Abstract
Many healthcare systems prohibit primary care physicians from dispensing the drugs they prescribe due to concerns that this encourages excessive, ineffective or unnecessarily costly prescribing. Using data from the English National Health Service for 2011–2018, we estimate the impact of physician dispensing rights on prescribing behavior at the extensive margin (comparing practices that dispense and those that do not) and the intensive margin (comparing practices with different proportions of patients to whom they dispense). We control for practices selecting into dispensing based on observable (OLS, entropy balancing) and unobservable practice characteristics (2SLS). We find that physician dispensing increases drug costs per patient by 3.1%, due to more, and more expensive, drugs being prescribed. Reimbursement is partly based on a fixed fee per package dispensed and we find that dispensing practices prescribe smaller packages. As the proportion of the practice population for whom they can dispense increases, dispensing practices behave more like non-dispensing practices.
| Original language | English |
|---|---|
| Pages (from-to) | 696-713 |
| Number of pages | 18 |
| Journal | Health Economics (United Kingdom) |
| Volume | 33 |
| Issue number | 4 |
| Early online date | 27 Dec 2023 |
| DOIs | |
| Publication status | Published - 1 Apr 2024 |
Bibliographical note
Publisher Copyright:© 2023 The Authors. Health Economics published by John Wiley & Sons Ltd.
Keywords
- drug expenditure
- financial incentives
- physician agency
- physician dispensing
- primary care