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Licensed Unlicensed Requires Authentication Published by De Gruyter November 7, 2014

Patient Outcomes and Cost Effects of Medicaid Formulary Restrictions on Antidepressants

Seth A. Seabury, Darius N. Lakdawalla, Deborah Walter, John Hayes, Thomas Gustafson, Anshu Shrestha and Dana P. Goldman

Abstract

Many state Medicaid programs have implemented policies designed to reduce spending on prescription drugs by restricting access to branded products. For patients with major depressive disorder, formulary restrictions could severely limit access to antidepressant therapies and disrupt care. We linked data on patient outcomes and spending from 24 state Medicaid programs to information on formulary restrictions from 2001 to 2008. Outcomes included frequency of MDD-related hospitalizations and ER visits per patient and total healthcare spending. We estimated the effect of the policies on patient outcomes and spending using a difference-and-difference approach. We found that restricting access to antidepressants increased the probability of an MDD-related hospitalization by 1.7 percentage points (16.6%). Furthermore, we found no evidence that these restrictions resulted in any net savings for Medicaid.


Corresponding author: Seth A. Seabury, PhD, Associate Professor of Research, Department of Emergency Medicine and the Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, USC Schaeffer Center, 635 Downey Way, VPD Suite 210, Los Angeles, CA 90089-3333, USA, Phone: +310-623-2025, e-mail:

Acknowledgments

All phases of this study were supported by Takeda Pharmaceuticals USA, Inc. (Takeda) and Lundbeck. All analyses were conducted by Precision Health Economics.

Funding: Lundbeck and Takeda Pharmaceuticals North America provided funding for this research.

Appendix

Here we discuss some additional analyses and robustness checks that were not included in the manuscript, but provide additional information about the data used and help to demonstrate the robustness and validity of the results.

Mental Health Carve-Outs

One source of potentially confounding variation for our analysis is the changing landscape of mental health carve-out programs across states. Medicaid mental health carve-outs were designed to separate coverage for behavioral health from physical health through fee-for-service or Medicaid managed care plans. These programs were intended to lower cost and increase access-to-care for patients with mental health, but there was uncertainty about the implications for quality of care and possible incentives to under-treat some patients, causing these programs to fall out of favor in recent years. We tracked the use of carve-outs in our sample using data from the Substance Abuse and Mental Health Services Administration (SAMHSA) and managed care surveys from the Kaiser Family Foundation, and found that the number of states with such carve-outs in place fell from 16 to 12 between 2002 and 2007. To ensure that none of our results were driven by changes in carve-outs, we estimated our models while controlling for carve-outs in the years we were able to determine whether they were present (2002, 2003, 2005, and 2007).

Robustness and Validity Checks

We conducted a number of specification checks to ensure the robustness of our results. First, we reanalyzed the Medicaid data excluding 2008 as the economic downturn may have affected the employment, economic status, and well-being of Medicaid patients in ways we cannot otherwise control for in the analysis. Dropping data for this year had no substantive effect on our results.

Second, we controlled for states’ use of mental health “carve-outs,” which are separate arrangements for delivering behavioral health services through managed care arrangements, and whose popularity among states declined over this time period. Including this control had no qualitative effect on the sign or magnitude of our estimated effects, although our standard errors did rise, because the data on carve-outs cover only a subset of years.

Finally, we also estimated the impact of formulary restrictions on the rate and number of all-cause hospitalizations and hospital days for a sample of 10,000 patients with no mental illness in the state Medicaid programs in our data. The formulary restrictions had no impact on their utilization of hospital services, indicating that our findings were due to changes in the treatment of MDD patients themselves and not driven by confounding state trends in hospital utilization.

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Published Online: 2014-11-7
Published in Print: 2014-9-1

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