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Letter to the Honorable Michael Bilirakis 1 (August 2001)

handle is hein.congrec/cbo9237 and id is 1 raw text is: August 10, 2001 Honorable Michael Bilirakis Chairman Subcommittee on Health Committee on Energy and Commerce U.S. House of Representatives Washington, DC 20515 Dear Mr. Chairman: During the Subcommittee's May 16, 2001, hearing on a Medicare prescription drug benefit, you asked me to explain the Congressional Budget Office's (CBO's) rationale for not adjusting its cost estimates to account for savings from fewer hospital admissions or less use of other health services resulting from improved access to outpatient prescription drugs. We would expect some improvements in beneficiaries' health from expanding access to outpatient prescription drugs. Better health is, after all, one of the main reasons to enact such a benefit, and improvements in health should lead to savings in costs for hospital admissions and other services for some people. However, it is not clear that in total such costs would decline. If the alternatives were all or nothing-either full access to the complete array of outpatient prescription drugs available today or no access to any outpatient drugs-the net savings in the costs of other health care services provided to Medicare beneficiaries might be easier to predict. Few Americans would disagree with the premise that, on the whole, the prescription drugs available today have not only contributed to declining mortality but have also helped keep people out of hospitals. But our task is not as simple as estimating all-or-nothing options. Today, Medicare beneficiaries without any drug coverage already consume a large number of prescription drugs. (On average, they filled 17 prescriptions in 1997, compared with about 24 for Medicare beneficiaries with good employer- sponsored coverage.) The additional or more expensive drugs that beneficiaries without current coverage might use as a result of gaining coverage would probably provide less-dramatic

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