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Why Does the Utilization of Pharmaceuticals Vary So Much Across Europe? Evidence from Micro Data on Older Europeans

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  • Lambrelli D
  • O’Donnell O

Abstract

We analyze the relative importance of population versus institutional factors in explaining cross-country variation in the utilization of pharmaceuticals among older Europeans. Use of medication is examined among all individuals aged 50+ in eleven European countries and, to better control for need, among those diagnosed with medical conditions for which there exist effective drug therapies. Organizational factors include the density of pharmacies and of physicians, retail prices, reimbursement rates, restrictions on retailing of pharmaceuticals and incentives designed to influence prescribing behaviour. Differences in population health and demographics account for almost 75% of the cross-country variation in the propensity to use pharmaceuticals among all older Europeans but this fraction falls to only 12% among those with a diagnosed condition, while, for this group, differences in the organization of the pharmaceutical and health sectors explain 32-54% of the cross-European variation in utilization of medicines. Organizational differences are more important in explaining variation in receipt of medication for serious conditions, such as asthma, arthritis, diabetes, heart attack and stroke, for which 60-80% of the crosscountry variation can be explained by population and organizational factors, and less important for asymptomatic conditions, such as high cholesterol and hypertension, for which less than 35% of the variation is explained.

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Bibliographic Info

Paper provided by HEDG, c/o Department of Economics, University of York in its series Health, Econometrics and Data Group (HEDG) Working Papers with number 09/06.

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Date of creation: Apr 2009
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Handle: RePEc:yor:hectdg:09/06

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Keywords: Pharmaceuticals; heath care; elderly; Europe;

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  1. Jürgen Maurer, 2007. "Assessing Horizontal Equity in Medication Treatment Among Elderly Mexicans: Which Socioeconomic Determinants Matter Most?," MEA discussion paper series 07143, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  2. Baoping Shang & Dana P. Goldman, 2007. "Prescription Drug Coverage and Elderly Medicare Spending," NBER Working Papers 13358, National Bureau of Economic Research, Inc.
  3. David M. Cutler & Adriana Lleras-Muney, 2006. "Education and Health: Evaluating Theories and Evidence," NBER Working Papers 12352, National Bureau of Economic Research, Inc.
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  5. Vincenzo Atella & Peter R. Noyce & Ellen Schafheutle & Karen Hassell, 2005. "Affordability of Medicines and Patients' Cost Reduction Behaviors: Empirical Evidence Based on SUR Estimates from Italy and the United Kingdom," CEIS Research Paper 71, Tor Vergata University, CEIS.
  6. Adam Wagstaff & Eddy van Doorslaer, 2000. "Measuring and Testing for Inequity in the Delivery of Health Care," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 716-733.
  7. Catherine Schaumans & Frank Verboven, 2008. "Entry and regulation: evidence from health care professions," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 949-972.
  8. Jes�s Clemente & Carmen Marcuello & Antonio Monta�és, 2008. "Pharmaceutical expenditure, total health-care expenditure and GDP," Health Economics, John Wiley & Sons, Ltd., vol. 17(10), pages 1187-1206.
  9. Kristian Bolin & Anna Lindgren & Björn Lindgren & Petter Lundborg, 2009. "Utilisation of physician services in the 50+ population: the relative importance of individual versus institutional factors in 10 European countries," International Journal of Health Care Finance and Economics, Springer, vol. 9(1), pages 83-112, March.
  10. Wagstaff, Adam & van Doorslaer, Eddy, 1992. "Equity in the finance of health care: Some international comparisons," Journal of Health Economics, Elsevier, vol. 11(4), pages 361-387, December.
  11. David Madden & Anne Nolan & Brian Nolan, 2004. "GP Reimbursement and Visiting Behaviour in Ireland," Working Papers 200426, School Of Economics, University College Dublin.
  12. Dana Goldman & James P. Smith, 2005. "Socioeconomic Differences in the Adoption of New Medical Technologies," NBER Working Papers 11218, National Bureau of Economic Research, Inc.
  13. Jürgen Maurer, 2007. "Socioeconomic and Health Determinants of Health Care Utilization Among Elderly Europeans: A Semiparametric Assessment of Equity, Intensity and Responsiveness for Ten European Countries," MEA discussion paper series 07144, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
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