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Health Care Final 10-15-09 -   8.1.a - Prescription Drugs

 
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Health Care Final 10-15-09
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8.1.a - Prescription Drugs

How well does DSHS manage its pharmacy costs?

 
 
 
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Data Notes

Data Source:

AFRS

Measure Definition:

 

DSHS Pharmacy Per Capita Costs Growth, Average Per Capita Costs, and Total Expenditures. Includes amounts paid for drugs for DSHS medical programs clients, Medicare Part D co-payments by DSHS on behalf of eligible clients, Medicare Part D clawback payments by DSHS, and any drug rebate amounts received.
Target Rationale: The Governor's Blue Ribbon Commission on Health Care Cost and Access directed that the rate of growth in total health care spending will be no more than the rate of growth in personal income.

Link to Agency Strategic Plan:

 

The HRSA 2009-13 strategic plan that sets forth as one of its goals that per capita costs growth for DSHS medical programs will be less than the state's per capita personal income growth rate. This service group contributes to the overall per capita costs.
Relevance:   Tracking historical and forecasted expenditures by service group enables HRSA to identify trends and to anticipate, plan for, and better manage projected future costs.
Notes: (optional)
Also Available
Action Plan:

Yes

Extended Analysis: No

 Summary Analysis

Pharmacy per capita costs, at an approximate average of $85 per client per month for SFY 09-11, are projected to constitute an average of 12% of DSHS Medical Programs total expenditures during the same time period. 

After peaking in SFY 2006, the growth in pharmacy per capita costs fell to -1.2% in SFY 2008. The SFY 2006 increase was due primarily to implementation of the Medicare Part D clawback, which required States to make payments to the federal Medicare program for coverage of outpatient prescription drugs for dual eligible clients (i.e., low-income elderly or disabled individuals enrolled in both Medicare and Medicaid), and payment by Washington State of the Medicare Part D copayment for dual eligibles.  

This approximately $26 per client per month increase between SFY 2005 and SFY 2006 for Medicare Part D clawback and copayments was not entirely offset by the $15 (22%) decrease in drug spending during the same period. The negative growth rate between SFY 2007 and SFY 2008 is due to stabilization of the clawback and copayment amounts as well as an increase in drug rebates during the same period.

The forecasted average growth rate in pharmacy per capita costs for SFY 2009-2011 is 2.5%. This does not include the cost-management pharmacy initiatives that are scheduled for implementation on July 1, 2009.