IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v27y2018i8p1264-1283.html
   My bibliography  Save this article

Hospitals and the generic versus brand‐name prescription decision in the outpatient sector

Author

Listed:
  • Gerald J. Pruckner
  • Thomas Schober

Abstract

Health care payers try to reduce costs by promoting the use of cheaper generic drugs. We show strong interrelations in drug prescriptions between the inpatient and outpatient sectors by using a large administrative dataset from Austria. Patients with prior hospital visits have a significantly lower probability of receiving a generic drug in the outpatient sector. The size of the effect depends on both the patient and doctor characteristics, which could be related to the differences in hospital treatment and heterogeneity in the physicians' adherence to hospital choices. Our results suggest that hospital decisions create spillover costs in health care systems with separate funding for inpatient and outpatient care.

Suggested Citation

  • Gerald J. Pruckner & Thomas Schober, 2018. "Hospitals and the generic versus brand‐name prescription decision in the outpatient sector," Health Economics, John Wiley & Sons, Ltd., vol. 27(8), pages 1264-1283, August.
    • Handle: RePEc:wly:hlthec:v:27:y:2018:i:8:p:1264-1283
    DOI: 10.1002/hec.3774
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.3774
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.3774?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dylst, Pieter & Vulto, Arnold & Simoens, Steven, 2011. "Tendering for outpatient prescription pharmaceuticals: What can be learned from current practices in Europe?," Health Policy, Elsevier, vol. 101(2), pages 146-152, July.
    2. Brekke, Kurt Richard & Holmås, Tor Helge & Straume, Odd Rune, 2013. "Margins and market shares: Pharmacy incentives for generic substitution," European Economic Review, Elsevier, vol. 61(C), pages 116-131.
    3. repec:bla:jindec:v:48:y:2000:i:3:p:349-69 is not listed on IDEAS
    4. Liu, Ya-Ming & Yang, Yea-Huei Kao & Hsieh, Chee-Ruey, 2009. "Financial incentives and physicians' prescription decisions on the choice between brand-name and generic drugs: Evidence from Taiwan," Journal of Health Economics, Elsevier, vol. 28(2), pages 341-349, March.
    5. Judith K. Hellerstein, 1998. "The Importance of the Physician in the Generic Versus Trade-Name Prescription Decision," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 108-136, Spring.
    6. Toshiaki Iizuka, 2012. "Physician Agency and Adoption of Generic Pharmaceuticals," American Economic Review, American Economic Association, vol. 102(6), pages 2826-2858, October.
    7. Lundin, Douglas, 2000. "Moral hazard in physician prescription behavior," Journal of Health Economics, Elsevier, vol. 19(5), pages 639-662, September.
    8. Georg Heinze & Milan Hronsky & Berthold Reichardt & Christoph Baumgärtel & Marcus Müllner & Anna Bucsics & Wolfgang Winkelmayer, 2015. "Potential Savings in Prescription Drug Costs for Hypertension, Hyperlipidemia, and Diabetes Mellitus by Equivalent Drug Substitution in Austria: A Nationwide Cohort Study," Applied Health Economics and Health Policy, Springer, vol. 13(2), pages 193-205, April.
    9. Rauf Gönenç & Maria M. Hofmarcher & Andreas Wörgötter, 2011. "Reforming Austria's Highly Regarded but Costly Health System," OECD Economics Department Working Papers 895, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alexander Ahammer & Ivan Zilic, 2017. "Do Financial Incentives Alter Physician Prescription Behavior? Evidence from Random Patient-GP Allocations," Working Papers 1701, The Institute of Economics, Zagreb.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Granlund, David & Sundström, David, 2018. "Physicians prescribing originals causes welfare losses," Economics Letters, Elsevier, vol. 170(C), pages 143-146.
    2. Skipper, Niels & Vejlin, Rune, 2015. "Determinants of generic vs. brand drug choice: Evidence from population-wide Danish data," Social Science & Medicine, Elsevier, vol. 130(C), pages 204-215.
