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Rx Cost Concentration in British Columbia: A Study on Chronic Catastrophes in Healthcare

This study by Steve Morgan and Gillian Hanley analyzes the persistence of prescription drug costs among the population of British Columbia. The research delves into the patterns of high-cost users, demographics, morbidity distribution, and the impact of catastrophic coverage policies. Using data from 2001 and 2004, the study sheds light on the complex dynamics of pharmaceutical expenditure and healthcare financing. The findings suggest that high-cost Rx use is influenced by age and morbidity, highlighting the need for appropriate policy interventions.

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Rx Cost Concentration in British Columbia: A Study on Chronic Catastrophes in Healthcare

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  1. Chronic Catastrophes:Concentration and persistence of Rx costs among the population of British Columbia Steve Morgan, Gillian HanleyJune 2008 – AcademyHealth ARM – Washington DC

  2. Motivation • ‘High users’ docs and hospitals = well studied • Prescription drugs need studying because… • Historically less interest • Possibly different patterns of need • Very different systems of financing (growing ‘catastrophic’ coverage in US & Canada)

  3. Data • Administrative records, 2001 and 2004 BC PharmaNet  all prescriptions, all costs, all persons “BCLHD”  vital stats, MD visits, hospital visits, income • ‘Study population’ ~ BC population 3.85 million individuals (who met residency criteria)

  4. Concepts • Classifying Rx use • High cost = top 5% by Rx spending • Medium cost = the next 10% by Rx spending • Low cost = all others with some Rx spending • Non users = all those with no Rx spending • Health status measure • Aggregated Diagnostic Groups [range: 0 to 32 ADGs] • Death

  5. Concentration of spending(year 2004)

  6. Population & spending by Rx user group

  7. Characteristics of Rx user groups(year 2004)

  8. Age distribution within Rx user group

  9. Sex distribution within Rx user group

  10. Income distribution within Rx user group

  11. Morbidity distribution within Rx user group

  12. In-year hospitalization by Rx user group

  13. In-year death by Rx user group

  14. Persistence of spending(year 2001 through to 2004)

  15. Total population

  16. Non-senior population

  17. Senior population

  18. Conclusion • High-cost Rx use appears … … relatively explainable by way of age and morbidity … relatively persistent by way of 3-year follow-up • Are ‘catastrophic’ coverage policies therefore appropriate? (Is the house burning down once, or …?)

  19. Thank you!

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