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Does Physician Dispensing Increase Drug Expenditures?

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  • Boris Kaiser, Christian Schmid

Abstract

We analyze whether the possibility for physicians to dispense drugs increases health care expenditures due to the incentives created by the markup on drugs sold. Using comprehensive physician-level data from Switzerland, we exploit the fact that there is regional variation in the dispensing regime to estimate policy effects. The empirical strategy consists of doubly-robust estimation which combines inverseprobability weighting with regression. Our main finding suggests that if dispensing is permitted, physicians produce significantly higher drug costs in the order of 30% per patient.

Suggested Citation

  • Boris Kaiser, Christian Schmid, 2013. "Does Physician Dispensing Increase Drug Expenditures?," Diskussionsschriften credresearchpaper02, Universitaet Bern, Departement Volkswirtschaft - CRED.
  • Handle: RePEc:rdv:wpaper:credresearchpaper02
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    References listed on IDEAS

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    1. Richard K. Crump & V. Joseph Hotz & Guido W. Imbens & Oscar A. Mitnik, 2009. "Dealing with limited overlap in estimation of average treatment effects," Biometrika, Biometrika Trust, vol. 96(1), pages 187-199.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. #HEJC papers for September 2013
      by academichealtheconomists in The Academic Health Economists' Blog on 2013-09-01 04:01:38

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    Cited by:

    1. Daniel Burkhard & Christian P. R. Schmid & Kaspar Wüthrich, 2019. "Financial incentives and physician prescription behavior: Evidence from dispensing regulations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1114-1129, September.
    2. Matthias Bannert & David Iselin, 2015. "Ask Your Doctor or Pharmacist! On the Effect of Self-Dispensing Physicians on Pharmaceutical Coverage," KOF Working papers 15-387, KOF Swiss Economic Institute, ETH Zurich.
    3. Stefan Meyer, 2016. "Dispensing physicians, asymmetric information supplier-induced demand: evidence from the Swiss Health Survey," International Journal of Health Economics and Management, Springer, vol. 16(3), pages 215-245, September.

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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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