Static regulation and technological change: Prescribing cost-effective treatments under financial constraints in the English NHS

Dimitrova, V.; and Sameen, H.;

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: Despite the long-term benefits of new health technologies, their optimal adoption may be impeded by the financial constraints of a public health system. In this paper we assess whether financially constrained hospital trusts ration cost-effective but expensive innovative treatments. Given financial pressures, exogenous to small disease populations, accumulated debt may prevent optimal prescribing. In such circumstances, financially constrained hospital trusts may choose to ration the use of these treatments in the short-term, even though their prescribing may be a more efficient use of funds in the long-term. We consider two small disease populations of particular interest where recent innovative medicines have become available: hepatitis C and multiple sclerosis. Combining and analysing a novel panel dataset of 150 hospital trusts providing acute care in the United Kingdom, we find evidence of rationing new cost-effective treatments under financial constraints.

Keywords: healthcare budgets; cost-effectiveness; prescribing (search for similar items in EconPapers)
JEL-codes: H51 I11 I18 (search for similar items in EconPapers)
Date: 2022-07
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