We would like to thank seminar participants at the Conference of the American Society of Health Economists and the APPAM Fall Research Conference for helpful comments, especially from our discussants Dean Lillard and Melinda Buntin. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Overdose deaths from prescription opioid pain relievers nearly quadrupled between 1999 and 2010. We study the consequences of one of the largest supply disruptions to date to abusable opioids—the introduction of an abuse-deterrent version of OxyContin in 2010. Supply-side interventions that limit access to opioids may have the unintended consequence of increasing use of substitute drugs, including heroin. Exploiting cross-state variation in OxyContin exposure, we find that states with the highest initial rates of OxyContin misuse experienced the largest increases in heroin deaths. Our results imply that the recent heroin epidemic is largely due to the reformulation of OxyContin. (JEL I12, I18)

Overdose deaths involving opioids have increased dramatically since the 1990s, leading to the worst drug overdose epidemic in U.S. history, but there is limited empirical evidence about the initial causes. In this paper, we examine the role of the 1996 introduction and marketing of OxyContin as a potential leading cause of the opioid crisis. We leverage cross-state variation in exposure to OxyContin's introduction due to a state policy that substantially limited OxyContin's early entry and marketing in select states. Recently unsealed court documents involving Purdue Pharma show that state-based triplicate prescription programs posed a major obstacle to sales of OxyContin and suggest that less marketing was targeted to states with these programs. We find that OxyContin distribution was more than 50% lower in “triplicate states” in the years after OxyContin's launch. While triplicate states had higher rates of overdose deaths prior to 1996, this relationship flipped shortly after the launch and triplicate states saw substantially slower growth in overdose deaths, continuing even twenty years after OxyContin's introduction. Our results show that the introduction and marketing of OxyContin explain a substantial share of overdose deaths over the last two decades.

Overdose deaths involving opioids have increased dramatically since the mid-1990s, leading to the worst drug overdose epidemic in U.S. history, but there is limited empirical evidence on the initial causes. In this paper, we examine the role of the 1996 introduction and marketing of OxyContin as a potential leading cause of the opioid crisis. We leverage cross-state variation in exposure to OxyContin's introduction due to a state policy that substantially limited OxyContin's early entry and marketing in select states. Recently-unsealed court documents involving Purdue Pharma show that state-based triplicate prescription programs posed a major obstacle to sales of OxyContin and suggest that less marketing was targeted to states with these programs. We find that OxyContin distribution was about 50% lower in "triplicate states" in the years after the launch. While triplicate states had higher rates of overdose deaths prior to 1996, this relationship flipped shortly after the launch and triplicate states saw substantially slower growth in overdose deaths, continuing even twenty years after OxyContin's introduction. Our results show that the introduction and marketing of OxyContin explain a substantial share of overdose deaths over the last two decades.

No abstract

Some Medicare beneficiaries who place 911 calls to request an ambulance might safely be cared for in settings other than the emergency department (ED) at lower cost. Using 2005-09 Medicare claims data and a validated algorithm, we estimated that 12.9-16.2 percent of Medicare-covered 911 emergency medical services (EMS) transports involved conditions that were probably nonemergent or primary care treatable. Among beneficiaries not admitted to the hospital, about 34.5 percent had a low-acuity diagnosis that might have been managed outside the ED. Annual Medicare EMS and ED payments for these patients were approximately $1 billion per year. If Medicare had the flexibility to reimburse EMS for managing selected 911 calls in ways other than transport to an ED, we estimate that the federal government could save $283-$560 million or more per year, while improving the continuity of patient care. If private insurance companies followed suit, overall societal savings could be twice as large.

No abstract

The health care industry has experienced massive consolidation over the past decade. Much of the consolidation has been vertical (with hospitals acquiring physician practices) instead of horizontal (with physician practices or hospitals merging with similar entities). We documented the increase in vertical integration in the market for cancer care in the period 2003-15, finding that the rate of hospital or health system ownership of practices doubled from about 30 percent to about 60 percent. The two most commonly cited explanations for this consolidation are a 2005 Medicare Part B payment reform that dramatically reduced reimbursement for chemotherapy drugs, and the expansion of hospital eligibility for the 340B Drug Discount Program under the Affordable Care Act (ACA). To evaluate the evidence for these explanations, we used difference-in-differences methods to assess whether consolidation increased more in areas with greater exposure to each policy than in areas with less exposure. We found little evidence that either policy contributed to vertical integration. Rather, increased consolidation in the market for cancer care may be part of a broader post-ACA trend toward integrated health care systems.