Measuring patients' medical care preferences: care seeking versus self-treating.

The objectives of this study were (1) to develop a scale to measure patient preferences for using medical care, (2) to assess the reliability and validity of the scale, and (3) to examine factors predicting preferences. Preferences were defined along a continuum, anchored by self-treating preferences and care-seeking preferences. A 9-item scale was developed and mailed to a random sample of 3500 Wisconsin consumers age 50 and older. Ordinary least squares regression was used to examine whether preferences were predicted by demographic and health status variables. A 56.9% usable response rate was obtained. The Medical Care Preference Scale was unidimensional and had a Cronbach's alpha of 0.879. Younger individuals, women, individuals in better health, and individuals from rural areas had significantly stronger self-treating preferences. Significant correlations between the preference scale and 2 measures of health care utlization provided evidence of predictive validity. Individuals with care-seeking preferences used an average of 1.98 more prescription drugs and had 0.50 more physician visits in the past month than individuals with self-treating preferences. The Medical Care Preference Scale should be a useful tool for research on health care utilization.

Consumer perceptions of risk and required cost savings for generic prescription drugs.

OBJECTIVE: To examine consumer risk perceptions for generic prescription drugs used to treat different types of medical conditions, and to explore the relationship between risk perceptions and the amount of cost savings required before consumers would purchase the generic version of a prescription drug. DESIGN: Cross-sectional mail survey. SETTING: Metropolitan area in central Wisconsin. PARTICIPANTS: Random sample of 500 consumers age 18 and older. INTERVENTIONS: None. MAIN OUTCOME MEASURE: Responses to 16 items on 8-page questionnaire. None. RESULTS: The response rate was 71.4%. The percentage of respondents who perceived that generic prescription drugs were riskier than brand name products varied from 14.2% to 53.8%, depending on the medical condition being treated. Significantly larger cost savings were required for consumers to purchase generic prescription drugs with higher perceived risk. CONCLUSION: Financial incentives to use generic prescription drugs may be successful, even for consumers who perceive generic drugs to be riskier than brand name prescription drugs. As the perceived level of risk increases, larger cost savings are required.

Pharmacy benefit management companies: dimensions of performance.

Research on pharmacy benefit management companies focuses on descriptive accounts of the organizations and the scope of their services. This review provides a critical analysis of publicly available research on contemporary issues surrounding the operations and effects of pharmacy benefit management companies. There has been very little systematic, empirical research on these issues; major questions concerning the impact of pharmacy benefit management companies on quality, costs, and patient outcomes remain unanswered. We analyze what is known and what needs to be known, and we explore major research challenges that lie ahead in the assessment of the pharmacy benefit management company's role in the health care system and in improving the public's health.

Effect of a change in third party reimbursement rate on prescription gross margin.

OBJECTIVE: To measure the effect of a change in an insurance company's reimbursement formula on prescription department gross margins for all prescriptions and subgroups of prescriptions. DESIGN: Retrospective descriptive analysis. SETTING: Wisconsin. PARTICIPANTS: Two units of a chain pharmacy. INTERVENTION: Reimbursement changed from usual and customary price to average wholesale price less 10% plus a $2.00 dispensing fee for single-source products, and maximum allowable cost plus a $2.00 dispensing fee for multisource products. MAIN OUTCOME MEASURE: Gross margins for prescriptions dispensed in the month before and after the reimbursement change. RESULTS: The average estimated gross margin decreased 26.9% after the change in reimbursement, and the effect on the average gross margin for generic prescriptions was nearly twice that of the effect on the average gross margin for brand name prescriptions. The effect of the reimbursement change on different therapeutic classes ranged from an increase of 0.7% in the cardiovascular class to a decrease of 68.2% in the eyes, ears, nose, and throat class. The effect of the reimbursement change was greater for low-cost prescriptions than for high-cost prescriptions. CONCLUSION: The large effect of the reimbursement change, combined with continued growth in third party prescriptions, raises concerns about whether pharmacies can accept third party contracts with low reimbursement rates and still maintain current profitability and service levels.

The association of insurance type with costs of dispensed drugs.

This study examines the association between types of prescription drug insurance coverage and the unit cost of dispensed drugs. Logistic regression and ordinary least squares regression were used to assess differences in the use of brand name and generic drugs and the unit cost of dispensed brand name or generic drugs across four insurance categories: Medicaid, private third party, indemnity, and uninsured. The results show that private third-party and indemnity prescriptions were more likely to be dispensed with brand name drugs. Also, indemnity patients and the uninsured were dispensed brand name and generic drugs with lower unit costs. The findings have ramifications for the design of prescription drug insurance benefits and suggest that physicians may respond to the economic situation of their patients when prescribing drugs.

