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Drugs May Replace Some Hospital Care

Kate Traynor

Hospital costs account for less of total health care spending than in years past, but prescription drug expenses are holding steady, say analysts at the Tufts Center for the Study of Drug Development. 

According to Outlook 2001, a Tufts Center trend analysis, prescription drug costs accounted for less than 10 percent of American health care expenditures last year. The proportion of health care dollars spent on prescription drugs was fairly constant in 1970, 1980, 1990, and 2000. In contrast, expenditures on hospital care decreased steadily during these years, accounting for about a third of health care spending in 2000.

Tufts Center Director Kenneth I. Kaitin, Ph.D., observed that this data may reflect a trend among physicians to use drug therapy as a replacement for traditional hospital care. This cost-shifting, said Kaitin, will likely continue as health care providers attempt to control expenses.

Outlook 2001 predicted that Medicare and Medicaid will make greater use of disease management services for program beneficiaries. Pharmacy benefit managers, said the report, will expand their disease management services and provide more care to Medicare beneficiaries. 

The report also predicted that health care will be the focus of public discussion and legislative action this year, and that concerns over "prescription drug price and payment policies" will increase. States, said the report, will expand their pharmacy-assistance offerings to seniors and disabled residents, particularly if federal legislation for a Medicare outpatient prescription-drug benefit stalls this year.