Drug therapy adherence and health outcomes in presence of physician and patient unobserved heterogeneity

Understanding the role that drug adherence has on health outcomes in everyday clinical practice is central for the policy maker. This is particularly true when patients suffer from asymptomatic chronic conditions (i.e., hypertension, hypercholesterolemia, and diabetes). By exploiting a unique longitudinal dataset at patient and physician level in Italy, we show that patients and physicians (observed and unobserved) characteristics play an important role in determining health status, at least as important as drug adherence. Most importantly, we show that physicians can have an important role in determining patient health status, far beyond the standard determinants of health status that clinical and health economic literature have discussed and analysed.