By Sharmina Manandhar
WASHINGTON – Marylanders continue to spend more on prescription drugs compared to their national counterparts, despite the state’s lower overall health care spending, according to an analysis of state and national health care expenditure data.
Each Marylander spent about $1,000 for prescription drugs in 2007, 33 percent more than the national average of about $750. The state’s per capita spending on health care was about $6,400, 14 percent lower than the national average of about $7,500. However, both statewide and nationally, the share of the prescription drug costs in total health care spending has remained roughly constant over time.
With the economic downturn, high prescription drug spending is a concern for many Marylanders, especially to those who either lack health insurance or have insurance that does not cover prescribed medication.
“The only health insurance that I can afford out of my pocket is the very lowest coverage, and the very lowest coverage does not cover dental or prescription,” said Eric Cathcart, 53, a self-employed Silver Spring resident.
The $1,050 annual, out-of-pocket, prescription drug expense requires him to do “a fair amount of shopping and price comparisons,” he said.
“It’s not a whole lot, but it’s enough of it to go, ‘Do I really need this prescription?'” Cathcart said.
Though private insurance continued to pay for most of the prescription drug cost in Maryland, out-of-pocket expenses ran about 35 percent in 2007.
Cathcart’s 17-year-old son Alex, who was prescribed a $130-a-month behavior modification drug for his Asperger syndrome — an autism spectrum disorder — turned to meditation and green tea because the family could not afford the drug, he said.
Edward Rice, a retired federal employee, tries to lower his medication expenses by taking generic drugs, unless the doctor specifically recommends a brand-name drug “because it is cheaper that way,” he said.
“A chemical is a chemical to me and that’s what drugs are,” said the 73-year-old Indian Head resident.
The efficiency of expensive prescription drugs is a concern for Catonsville resident Theresa Kohlway.
For two years, she took a cancer drug costing about $400 a month, but her oncologist took her off the drug in June because research showed that it helps only 2 percent of patients, according to the 78-year-old breast cancer survivor.
“You go buy what your doctor orders and you find out, my gosh, you are spending so much money on the drug and you don’t even know if it’s working all right,” Kohlway said.
Kohlway, who has Medicare, said that she reaches her $2,000 coverage limit for prescription drugs by June each year. After that, she falls into the “doughnut hole,” a gap in benefits, which causes beneficiaries to pay out-of-pocket for drugs after exceeding their allowances, and before catastrophic drug coverage kicks in.
About 132,000 Maryland seniors fall into a Medicare Part D gap costing them an average of $4,080 per year, according to HealthReform.gov.
Both the House and Senate health care reform bills seek to close the gap by providing 50 percent discounts on brand-name drugs. The House bill passed Nov. 7, 220-215, while the Senate bill is under discussion.
The House bill would lower prescription drug costs, “providing Marylanders — and all Americans — greater access to the life-saving medications they need,” according to Rep. Chris Van Hollen, D-Kensington.
“The bill would improve the Medicare Part D drug program by phasing out the ‘doughnut’ hole; providing Part D enrollees discounts on prescription drugs; and granting the government the authority to negotiate with drug manufacturers to get the best deal possible for beneficiaries,” Van Hollen said in an e-mail message. “In addition, many low-income Americans would benefit from this legislation as they would see increased access to affordable prescription drugs.”
Prescription drug prices are likely to increase under the health bills, said Rep. Roscoe Bartlett, R-Frederick, citing Congressional Research Service and Congressional Budget Office reports.
“Marylanders should be concerned that prescription drugs will cost more if the health care bills being pushed by the president and congressional Democrats become law,” Bartlett said in an e-mail.
Considering one of the health care expenditures, like prescription drug spending, separate from all of the others would not give “an accurate picture,” according to Democratic Sen. Ben Cardin’s spokeswoman Sue Walitsky.
“One important thing to note is that prescription drugs often can be used to shorten hospital stays, prevent surgery or other costly interventions,” Walitsky said.
The state’s higher-than-average prescription drug spending may be explained by many factors, including the higher percentage of insured Marylanders and the large number of federal employees in the state, according to Ben Steffen, director of the Center for Information Services and Analysis at the Maryland Health Care Commission.
People with health insurance, particularly provided by the federal government, enjoy generous drug benefit packages, Steffen said.
About 88 percent of Marylanders had health insurance in 2008. Massachusetts had the highest number of insured with 94.5 percent while Texas had the lowest with 74.9, according to the Census Bureau. An estimated 22 percent of Marylanders, 16 years and older, were employed by the government in 2008, compared to 14.5 percent nationwide.
However, the large number of insured people in Maryland should also lead to higher overall health care costs in the state, according to David Salkever, professor of public policy at the University of Maryland, Baltimore County.
“In general, if people in Maryland have more generous coverage than people in other states, that ought to show up in terms of higher health expenditures, which doesn’t,” Salkever said.
The higher spending for prescription drugs may mean “substitution to outpatient use of drugs,” according to Salkever.
“The total spending in hospitals is somewhat lower per capita than other states,” Salkever said. “To some extent that reflects, basically, a shift in locus of care to less expensive settings such as outpatient settings.”
Hospital care, which represents the largest single category of health care expenditures in Maryland, is about 10 percent lower than the national average, according to the analysis.
Salkever also said that higher prices in the state may not be a factor in the large spending here.
“It’s hard to believe there are differences in prices,” Salkever said. “I doubt there are, because it’s pretty much a national market.”