An internal rate of return approach to investigate pharmacist supply in the United States.

Internal rates of return were used to examine the status of pharmacist supply in the United States between the years 1987-1991. Age-earnings profiles were estimated for pharmacists, college graduates and high school graduates. Rates of return to pharmacists and college graduates were compared and a ratio of the pharmacist rate to the college graduate rate was computed for each year. Results suggest a shortage of pharmacists in the United States. Enrollments in pharmacy schools and adopted changes in the training of pharmacists are discussed in relation to their effects on the pharmacist labour market.

State Medicaid pharmacy payments and their relation to estimated costs.

Although prescription drugs do not appear to be a primary source of recent surges in Medicaid spending, their share of Medicaid expenditures has risen despite efforts to control costs. As part of a general concern with prescription drug policy, Congress mandated a study of the adequacy of Medicaid payments to pharmacies. In this study, several data sources were used to develop 1991 estimates of average pharmacy ingredient and dispensing costs. A simulation was used to estimate the amounts States pay. Nationally, simulated payments averaged 96 percent of estimated costs overall but were lower for dispensing costs (79 percent) and higher for ingredient costs (102 percent).

The cost effectiveness of drug utilisation review in an outpatient setting.

Drug utilisation review (DUR) has been adopted as a mechanism for balancing cost containment and quality in prescription drug programmes. In this article we review published DUR reports in order to examine the cost effectiveness of DUR in an outpatient setting. DUR reports are defined either as DUR studies, which examine patterns of drug use, or as DUR programmes, which examine patterns of drug use and subsequent efforts to alter drug use. An adequate cost-effectiveness analysis (CEA) is defined as one that used multiple methods to measure and evaluate patterns of drug use, and/or efforts to alter drug use, and that also performed an analysis of the costs of the review or intervention methods employed, with a focus on efficiency. DUR studies and programmes that satisfied all the criteria and thus fit the framework for conducting CEA were included; others that satisfied only some of the criteria were examined for the insights that they could contribute to a study of costs relative to outcomes. We identified 14 reports that could be categorised as DUR studies. Only 3 of these examined more than 1 method of measuring and evaluating drug use, thereby potentially fitting the CEA framework, but none included a cost analysis. Of the other DUR studies, only 1 contained estimates of costs for the DUR method employed, but since it examined only 1 DUR method it did not satisfy the criteria for an adequate CEA. Although such studies provide information about different methods of identifying drug use patterns (a somewhat intermediate outcome), they do not provide insight into the cost effectiveness of methods designed to influence drug use. We identified 34 reports of DUR programmes. Only 5 of these reports fit the CEA framework; they examined multiple efforts to change drug use patterns (after identifying drug use patterns). None of them satisfied the criteria for an adequate CEA; in 3 of the reports no costs were provided, and the other 2 provided only partial input costs or costs for only some of the interventions designed to change drug use. DUR programmes were grouped by drug or drug use issue in an attempt to gain insights by comparing reports on similar drugs. The drugs or drug classes and number of reports reviewed were: cephalosporins (3); chloramphenicol (3); antiulcer drugs (2); dextropropoxyphene (2); tranquillisers (benzodiazepines) {3}; anti-infective agents (5); 'all drugs' (7); and other drugs/miscellaneous (9).(ABSTRACT TRUNCATED AT 400 WORDS)

Drug product management in health maintenance organizations.

A national mail survey of drug product management in health maintenance organizations (HMOs) is described. The survey covered 570 HMOs--502 by questionnaires mailed to pharmacy directors at individual independent and multistate HMOs and 68 represented by six executives of multistate HMOs who agreed to report aggregate data for their HMO operations. Responses for 180 individual HMOs were received (36% response rate); four of the six multistate HMO executives returned aggregate data. Individual HMO respondents reported using the following methods of drug product management: formularies, 66% (of these, 60% reported using a restrictive formulary or a restrictive formulary with exceptions); MACs, 54%; prior authorization, 44%; contracts for co-marketed and single-source drug entities, 46% for each. Almost all HMOs with contracts also had exclusive or preferred status for dispensing or reimbursement of some drug products. Most HMOs received discounts, manufacturer's value-added services, price protection, rebates based on market share, and rebates based on use as contract incentives; discounts and rebates based on use were chosen as the most preferred incentives. Established methods of drug product management, such as formularies and MACs, were most commonly reported by HMOs; however, nearly half reported using new approaches, including contracts with manufacturers, incentives, such as discounts and rebates based on use, and exclusive or preferred status.

