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The impact of physician-level drug budgets on prescribing behavior

Author

Listed:
  • Katharina Elisabeth Fischer

    (University of Duisburg-Essen
    University of Hamburg)

  • Taika Koch

    (University of Hamburg)

  • Karel Kostev

    (IMS Health, Epidemiology)

  • Tom Stargardt

    (University of Hamburg)

Abstract

To contain pharmaceutical spending, drug budgets have been introduced across health systems. Apart from analyzing whether drug budgets fulfill their overall goal of reducing spending, changes in the cost and quality of prescribing and the enforcement mechanisms put in place need evaluation to assess the effectiveness of drug budgets at the physician level. In this study, we aim to analyze the cost and quality of prescribing conditional on the level of utilization of the drug budget and in view of varying levels of enforcement in cases of overspending. We observed drug budget utilization in a panel of 440 physicians in three federal states of Germany from 2005 to 2011. At the physician level, we retrospectively calculated drug budgets, the level of drug budget utilization, and differentiated by varying levels of enforcement where physicians overspent their budgets (i.e., more than 115/125% of the drug budget). Using lagged dependent-variable regression models, we analyzed whether the level of drug budget utilization in the previous year affected current prescribing in terms of various indicators to describe the cost and quality of prescribing. We controlled for patient and physician characteristics. The mean drug budget utilization is 92.3%. The level of drug budget utilization influences selected dimensions of cost and quality of prescribing (i.e., generic share (estimate 0.000215; p = 0.0246), concentration of generic brands (estimate 0.000585; p = 0.0056) and therapeutic substances (estimate −0.000060; p

Suggested Citation

  • Katharina Elisabeth Fischer & Taika Koch & Karel Kostev & Tom Stargardt, 2018. "The impact of physician-level drug budgets on prescribing behavior," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(2), pages 213-222, March.
    • Handle: RePEc:spr:eujhec:v:19:y:2018:i:2:d:10.1007_s10198-017-0875-9
    DOI: 10.1007/s10198-017-0875-9
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    References listed on IDEAS

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    Cited by:

    1. Katharina E. Blankart & Friederike Arndt, 2020. "Physician-Level Cost Control Measures and Regional Variation of Biosimilar Utilization in Germany," IJERPH, MDPI, vol. 17(11), pages 1-14, June.
    2. Berger, Michael & Pock, Markus & Reiss, Miriam & Röhrling, Gerald & Czypionka, Thomas, 2023. "Exploring the effectiveness of demand-side retail pharmaceutical expenditure reforms: cross-country evidence from weighted-average least squares estimation," LSE Research Online Documents on Economics 116928, London School of Economics and Political Science, LSE Library.
    3. Mills, Mackenzie & Kanavos, Panos, 2020. "Do pharmaceutical budgets deliver financial sustainability in healthcare? Evidence from Europe," Health Policy, Elsevier, vol. 124(3), pages 239-251.
    4. Michael Berger & Markus Pock & Miriam Reiss & Gerald Röhrling & Thomas Czypionka, 2023. "Exploring the effectiveness of demand-side retail pharmaceutical expenditure reforms," International Journal of Health Economics and Management, Springer, vol. 23(1), pages 149-172, March.
    5. Daniel Avdic & Katharina E. Blankart, 2021. "A hard look at soft cost-control measures in healthcare organizations: Evidence from preferred drug policies in Germany," Papers 2021-07, Centre for Health Economics, Monash University.
    6. Katharina Elisabeth Blankart & Tom Stargardt, 2020. "The impact of drug quality ratings from health technology assessments on the adoption of new drugs by physicians in Germany," Health Economics, John Wiley & Sons, Ltd., vol. 29(S1), pages 63-82, October.
    7. Sara Mucherino & Manuela Casula & Federica Galimberti & Ilaria Guarino & Elena Olmastroni & Elena Tragni & Valentina Orlando & Enrica Menditto & on behalf of the EDU.RE.DRUG Group, 2022. "The Effectiveness of Interventions to Evaluate and Reduce Healthcare Costs of Potentially Inappropriate Prescriptions among the Older Adults: A Systematic Review," IJERPH, MDPI, vol. 19(11), pages 1-19, May.

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    JEL classification:

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

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