Are Drugs Substitutes or Complements for Intensive (and Expensive) Medical Treatment
American Economic Review
vol. 101,
no. 3, May 2011
(pp. 393-97)
Abstract
Little is known about the relationship between variation in drug and non-drug medical treatment and how areas may substitute one type of care for the other. Using pharmacy and medical claims data for Medicare beneficiaries, we examine whether areas with more drug use have lower non-drug medical costs and how the quality of prescribing and primary care are associated with medical costs. We find that areas with higher drug spending do not have lower non-drug medical spending; however, poorer-quality prescribing and primary care are associated with higher medical spending in general and inpatient spending in particular.Citation
Zhang, Yuting, Joseph P. Newhouse, and Katherine Baicker. 2011. "Are Drugs Substitutes or Complements for Intensive (and Expensive) Medical Treatment." American Economic Review, 101 (3): 393-97. DOI: 10.1257/aer.101.3.393JEL Classification
- D12 Consumer Economics: Empirical Analysis
- I11 Analysis of Health Care Markets
- I18 Health: Government Policy; Regulation; Public Health