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Health Econ. 2016 Jan;25(1):71-90. doi: 10.1002/hec.3124. Epub 2014 Nov 13.

Does Physician Dispensing Increase Drug Expenditures? Empirical Evidence from Switzerland.

Author information

1
Department of Economics and Center for Regional Economic Development (CRED), University of Bern, Bern, Switzerland.

Abstract

This paper analyzes whether the opportunity for physicians to dispense drugs increases healthcare expenditures. We study the case of Switzerland, where dispensing physicians face financial incentives to overprescribe and sell more expensive pharmaceuticals. Using comprehensive physician-level data, we exploit the regional variation in the dispensing regime to estimate causal effects. The empirical strategy consists of a doubly-robust estimation that combines inverse probability weighting with regression. Our main finding suggests that dispensing leads to higher drug costs on the order of 34% per patient.

KEYWORDS:

drug expenditures; healthcare costs; physician dispensing; supply-induced demand; treatment effects

PMID:
25393362
DOI:
10.1002/hec.3124
[Indexed for MEDLINE]

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