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Benefit Plan Design and Prescription Drug Utilization Among Asthmatics: Do Patient Copayments Matter?

In: Frontiers in Health Policy Research, Volume 7

  • William H. Crown
  • Ernst R. Berndt
  • Onur Baser
  • Stan N. Finkelstein
  • Whitney P. Witt
  • Jonathan Maguire
  • Kenan E. Haver

The ratio of controller-to-reliever medication use has been proposed as a measure of treatment quality for asthma patients. In this study we examine the effects of plan-level mean out-of-pocket asthma medication patient copayments and other features of benefit plan design on the use of controller medications alone, controller and reliever medications (combination therapy), and reliever medications alone. The 1995–2000 MarketScanTM claims data were used to construct plan-level out-of-pocket copayment and physician/practice prescriber preference variables for asthma medications. Separate multinomial logit models were estimated for patients in fee-for-service (FFS) and non-FFS plans relating benefit plan design features, physician/practice prescribing preferences, patient demographics, patient comorbidities, and county-level income variables to patient-level asthma treatment patterns. We find that the controller-to-reliever ratio rose steadily over 1995–2000, along with out-of-pocket payments for asthma medications, which rose more for controllers than for relievers. After controlling for other variables, however, plan-level mean out-of-pocket copayments were not found to have a statistically significant influence on patient-level asthma treatment patterns. On the other hand, physician/practice prescribing patterns strongly influenced patient-level treatment patterns. There is no strong statistical evidence that higher levels of out-of-pocket copayments for prescription drugs influence asthma treatment patterns. However, physician/practice prescribing preferences influence patient treatment.

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This chapter was published in:
  • David M. Cutler & Alan M. Garber, 2004. "Frontiers in Health Policy Research, Volume 7," NBER Books, National Bureau of Economic Research, Inc, number cutl04-1, December.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 9871.
    Handle: RePEc:nbr:nberch:9871
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Web page: http://www.nber.org
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    1. Thomas F. Crossley & Paul Grootendorst & Sule Kokkmaz & Michael R. Veall, 2000. "The Effects of Drug Subsidies on Out-of-Poket Prescription Drug Expenditures by seniors: regional Evidence from Canada," CEPR Discussion Papers 422, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. Nyman, John A., 1999. "The economics of moral hazard revisited," Journal of Health Economics, Elsevier, vol. 18(6), pages 811-824, December.
    3. Leibowitz, Arleen & Manning, Willard G. & Newhouse, Joseph P., 1985. "The demand for prescription drugs as a function of cost-sharing," Social Science & Medicine, Elsevier, vol. 21(10), pages 1063-1069, January.
    4. Marquis, M. Susan, 1985. "Cost-sharing and provider choice," Journal of Health Economics, Elsevier, vol. 4(2), pages 137-157, June.
    5. Zeckhauser, Richard, 1970. "Medical insurance: A case study of the tradeoff between risk spreading and appropriate incentives," Journal of Economic Theory, Elsevier, vol. 2(1), pages 10-26, March.
    6. Manning, Willard G. & Marquis, M. Susan, 2001. "Health insurance: tradeoffs revisited," Journal of Health Economics, Elsevier, vol. 20(2), pages 289-293, March.
    7. Blomqvist, Ake, 2001. "Does the economics of moral hazard need to be revisited? A comment on the paper by John Nyman," Journal of Health Economics, Elsevier, vol. 20(2), pages 283-288, March.
    8. Francesco Squintani, 1999. "Moral Hazard," Discussion Papers 1269, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    9. Daniel Feenberg & Jonathan Skinner, 1992. "The Risk and Duration of Catastrophic Health Care Expenditures," NBER Working Papers 4147, National Bureau of Economic Research, Inc.
    10. P Grootendorst, 1999. "Beneficiary Cost Sharing Under Canadian Provincial Prescription Drug Benefit Programs: History and Assessment," Centre for Health Economics and Policy Analysis Working Paper Series 1999-10, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
    11. Manning, Willard G. & Marquis, M. Susan, 1996. "Health insurance: The tradeoff between risk pooling and moral hazard," Journal of Health Economics, Elsevier, vol. 15(5), pages 609-639, October.
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