Economics Research Seminar

Physician vs. Patient Incentives in Prescription Drug Choice

Sponsored by: Economics Department

Speaker(s): Michael Dickstein, Ph.D., Stanford University

Date & Time: Tuesday, April 1, 2014 from 4:15 p.m. to 5:45 p.m.

In response to the rise in health spending in the US, which totaled nearly $9000 per
capita in 2012, insurers and government payers use two mechanisms to direct spending toward the most valuable treatments. The rst set, \demand-side" incentives, impose costs on the patient to limit moral hazard. The second set, "supply-side" incentives, use the physician's payment as a tool to minimize agency conflicts. I design a new test of the relative e ectiveness of these two avenues in maximizing the value of treatment choices. Using variation in patients' and physicians' exposure to incentives, I find new evidence that physician-directed incentives may raise long-run costs. Physicians reduce oce-based primary care in response to new payment regimes, substituting prescription drugs as well as referrals for speciality care. Short-run costs fall, but patients relapse at higher rates. I discuss the likely mechanism generating this trade-o and its implication for disease-speci c insurance design.

Please join the Economics Department for a research seminar.  This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research.
Contact Information:

Teresa Kabat

Peter B. Lewis Building
11119 Bellflower Road, Room 118
Cleveland, OH 44106-7235
United States

Attachment: Physician vs. Patient Incentives in Prescription Drug Choice

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