Association between medication supplies and healthcare costs in older adults from an urban healthcare system.

OBJECTIVES: The amount of medication dispensed to older adults for the treatment of chronic disease must be balanced carefully. Insufficient medication supplies lead to inadequate treatment of chronic disease, whereas excessive supplies represent wasted resources and the potential for toxicity. We used an electronic medical record system to determine the distribution of medications supplied to older urban adults and to examine the correlations of these distributions with healthcare costs and use. DESIGN: A cross-sectional study using data acquired over 3 years (1994-1996). SETTING: A tax-supported urban public healthcare system consisting of a 300-bed hospital, an emergency department, and a network of community-based ambulatory care centers. PATIENTS: Patients were >60 years of age and had at least one prescription refill and at least two ambulatory visits or one hospitalization during the 3-year period. MEASUREMENTS: Focusing on 12 major categories of drugs used to treat chronic diseases, we determined the amounts and direct costs of these medications dispensed to older adult patients. Amounts of medications that were needed by patients to medicate themselves adequately were compared with the medication supply actually dispensed considering all sources of care (primary, emergency, and inpatient). We calculated the excess drug costs attributable to oversupply of medication (>120% of the amount needed) and the drug cost reduction caused by undersupply of medication (<80% of the amount needed). We also compared total healthcare use and costs for patients who had an oversupply, an undersupply, or an appropriate supply of their medications. RESULTS: The cohort comprised 4164 patients with a mean age of 71 +/- 7 (SD) who received a mean of 3 +/- 2 (SD) drugs for chronic conditions. There were 668 patients (16%) who received <80% of the supply needed, 1556 patients (37%) who received between 80 and 120% of the supply needed, and 1940 patients (47%) who received >120% of the supply needed. The total direct cost of targeted medications for 3 years was $1.96 million or, on average, $654,000 annually. During the 3-year period, patients receiving >120% of their needed medications had excess direct medication costs of $279,084 or $144 per patient, whereas patients receiving <80% of drugs needed had reduced medication costs of $423,438 or $634 per patient. Multivariable analyses revealed that both under- and over-supplies of medication were associated with a greater likelihood of emergency department visits and hospital admissions. CONCLUSIONS: More than one-half of the older adults in our study have under- or over-supplies of medications for the treatment of their chronic diseases. Such inappropriate supplies of medications are associated with healthcare utilization and costs.