    3. Izhak, Olena, 2019. "Extra costs of integrity: Pharmacy markups and generic substitution in Finland," DICE Discussion Papers 307, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    4. Daniel Burkhard & Christian P. R. Schmid & Kaspar Wüthrich, 2019. "Financial incentives and physician prescription behavior: Evidence from dispensing regulations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1114-1129, September.
    5. Crea, Giovanni & Galizzi, Matteo M. & Linnosmaa, Ismo & Miraldo, Marisa, 2019. "Physician altruism and moral hazard: (no) Evidence from Finnish national prescriptions data," Journal of Health Economics, Elsevier, vol. 65(C), pages 153-169.
    6. Magno, Cielo & Guzman, Ricardo Rafael S., 2019. "Drug price sensitivity among physicians in a developing healthcare system: Evidence from the Philippine market for statins and beta blockers," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 268-279.
    7. Boris Kaiser & Christian Schmid, 2016. "Does Physician Dispensing Increase Drug Expenditures? Empirical Evidence from Switzerland," Health Economics, John Wiley & Sons, Ltd., vol. 25(1), pages 71-90, January.
    8. Brekke, Kurt Richard & Holmås, Tor Helge & Straume, Odd Rune, 2013. "Margins and market shares: Pharmacy incentives for generic substitution," European Economic Review, Elsevier, vol. 61(C), pages 116-131.
    9. Leemore Dafny & Christopher Ody & Matt Schmitt, 2017. "When Discounts Raise Costs: The Effect of Copay Coupons on Generic Utilization," American Economic Journal: Economic Policy, American Economic Association, vol. 9(2), pages 91-123, May.
    10. Makoto Kakinaka & Ryuta Kato, 2013. "Regulated medical fee schedule of the Japanese health care system," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 301-317, December.
    11. Toshiaki Iizuka, 2012. "Physician Agency and Adoption of Generic Pharmaceuticals," American Economic Review, American Economic Association, vol. 102(6), pages 2826-2858, October.
    12. Liu, Ya-Ming & Yang, Yea-Huei Kao & Hsieh, Chee-Ruey, 2012. "Regulation and competition in the Taiwanese pharmaceutical market under national health insurance," Journal of Health Economics, Elsevier, vol. 31(3), pages 471-483.
    13. Mariana Carrera & Dana Goldman & Geoffrey Joyce, 2013. "Heterogeneity in Cost-Sharing and Cost-Sensitivity, and the Role of the Prescribing Physician," NBER Working Papers 19186, National Bureau of Economic Research, Inc.
    14. Lagarde, Mylène & Blaauw, Duane, 2022. "Overtreatment and benevolent provider moral hazard: Evidence from South African doctors," Journal of Development Economics, Elsevier, vol. 158(C).
    15. Granlund, David, 2012. "The effect of pharmacies’ right to negotiate discounts on the market share of parallel imported pharmaceuticals," HUI Working Papers 75, HUI Research.
    16. Meng‐Chi Tang, 2023. "A structural analysis of physician agency and pharmaceutical demand," Health Economics, John Wiley & Sons, Ltd., vol. 32(7), pages 1453-1477, July.
    17. Meng-Chi Tang & Yi-Nong Wu, 2020. "Medical providers as double agents in a universal health care system: evidence from generic pharmaceutical adoption in Taiwan," Empirical Economics, Springer, vol. 59(1), pages 169-203, July.
    18. Lagarde, Mylène & Blaauw, Duane, 2022. "Overtreatment and benevolent provider moral hazard: evidence from South African doctors," LSE Research Online Documents on Economics 115383, London School of Economics and Political Science, LSE Library.
    19. Tianyan Hu & Sandra L. Decker & Shin-Yi Chou, 2014. "The Impact of Health Insurance Expansion on Physician Treatment Choice: Medicare Part D and Physician Prescribing," NBER Working Papers 20708, National Bureau of Economic Research, Inc.
    20. Mengna Luan & Wenjing Shi & Zhigang Tao & Hongjie Yuan, 2023. "When patients have better insurance coverage in China: Provider incentives, costs, and quality of care," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1073-1106, October.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:27:y:2018:i:8:p:1264-1283. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.