Pennsylvania Dept. Of Aging Makes Recommendations To Cut Costs For Senior Rx Program Without Reducing Benefits, Enrollment

"Cost saving measures" are needed to keep Pennsylvania's senior prescription drug plan "financially intact," according to a report issued Monday by the state Department of Aging, the Philadelphia Inquirer reports. Testifying before state lawmakers Monday, Dept. of Aging Secretary Richard Browdie said a projected $360 million shortfall in lottery revenues by the end of FY 2004-2005 would impact the finances of the Pharmaceutical Assistance Contract for the Elderly (PACE) program (Wiggins, Philadelphia Inquirer, 11/21). In FY 1999-2000, the lottery netted $1.7 billion and paid out $850 million in prizes while contributing $670 million to PACE and other senior programs. The lottery is required by law to contribute 30 cents of each dollar earned to programs and 40 cents to prizes. In the last fiscal year, the lottery had to spend 55 cents of every dollar on prizes because so many people won. In addition, the lottery fund has struggled to meet the needs of the drug program as prescription drug costs have increased 10% annually on average, and senior prescription use has increased at 12% annually. Pennsylvania is the only state that uses its lottery proceeds to fund programs for seniors (Kaiser Daily Health Policy Report, 11/12). Browdie said the aging department has considered changing enrollment requirements, benefits or seniors' co-pays, but decided against making such changes. Instead, the report recommends that the state negotiate with drug companies to provide the state with the same 21% discount offered to Medicaid programs. The report also suggested giving seniors financial incentives to use mail order pharmacies and to order 90-day supplies of "maintenance drugs." Capping the price of "multisource" generic drugs would also save money, the report found. If implemented, the changes would save the state $75 million the first year and $95 million the second year, the Inquirer reports. "In order to maintain the programs currently funded from the lottery fund in the future, a combination of increased ticket sales and cost-containment strategies will need to be implemented," Browdie said.

Only a 'Short-Term' Solution?
The Inquirer reports that lawmakers were concerned about the study's suggestions and saw them only as a "short-term" solution. State Sen. Tim Murphy (R), chair of the Senate Aging Committee, said, "The recommendations are a good start, but it falls far short of being a total solution." Democrats, who want Pennsylvania to join a multistate purchasing pool, were "even less impressed" with the recommendations. State Sen. Vincent Hughes (D) said, "It's nothing more than patchwork to keep the program limping along, an attempt to pass the problem off on the next administration." Hughes also criticized the plan because it "won't provide coverage for a single additional senior who needs it." (Philadelphia Inquirer, 11/2).