out-of-pocket cost, ER visits, hospitalization, and health utility score among Medicare beneficiaries.;The findings suggested that the Medicare Part D benefit resulted in a significant reduction (22%) in out-of-pocket cost among Medicare beneficiaries from 2005 to 2006. The reduction in out-of-pocket cost varied greatly among Medicare beneficiaries with different prior health insurance coverage. There was no evidence to support that the Medicare Part D benefit decreased ER visits and hospitalization among Medicare beneficiaries. Nor was the Medicare Part D benefit associated with improved health utility score for Medicare beneficiaries.;In conclusion, in the first year following the implementation of Medicare Part D, out-of-pocket costs for prescription drugs was reduced among Medicare beneficiaries. However, there was no evidence that Medicare Part D improved health outcomes of Medicare beneficiaries as measured by reduction in ER visits and hospitalization and improvement in their health utility score. Further research should follow Medicare beneficiaries for a longer period of time after the implementation of Medicare Part D or focus on beneficiaries with diseases that might be more sensitive to Medicare Part D.