Substitution, Spending Offsets, and Prescription Drug Benefit Design
-
Martin Gaynor
Many U.S. employers have recently adopted less generous prescription drug benefits. In addition, in 2006 the U.S. began to offer prescription drug insurance to approximately 42 million Medicare beneficiaries. We used data on individual health insurance claims and benefit data from 1997 to 2003 to study how changes in consumers’ co-payments for prescription drugs affect use of and expenditure on prescription drugs, inpatient care, and outpatient care. We analyzed the effects both in the year of the co-payment change and in the year following the change. Our results show that increases in prescription drug prices reduce both use of and spending on prescription drugs. They also show that consumers substitute the use of outpatient care for prescription drug use and that about 35% of the expenditure reductions on prescription drugs are offset by increases in other spending.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Articles in the same Issue
- Article
- Aging and Future Healthcare Expenditure: A Consistent Approach
- Fat Taxes: Big Money for Small Change
- The Effect of State Cost Containment Strategies on the Insurance Status and Use of Antiretroviral Therapy (HAART) for HIV Infected People
- Substitution, Spending Offsets, and Prescription Drug Benefit Design
- Risky Sexual Behavior, Testing, and HIV Treatments
- Current and Future Prevalence of Obesity and Severe Obesity in the United States
- Willingness to Pay for Antiretroviral Therapy for HIV Positive Individuals in India
- Cross-Country Variation in Obesity Patterns among Older Americans and Europeans
Articles in the same Issue
- Article
- Aging and Future Healthcare Expenditure: A Consistent Approach
- Fat Taxes: Big Money for Small Change
- The Effect of State Cost Containment Strategies on the Insurance Status and Use of Antiretroviral Therapy (HAART) for HIV Infected People
- Substitution, Spending Offsets, and Prescription Drug Benefit Design
- Risky Sexual Behavior, Testing, and HIV Treatments
- Current and Future Prevalence of Obesity and Severe Obesity in the United States
- Willingness to Pay for Antiretroviral Therapy for HIV Positive Individuals in India
- Cross-Country Variation in Obesity Patterns among Older Americans and Europeans
