Demand Side Cost-Sharing and Prescription Drugs Utilization: Evidence From a Quasi-Natural Experiment

Eva Hromadkova and Michal Zdenek

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: In this paper we investigate the effects of introduction of lump sum copayments on the utilization of prescription drugs by elderly patients. We make use of an unique dataset and analyze the policy change that implemented patient cost-sharing in the Czech Republic starting in 2008. After the introduction of copayments the number of prescriptions filled decreased by 29%. At the same time, however, total expenditures on prescription drugs dropped only in the first quarter of the postintroduction period and then returned to previous levels. This was partially due to behavioral responses of patients and physicians: strategic shift of prescription purchases to the time right before the introduction of reform, prescription of more packages on one prescription and an upward shift in the price composition of prescribed drugs. Moreover, patients in general decided to forego those types of drugs that did not cause immediate worsening of health status.

Keywords: health insurance; moral hazard; cost sharing; prescription drugs (search for similar items in EconPapers)
JEL-codes: I11 I19 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-ias
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Citations: View citations in EconPapers (2)

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