Does cost sharing really reduce inappropriate prescriptions among the elderly?
AbstractImproving prescription drug quality is an essential health policy goal in modern health systems, though evidence on the available instruments to attain such a goal are scarce. Cost sharing has an arguable role in improving the likelihood of an individual obtaining an appropriate prescription. This paper empirically examines the effect of cost sharing for prescription drugs in some dimensions of medication-related quality, namely the probability of inappropriate prescription drug use. Using data from United States seniors from 1996 to 2005, we explore various specifications of the probability of obtaining an inappropriate prescription that corrects for sample selection, endogeneity, and unobserved heterogeneity. Our results suggest a small, but measurable, negative price elasticity for inappropriate drug use to average out-of-pocket drug costs. That is, we find that user fees reduce the use of inappropriate medications, however the elasticity of cost sharing is found to be lower than that of drugs in general. A relatively close to zero price elasticity suggests that expected prescription quality improvements from co-payments are small in the light of our evidence.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Health Policy.
Volume (Year): 101 (2011)
Issue (Month): 2 (July)
Contact details of provider:
Web page: http://www.elsevier.com/locate/healthpol
Inappropriate prescriptions Cost sharing Pharmaceutical expenditure Quality of care;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gabriel A. Picone & Frank A. Sloan & Shin-Yi Chou & Donald H. Taylor, 2003. "Does Higher Hospital Cost Imply Higher Quality of Care?," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 51-62, February.
- Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
- Kenkel, Donald S, 1991.
"Health Behavior, Health Knowledge, and Schooling,"
Journal of Political Economy,
University of Chicago Press, vol. 99(2), pages 287-305, April.
- Douglas Staiger & James H. Stock, 1994.
"Instrumental Variables Regression with Weak Instruments,"
NBER Technical Working Papers
0151, National Bureau of Economic Research, Inc.
- Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Li, Xin & Guh, Daphne & Lacaille, Diane & Esdaile, John & Anis, Aslam H., 2007. "The impact of cost sharing of prescription drug expenditures on health care utilization by the elderly: Own- and cross-price elasticities," Health Policy, Elsevier, vol. 82(3), pages 340-347, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei) or () The email address of this maintainer does not seem to be valid anymore. Please ask to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.