000			03181cam a22003377 4500
001			w10738
003			NBER
005			20211020112721.0
006			m o d
007			cr cnu||||||||
008			210910s2004 mau fo 000 0 eng d
100	1		_aDor, Avi.
245	1	0	_aHow Does Cost-Sharing Affect Drug Purchases? Insurance Regimes in the Private Market for Prescription Drugs / _cAvi Dor, William Encinosa.
260			_aCambridge, Mass. _bNational Bureau of Economic Research _c2004.
300			_a1 online resource: _billustrations (black and white);
490	1		_aNBER working paper series _vno. w10738
500			_aSeptember 2004.
520	3		_aInsurance for prescription drugs is characterized by two types of cost-sharing: flat copayments and variable coinsurance. We develop a theoretical model to show that refill purchases of preventive drugs (compliance) are lower under coinsurance due to the consumer's exposure to variation in drug prices. Coinsurance creates countervailing incentives. Consumers who never comply under flat copayments might find it optimal to comply if they drew a relatively low price under coinsurance. In contrast, consumers who always comply under flat copayments might stop complying if they drew a relatively high price under coinsurance. Our theory shows the second effect dominates under certain distributional assumptions about health states. Empirically, we derive comparable models for compliance behavior in the two regimes. Using claims data from eight large firms, we focus our analysis on diabetes, a common chronic condition that leads to severe complications when not continuously treated with medications. Propensity score methods are used to create matched samples for the two insurance regimes. We find that when coinsurance and flat copayments have the same expected out-of-pocket of $9, at least 34% of patients under copayments would fully comply and refill their medication over the next 90 days, compared to only 24% under coinsurance. Similarly, under copayments, moving from the 25th percentile to the 75th percentile of cost sharing results in a significantly lower shift into the non-compliance state compared with coinsurance. Thus, the empirical results confirm the main theoretical predictions. This research is a substantial revision and extension of our earlier 2004 NBER working paper no. 10738.
530			_aHardcopy version available to institutional subscribers
538			_aSystem requirements: Adobe [Acrobat] Reader required for PDF files.
538			_aMode of access: World Wide Web.
588	0		_aPrint version record
690		7	_aI11 - Analysis of Health Care Markets _2Journal of Economic Literature class.
690		7	_aL11 - Production, Pricing, and Market Structure • Size Distribution of Firms _2Journal of Economic Literature class.
700	1		_aEncinosa, William.
710	2		_aNational Bureau of Economic Research.
830		0	_aWorking Paper Series (National Bureau of Economic Research) _vno. w10738.
856	4	0	_uhttps://www.nber.org/papers/w10738
856			_yAcceso en línea al DOI _uhttp://dx.doi.org/10.3386/w10738
942			_2ddc _cW-PAPER
999			_c337429 _d295991