While critics are wont to cite Medicare Part D as an expensive Bush handout to drug companies, it has received praise in the past from others. For instance, here is Tyler Cowen:
I’d just like to note that – relative to its reputation – the Medicare prescription drug benefit is one of the most underrated government programs of our time. If the goal is to cut or check Medicare spending, and I think it should be, we should do it elsewhere in the program.
It’s also possible that the prescription drug benefit will do more for peoples’ health (as opposed to their financial security) than will the Obama plan.
However, a new NBER paper suggests that the program increased spending by previously the uninsured without any improvement in health outcomes:
In this paper, we provide an assessment of the effect of Medicare Part D on the previously uninsured…We find that gaining prescription drug insurance through Medicare Part D was associated with an 63% increase in the number of annual prescriptions, but that obtaining prescription drug insurance is not significantly related to use of other health care services or health, as measured by functional status and self-reported health.
In short, what it provided was more medical spending without better health outcomes, what you might call a Hansonian result. I would be curious to know if this changes Tyler’s assessment.
Filed under: Economics, Health Care
