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Demand Side Cost-Sharing and Prescription Drugs Utilization: Evidence From a Quasi-Natural Experiment

Author

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  • Eva Hromadkova
  • Michal Zdenek

Abstract

In this paper we investigate the effects of introduction of lump sum copayments on the utilization of prescription drugs by elderly patients. We make use of an unique dataset and analyze the policy change that implemented patient cost-sharing in the Czech Republic starting in 2008. After the introduction of copayments the number of prescriptions filled decreased by 29%. At the same time, however, total expenditures on prescription drugs dropped only in the first quarter of the postintroduction period and then returned to previous levels. This was partially due to behavioral responses of patients and physicians: strategic shift of prescription purchases to the time right before the introduction of reform, prescription of more packages on one prescription and an upward shift in the price composition of prescribed drugs. Moreover, patients in general decided to forego those types of drugs that did not cause immediate worsening of health status.

Suggested Citation

  • Eva Hromadkova & Michal Zdenek, 2013. "Demand Side Cost-Sharing and Prescription Drugs Utilization: Evidence From a Quasi-Natural Experiment," CERGE-EI Working Papers wp486, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp486
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    References listed on IDEAS

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    1. Kennedy, J. & Erb, C., 2002. "Prescription noncompliance due to cost among adults with disabilities in the United States," American Journal of Public Health, American Public Health Association, vol. 92(7), pages 1120-1124.
    2. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-277, June.
    3. Amitabh Chandra & Jonathan Gruber & Robin McKnight, 2010. "Patient Cost-Sharing and Hospitalization Offsets in the Elderly," American Economic Review, American Economic Association, vol. 100(1), pages 193-213, March.
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    Cited by:

    1. Martin Kahanec & M. Guzi & M. Martišková & M. Paleník & F. Pertold & Z. Siebertová, 2012. "GINI Country Report: Growing Inequalities and their Impacts in the Czech Republic and Slovakia," GINI Country Reports czech_slovak, AIAS, Amsterdam Institute for Advanced Labour Studies.
    2. Martin Kahanec & Martin Guzi & Monika Martišková & Michal Paleník & Filip Pertold & Zuzana Siebertová, 2013. "GINI Country Report: The Czech Republic and Slovakia," Research Reports 7, Central European Labour Studies Institute (CELSI).

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    More about this item

    Keywords

    health insurance; moral hazard; cost sharing; prescription drugs;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I19 - Health, Education, and Welfare - - Health - - - Other

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