The effects of an internal analgesic formulary restriction on Medicaid drug expenditures in Wisconsin.

The effects of removing propoxyphene napsylate products from the Wisconsin Medicaid drug program formulary were examined. Internal analgesic expenditures and usage data for 3-month periods before and after the removal were compared (April through June 1984 versus the same period in 1985). After adjusting for price and reimbursement changes between the two study periods, overall expenditures were slightly higher after removal of these products. Expenditures per recipient, prescription, and unit all increased, as did the number of prescriptions per recipient. Expenditures, prescriptions, and recipients increased more for propoxyphene hydrochloride products as substitutes for propoxyphene napsylate products than for products in any other category. Increases also occurred for nonsteroidal anti-inflammatory products, suggesting they may have been chosen as replacement therapy. The proportion of napsylate prescriptions converted to hydrochloride prescriptions was larger for institutional patients than for noninstitutional patients. Although program expenditures did not decrease, as intended by the formulary change, other qualitative outcomes also should be considered, such as any therapeutic advantages the replacement products may have had for the patients.

Assessing potential prescription reimbursement changes: estimated acquisition costs in Wisconsin.

Potential impacts from two methods of changing prescription drug ingredient reimbursement in the Wisconsin Medicaid program were estimated. Current reimbursement amounts were compared with those resulting from either direct prices for eight manufacturers' products and average wholesale price less 10.5 percent for other products or wholesaler cost plus 5.01 percent for all products. The resulting overall average ingredient cost reimbursement reductions were 6.64 percent ($0.56 per prescription) and 6.94 percent ($0.59 per prescription) for the two methods, respectively. The results should be viewed from the perspective of both program savings and reduced pharmacists' revenues.

Changes in market shares for internal analgesic products after a Medicaid formulary restriction.

The effects of a Medicaid formulary restriction, adding propoxyphene napsylate to a Negative Drug List, were examined. The market shares of products in subgroups of the internal analgesic therapeutic category were compared for periods before and after the restriction. Data from Wisconsin Medicaid Management Information System claims records were analyzed to determine changes in the percent of recipients, prescriptions, and expenditures. For both noninstitutional patients, the market shares held by propoxyphene napsylate primarily were shifted to propoxyphene hydrochloride products. Secondarily, market shifts to nonsteroidal anti-inflammatory drugs (NSAIDs) occurred, and this effect was more pronounced for noninstitutional patients. The formulary restriction most affected the firm that solely marketed propoxyphene napsylate products prior to the change, since that entire market share was redistributed to other products.

Quantifying unused orders for as-needed medications.

Nonuse of as-needed (p.r.n.) medication orders in a university hospital was quantified. A total of 882 patient charts for the last six months of 1984 were reviewed (seven randomly selected patients per month from each of 21 medical-surgical services). Orders for p.r.n. medications were quantified by therapeutic category and by whether the order was written on admission. Use or nonuse of orders was determined from pharmacy records of doses administered. Of 7735 p.r.n. orders, 4793 (62%) were unused. By therapeutic category, antacids were the least prescribed p.r.n. medications but also had the highest rate of nonuse. In every therapeutic category, the rate of unused orders was higher for orders written on the day of admission than for subsequent orders. By patient's medical-surgical service, the percentages of p.r.n. orders unused ranged from 50% for renal transplant patients to 81% for ophthalmology patients. Nonuse of p.r.n. medications in all therapeutic categories decreased as length of stay increased; the overall rate of nonuse was 80% for patients hospitalized for two days or less. Reduction of the number of p.r.n. orders written but not used should begin in two areas: orders written on day of admission, and orders for patients with short hospital stays.

Selecting health insurance: the importance of prescription drug coverage and pharmacy factors in consumer decision making.

This study determined how important prescription drug coverage was to consumers in selecting their health insurance plans, the specific pharmacy factors they considered, and the importance of factors considered. A mail survey questionnaire was sent to 800 state government and university employees residing in the Madison, Wisconsin area; 453 questionnaires were returned. The majority (59.0 percent) of respondents aware of health insurance prescription coverage placed at least moderate importance on that coverage when selecting their health insurance plan. The specific factors considered most often were cost, location, convenience, and flexibility to choose or change pharmacies. The importance ratings for cost, location, flexibility, and the pharmacist varied among respondents enrolled in different health insurance plans.

Estimating pharmacy level prescription drug acquisition costs for third-party reimbursement.

