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Can Walmart make us healthier? Prescription drug prices and health care utilization

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  • Borrescio-Higa, Florencia

Abstract

This paper analyzes how prices in the retail pharmaceutical market affect health care utilization. Specifically, I study the impact of Walmart's $4 Prescription Drug Program on utilization of antihypertensive drugs and on hospitalizations for conditions amenable to drug therapy. Identification relies on the change in the availability of cheap drugs introduced by Walmart's program, exploiting variation in the distance to the nearest Walmart across ZIP codes in a difference-in-differences framework. I find that living close to a source of cheap drugs increases utilization of antihypertensive medications by 7 percent and decreases the probability of an avoidable hospitalization by 6.2 percent.

Suggested Citation

  • Borrescio-Higa, Florencia, 2015. "Can Walmart make us healthier? Prescription drug prices and health care utilization," Journal of Health Economics, Elsevier, vol. 44(C), pages 37-53.
    • Handle: RePEc:eee:jhecon:v:44:y:2015:i:c:p:37-53
    DOI: 10.1016/j.jhealeco.2015.07.005
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    Cited by:

    1. Sean Shenghsiu Huang & John R. Bowblis, 2018. "The principal–agent problem and owner‐managers: An instrumental variables application to nursing home quality," Health Economics, John Wiley & Sons, Ltd., vol. 27(11), pages 1653-1669, November.
    2. Charles Courtemanche & Art Carden & Xilin Zhou & Murugi Ndirangu, 2019. "Do Walmart Supercenters Improve Food Security?," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(2), pages 177-198, June.
    3. Mohan, Gretta & Nolan, Anne & Lyons, Seán, 2019. "An investigation of the effect of accessibility to General Practitioner services on healthcare utilisation among older people," Social Science & Medicine, Elsevier, vol. 220(C), pages 254-263.
    4. Jill Furzer & Maripier Isabelle & Boriana Miloucheva & Audrey Laporte, 2021. "Public drug insurance and children’s use of mental health medication: Risk-specific responses to lower out-of-pocket treatment costs," CIRANO Working Papers 2021s-34, CIRANO.
    5. Ausmita Ghosh & Kosali Simon & Benjamin D. Sommers, 2017. "The Effect of State Medicaid Expansions on Prescription Drug Use: Evidence from the Affordable Care Act," NBER Working Papers 23044, National Bureau of Economic Research, Inc.
    6. Ghosh, Ausmita & Simon, Kosali & Sommers, Benjamin D., 2019. "The Effect of Health Insurance on Prescription Drug Use Among Low-Income Adults:Evidence from Recent Medicaid Expansions," Journal of Health Economics, Elsevier, vol. 63(C), pages 64-80.

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    More about this item

    Keywords

    Prescription drugs; Health care utilization; Hospitalizations; Avoidable hospitalizations; Walmart;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

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