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Am J Manag Care. 2005 Jan;11 Spec No:SP35-42.

Exploration of the impact of preferred drug lists on hospital and physician visits and the costs to Medicaid.

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  • 1Department of Pharmacy Practice, Purdue University School of Pharmacy & Pharmacal Sciences, West Lafayette, IN 47907-2051, USA.



To conduct an exploratory investigation of the possible effects of the implementation of a state Medicaid preferred drug list (PDL) on the average number of visits by Medicaid patients to hospitals and physicians, and to provide preliminary estimates of the Medicaid reimbursement costs of these additional visits.


A regression-based, difference-in-differences retrospective analysis using anonymized patient-level data on cardiovascular-related inpatient and outpatient hospital visits and procedures, and physician visits and procedures.


The impact of the implementation of a state Medicaid PDL on a test group of Medicaid cardiovascular patients was examined. A contemporaneous group of non-Medicaid cardiovascular patients from the same state were used as controls.


There was a statistically significant increase in the number of outpatient hospital visits and physician visits for the test group compared with the control group in the first 6 months after PDL implementation. There was a positive but statistically insignificant increase in the number of inpatient hospital visits. All increases in visits for the test group compared with the control group in the second 6 months after PDL implementation were positive but statistically insignificant. As a result, estimated average Medicaid reimbursement costs for cardiovascular patients in the state increased during that year.


The observed range of increases in hospital and physician visits is evidence for the possible existence of an unintended consequence of PDL implementation by state Medicaid programs. Precautionary research in this area is clearly called for.

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