Accurate payment for the acquisition costs of drug products dispensed is an important consideration in a third-party prescription drug program. Two alternative methods of estimating these costs among pharmacies were derived and compared. First, pharmacists were surveyed to determine the purchase discounts offered to them by wholesalers. A 10.00% modal and 11.35% mean discount resulted for 73 responding pharmacists. Second, cost-plus percents derived from gross profit margins of wholesalers were calculated and applied to wholesaler product costs to estimate pharmacy level acquisition costs. Cost-plus percents derived from National Median and Southwestern Region wholesaler figures were 9.27% and 10.10%, respectively. A comparison showed the two methods of estimating acquisition costs would result in similar acquisition cost estimates. Adopting a cost-plus estimating approach is recommended because it avoids potential pricing manipulations by wholesalers and manufacturers that would negate improvements in drug product reimbursement accuracy.

Use of a Medicaid database to analyze pharmaceutical services in long-term-care facilities.

A profile of Wisconsin pharmacies that provide services to Medicaid recipients in long-term-care facilities (LTCFs) was developed, and the relationships among pharmacy characteristics and drug use and reimbursement for pharmaceutical services in these pharmacies were studied. Computer-generated reports of Medicaid claims of all pharmacies that had received $1000 or more for services provided to LTCFs from July through September 1984 were included in the study; these claims were submitted by 255 pharmacies on behalf of 32,410 recipients. The reports contained the following individual pharmacy data: geographic location, total dollar payments, total number of Medicaid recipients served, percentage of recipients residing in LTCFs, total number of payments from Medicaid for prescriptions, amount paid to the pharmacy for LTCF recipients as a percentage of total payments, percentage of prescriptions paid at the unit dose rate, and average number of prescriptions and cost per LTCF recipient. An average of $137.30 per recipient was reimbursed, representing an average of 12.3 prescriptions per recipient. The average number of prescriptions per recipient did not vary among pharmacies on the basis of unit dose or traditional distribution system, vendor-consultant status of the pharmacist, location of the pharmacy, or the proportion of LTCF claims to total Medicaid prescription claims. The average amount paid per recipient was related to the average number of prescriptions per recipient, the use of a unit dose system, and the proportion of nursing home claims to total claims submitted. A Medicaid database can be useful for characterizing pharmaceutical services and drug use in LTCFs.

Health professional students' and faculties' perceptions of pharmacists as measured by a cartoon technique.

Perceptions of pharmacists' roles held by health professional students and faculty were evaluated by a projective cartoon technique. Cartoons of a pharmacist, a pharmacist and a physician, and a pharmacist and a nurse, all at a patient's bedside, were used as the survey instruments. From the dialogue provided by respondents in the cartoon conversational balloons, perceptions of the type of interaction, relationship between the figures, and pharmacists' role activities were determined. The survey was given to the entire student body and the faculty in three professional colleges (pharmacy, nursing, and medicine) of The University of Texas. The overall response rate was 34.2%. In response to the pharmacist-patient cartoon, pharmacists were depicted as independently consulting patients about their medications and monitoring their therapy. Some nursing and medical respondents stated that they had never seen a pharmacist at a patient's bedside. Responding to the pharmacist-physician cartoon, pharmacists' interactions with physicians were depicted as involving specific patient therapy and seemed to suggest a peer relationship. Pharmacy and medical respondents perceived clinical roles for the pharmacist. In response to the pharmacist-nurse cartoon, traditional roles were illustrated for the pharmacists, and subordinate-authoritative relationships were seen in the interactions between pharmacists and nurses. The cartoon technique appeared to be useful in determining role perceptions.

Operational characteristics of hospital pharmacies in Indiana--1976 vs. 1981.

The operating characteristics and services provided by hospital pharmacies in Indiana were determined. Survey questionnaires were mailed to the pharmacy director for each of the 120 licensed hospitals in Indiana; 62 responded. Pharmacy departments were open an average of 106.3 hours weekly, 51 pharmacies maintained patient profiles, and 29 pharmacies used unit-dose for all beds. Involvement in preparing I.V. solutions was reported by 67.7% of the pharmacies. The mean number of total pharmacy staff (FTEs) reported was 17.1. The ratio of staff FTEs per patient day was larger for pharmacies using a unit-dose distribution system. The most commonly provided clinical services were drug consultation with nursing, drug utilization review, and inservice education. Ratios of average dollar drug inventory and operating expenses per patient day indicated that larger hospitals were more effective with inventory control, but had higher expenses per patient day.