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The Effect of Pharmaceutical Utilization and Innovation on Hospitalization and Mortality

Listed author(s):
  • Frank R. Lichtenberg

This paper presents an econometric analysis of the effect of changes in the quantity and type of pharmaceuticals prescribed by physicians in outpatient visits on rates of hospitalization, surgical procedure, mortality, and related variables. It examines the statistical relationship across diseases between changes in outpatient pharmaceutical utilization and changes in inpatient care utilization and mortality during the period 1980-92. The estimates indicate that the number of hospital stays, bed-days, and surgical procedures declined most rapidly for those diagnoses with the greatest increase in the total number of drugs prescribed and the greatest change in the distribution of drugs, by molecule. The estimates imply that an increase of 100 prescriptions is associated with 1.48 fewer hospital admissions, 16.3 fewer hospital days, and 3.36 fewer inpatient surgical procedures. A $1 increase in pharmaceutical expenditure is associated with a $3.65 reduction in hospital care expenditure.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5418.

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Date of creation: Jan 1996
Publication status: Published as "The Effect of Government Funding on Private Industrial Research and Development: A Re-Assessment", JINDE, Vol. 36, no. 1 (1987): 97-104. With Donald Siegel, published as "The Effect of Control Changes on the
Handle: RePEc:nbr:nberwo:5418
Note: HE PR
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  1. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
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