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Fixed budgets as a cost containment measure for pharmaceuticals
Umeå University, Faculty of Social Sciences, Department of Economics.
Umeå University, Faculty of Social Sciences, Department of Economics.
Umeå University, Faculty of Social Sciences, Department of Economics.
2006 (English)In: European Journal of Health Economics, ISSN 1618-7598, E-ISSN 1618-7601, Vol. 7, no 1, 37-45 p.Article in journal (Other academic) Published
Abstract [en]

In Västerbotten County, Sweden, there are two health centers which (in contrast to all other health centers in the region) bear strict responsibility over their pharmaceutical budget. This study examined whether the prices and quantities of pharmaceuticals prescribed by physicians working at these health centers differ significantly from those prescribed by physicians at health centers with open-ended budgets. Estimation results using matching methods, which allows us to compare similar patients at the different health centers, show that the introduction of fixed pharmaceutical budgets did not affect physicians' prescription behavior, indicating that fixed budgets may not be an efficient measure to reduce costs. Another explanation is that the health centers under study already had taken measures to contain costs, making it hard to further reduce costs.

Place, publisher, year, edition, pages
Springer, 2006. Vol. 7, no 1, 37-45 p.
Keyword [en]
fixed budgets, pharmaceuticals, cost containment, propensity score matching
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-11826DOI: 10.1007/s10198-005-0328-8PubMedID: 16435117OAI: oai:DiVA.org:umu-11826DiVA: diva2:151497
Available from: 2007-03-14 Created: 2007-03-14 Last updated: 2017-12-14Bibliographically approved
In thesis
1. Economic policy in health care: Sickness absence and pharmaceutical costs
Open this publication in new window or tab >>Economic policy in health care: Sickness absence and pharmaceutical costs
2007 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of a summary and four papers. The first two concerns health care and sickness absence, and the last two pharmaceutical costs and prices.

Paper [I] presents an economic federation model which resembles the situation in, for example, Sweden. In the model the state governments provide health care, the fed-eral government provides a sickness benefit and both levels tax labor income. The re-sults show that the states can have either an incentive to under- or over-provide health care. The federal government can, by introducing an intergovernmental transfer, in-duce the state governments to provide the socially optimal amount of health care.

In Paper [II] the effect of aggregated public health care expenditure on absence from work due to sickness or disability was estimated. The analysis was based on data from a panel of the Swedish municipalities for the period 1993-2004. Public health care expenditure was found to have no statistically significant effect on absence and the standard errors were small enough to rule out all but a minimal effect. The result held when separate estimations were conducted for women and men, and for absence due to sickness and disability.

The purpose of Paper [III] was to study the effects of the introduction of fixed pharmaceutical budgets for two health centers in Västerbotten, Sweden. Estimation results using propensity score matching methods show that there are no systematic differences for either price or quantity per prescription between health centers using fixed and open-ended budgets. The analysis was based on individual prescription data from the two health centers and a control group both before and after the introduction of fixed budgets.

In Paper [IV] the introduction of the Swedish substitution reform in October 2002 was used as a natural experiment to examine the effects of increased consumer infor-mation on pharmaceutical prices. Using monthly data on individual pharmaceutical prices, the average reduction of prices due to the reform was estimated to four percent for both brand name and generic pharmaceuticals during the first four years after the reform. The results also show that the price adjustment was not instant.

Place, publisher, year, edition, pages
Umeå: Institutionen för nationalekonomi, Umeå universitet, 2007. 127 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 710
Keyword
vertical fiscal externalities, sickness absence, sickness benefits, health care expenditure, fixed budgets, pharmaceuticals, cost containment, dynamic panel data models, endogeneity, propensity score matching
National Category
Economics
Identifiers
urn:nbn:se:umu:diva-1137 (URN)978-91-7264-331-4 (ISBN)
Public defence
2007-06-08, Hörsal F, Humanisthuset, Umeå Universitet, Umeå, 13:15
Opponent
Supervisors
Available from: 2007-05-11 Created: 2007-05-11 Last updated: 2010-10-25Bibliographically approved

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