Wednesday, 6 April, 2016 | 12:00 | Defense

Eva Hromádková: “Essays on Cost-Containment Measures in Health Care”

Dissertation Committee:
Randall K. Filer (chair)
Jan Hanousek (local chair)
Štěpán Jurajda


The topic of this dissertation is cost-containment measures in health care and their effects on various aspects of a patient's behavior. The dissertation consists of three chapters.

In the first chapter I assess the ability of gatekeeping restrictions within insurance plans to control the utilization of medical care through their influence on the choice of the initial provider. Empirical results are based on individual-level utilization panel data from the 2001-2006 US Medical Expenditure Panel Survey. I find only small differences between the types of initial provider chosen by individuals enrolled in gatekeeping and non-gatekeeping plans. Further, within gatekeeping plans, 21 percent of patients self-refer to specialists. Taken together, these findings imply that the intended cost-containment of gatekeeping - restriction of the utilization of specialist care - is surprisingly weak.

The second and third chapters make use of a unique natural experiment - a policy change that implemented patient cost-sharing in the Czech Republic starting in 2008. In the second chapter, my coauthor and I investigate the effects of the introduction of lump sum copayments on the utilization of prescription drugs by elderly patients. We find that after the introduction of copayments the number of prescriptions filled decreased by 29%. At the same time, however, total expenditures on prescription drugs dropped only in the first quarter of the postintroduction period and then returned to previous levels. This was partially due to behavioral responses of patients and physicians: a strategic shift of prescription purchases to the time immediately before the introduction of the reform, prescribing more packages on one prescription and an upward shift in the price composition of prescribed drugs.

In the third chapter, we complement the analysis by looking at the effects of the partial reversal of this policy, when regional governing bodies started to reimburse copayments for prescription drugs in the selected (region-owned) pharmacies. Using matched individual level data on the location of visits and prescription fillings, we analyzed how the variation in the prescription drugs' prices implied by copayment affected an individual's choice of pharmacy. Using both non-parametric and parametric estimation techniques, we find a significant shift in patients' preferences towards reimbursing pharmacies. We also identified main drivers of the shift which include monetary cost (proxied by number of prescriptions), type of physician, and distance as a measure of opportunity cost of time.

Full Text: “Essays on Cost-Containment Measures in Health Care” by Eva Hromádková