Economic incentives in outpatient care and patient demand for pharmaceuticals. A study of antibiotics and addictive drugs prescriptions

Abstract

The questions asked in this thesis relate to the economic incentives and characteristics of the health care market, which may result in suboptimal drug prescription. We consider two types of pharmaceuticals, such as antibiotics and addictive drugs. These pharmaceuticals are interesting because their use/misuse is associated with costs both at the individual and societal levels. The decision about the prescription of both antibiotics and addictive drugs is ideally made by a doctor, and over-the-counter sales are not available. A good share of the prescriptions is made in outpatient care or primary care (a part of outpatient care). This market is characterised by asymmetric information and may suffer from economic disincentives, which, together with patient-induced demand, may result in drug misuse. Thus there is a need for solutions aimed to facilitate optimal drug consumption, i.e. reducing consumption to a minimum consumption level, given that patients are effectively treated. This thesis considers several characteristics of the outpatient care market, such as free choice of provider, competition, and financial incentives within a health care centre to be important factors contributing to drug misuse. Knowledge about driving mechanisms is important for understanding how policies for more efficient antibiotic and addictive drugs consumption can be achieved. The first paper in the thesis relates to the ownership type of health care centres. It finds that private health care centres in the Västerbotten county of Sweden have a higher share of prescriptions for antibiotics than public ones. The second paper focuses on the competition between general practitioners and antibiotic prescription in Norwegian municipalities. The paper shows that the level of competition may be an important factor contributing to a more frequent antibiotic prescription. The third paper relates to the presence of free choice of the health care provider and uses the prescription data from Västerbotten county of Sweden to investigate patients' demand for addictive drugs and how a strategy to switch providers may affect individual drug consumption.