Is prescription affordability impacting hospitalisations?

Patients who cannot afford their prescriptions are far more likely to be admitted to hospital, according to new international research, and Australian GPs are concerned our healthcare system is pushing disadvantaged people down that same path.
 
Published in the New Zealand Medical Journal, authors of the Te Herenga Waka—Victoria University of Wellington study, which used data from NZ Health Surveys from 2014 to 2019, found people facing a cost barrier in accessing medications are 34% more likely to be admitted to hospital than those who do not.
 
Lead author Dr Mona Jeffreys said an estimated $32.4 million a year could have been saved if these admissions had been avoided, based on the average cost and length per hospital stay.
 
‘Our research, and the results of other studies, show there is likely to be a strong link between people’s inability to afford prescription medicines and a higher rate of hospitalisation,’ she said.
 
Co-founder of RACGP Specific Interests Poverty and Health, Dr Tim Senior, said it is entirely plausible the situation playing out in the New Zealand study is happening across Australia.
 
‘It tells us what we’ve heard, anecdotally, from patients,’ he told newsGP.
 
Dr Senior said, in the current cost-of-living crisis, it does not only take large medical bills to stop people accessing treatment.
 
‘Those on multiple medications can have quite significant costs each month,’ he said.
 
The New Zealand research referenced the country’s $5 co-payment for prescription medicines, which was stopped in 2023, with standard prescription medicines now completely covered.

Its National Party announced it intended to reintroduce the co-payment prior to the 2023 election.
 
The data shows that among those who could not afford the $5 charge, 60% were admitted to hospital during the study period, compared with 43% of those who were able to pay.
 
Meanwhile in Australia, a recent update from the Australian Bureau of Statistics (ABS) revealed people who are disadvantaged are more likely to need more medications, with 28% taking five or more medications compared to 16.6% of those living in areas of least disadvantage.
 
Although the Australian Government reduced the co-payment on 1 January under its cheaper medicines policy, ABS data for March 2024 shows the cost of pharmaceuticals is rising ‘due to the cyclical reduction in the proportion of consumers who qualify for subsides under the PBS and Medicare Safety Net’.
 
The Australian Institute for Health and Welfare’s most recent findings on medicine spending indicates the rate of dispensed prescriptions fell by 6.3% between 2015–16 and 2020–21.
 
‘This was particularly the case for above co-payment prescriptions, where age-standardised dispensing rates per 100 people fell by 11%,’ it states.
 
Dr Senior said these findings are important when assessing how socioeconomic status determines health outcomes, and how costs could compound when medical conditions go untreated.
 
‘It’s a really significant finding that there were fewer prescriptions, and there are going to be consequences on health further down the line because of that,’ he said.
 
‘Purely in terms of medications, the financial impact of the multiple chronic diseases that people have are bigger for people in the least well-off communities and the potential impact of that is massive.’
 
Dr Senior said the most common medications for those in disadvantaged communities include treatments for diabetes and cardiovascular disease.
 
‘It would have a consequence on hospital admissions because those are medications that are preventing heart attacks and strokes,’ he said.
 
Although this New Zealand study has highlighted the possible impacts of medication co-payments, Dr Senior said policy makers need to consider all the combined costs that are preventing people from getting treatment.
 
‘We can’t just assume the need is similar all across different parts of Australia or different income brackets,’ he said.
 
As for Dr Jeffreys in New Zealand, she states that ‘any change to reintroduce prescription co-payments could lead to more hospital admissions, increasing costs to hospitals, and adversely affect people’s health as well as health equity.’
 
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cost of living hospitalisations medications out-of-pocket costs PBS prescriptions socioeconomic status