Study: Medicare drug plan saves hospital costs

(AP) CHICAGO — A new study suggests that Medicare’s 5-year-old prescription drug plan is keeping seniors out of hospitals and nursing homes, saving the federal program an estimated $12 billion a year in those costs.

The savings only offset a portion of the $55 billion a year the government spends on Medicare Part D, as the drug plan is known. But the study’s authors say it means seniors are staying healthier and enjoying a better quality of life.

“This is what people always hope for: If people get drug coverage, they won’t need hospitalization,” said Marsha Gold of the nonpartisan Mathematica Policy Research, who wasn’t involved in the new study. “If it holds up, that’s great news.”

The Harvard analysis, appearing in Wednesday’s Journal of the American Medical Association, found Medicare saved an average of about $1,200 a year for each senior citizen who had inadequate drug coverage before Medicare Part D. Most of the savings came from hospital and nursing home costs.

That translates to an annual savings of $12 billion, experts said.
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