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Charging for health care: Evidence on the utilisation of NHS prescribed drugs

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  • Ryan, Mandy
  • Birch, Stephen

Abstract

The effects of regular and frequent increases in charges for health care on patient utilisation are analysed using monthly data on National Health Service (NHS) prescribed drugs in England for the period 1979-1985. Using a partial adjustment model a utilisation equation of prescribed drugs is estimated for the adult non-elderly population that is subject to the NHS prescription charge. The maximum likelihood estimates of the coefficients of the equation imply that the charges policy followed in the U.K. has led to a significant reduction in utilisation among non-exempt patients. The short-run price elasticity of utilisation is --0.109 and the long-run elasticity is --0.09, while exempt utilisation is unaffected. Although the policy has generated a reduction in the central Government expenditure for prescribed drugs, on the basis of these estimates around 66% of these savings arise from the reduction in service use as opposed to the increased revenue per item of drugs.

Suggested Citation

  • Ryan, Mandy & Birch, Stephen, 1991. "Charging for health care: Evidence on the utilisation of NHS prescribed drugs," Social Science & Medicine, Elsevier, vol. 33(6), pages 681-687, January.
    • Handle: RePEc:eee:socmed:v:33:y:1991:i:6:p:681-687
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    Citations

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    Cited by:

    1. Paul V. Grootendorst, 1995. "A comparison of alternative models of prescription drug utilization," Health Economics, John Wiley & Sons, Ltd., vol. 4(3), pages 183-198, May.
    2. Vincenzo Atella & Karen Hassell & Ellen Schafheutle & Marjorie C. Weiss & Peter R. Noyce, 2003. "Cost to the Patient or Cost to the Healthcare System? Which one Matters the Most for GP Prescribing Decisions? A UK-Italy Comparison," CEIS Research Paper 1, Tor Vergata University, CEIS.
    3. Paul Grootendorst & Mitchell Levine, 2002. "Do Drug Plans Matter? Effects of Drug Plan Eligibility on Drug Use Among the Elderly, Social Assistance Recipients and the General Population," Quantitative Studies in Economics and Population Research Reports 372, McMaster University.
    4. Dhippayom, Teerapon & Walker, Roger, 2008. "Impact of the reduction of the prescription charge in Wales on the prescribing of non-sedating antihistamines in primary care," Health Policy, Elsevier, vol. 87(3), pages 309-315, September.
    5. Fiorio, Carlo V. & Siciliani, Luigi, 2010. "Co-payments and the demand for pharmaceuticals: Evidence from Italy," Economic Modelling, Elsevier, vol. 27(4), pages 835-841, July.
    6. Noyce, Peter R. & Huttin, Christine & Atella, Vicenzo & Brenner, Gerhard & Haaijer-Ruskamp, Flora M. & Hedvall, Maj-Britt & Mechtler, Reli, 2000. "The cost of prescription medicines to patients," Health Policy, Elsevier, vol. 52(2), pages 129-145, June.
    7. M. Fasihul Alam & David Cohen & Frank Dunstan & Dyfrig Hughes & Philip Routledge, 2018. "Impact of the phased abolition of co‐payments on the utilisation of selected prescription medicines in Wales," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 236-243, January.
    8. Martin Chalkley;Ray Robinson, 1997. "Theory and Evidence on Cost Sharing in Health Care: An Economic Perspective," Monograph 000429, Office of Health Economics.
    9. Mielck, Andreas, 1998. "Perception of health inequalities in different social classes, by health professionals and health policy makers in Germany and the United Kingdom," Discussion Papers, Research Group Public Health P 98-202, WZB Berlin Social Science Center.

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    Keywords

    charges health care utilisation;

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