Estimating the Impact of Medical Innovation: A Case Study of HIV Antiretroviral Treatments

Duggan, Mark; Evans, William N.

doi:10.2202/1558-9544.1102

Cited by 33 publications

(35 citation statements)

References 56 publications

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“…Similarly, the share of pharmaceuticals on public agencies' budgets has been increasing. Duggan and Evans (2007) suggest that new drugs not only lower the mortality rate by 68% but they also decrease the short-term health care spending by reducing expenditures on other categories of medical care.…”

Section: Pharmaceuticalsmentioning

confidence: 99%

The effect of newer drugs on health spending: do they really increase the costs?

Ci̇van

Köksal

2009

Health Economics

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Abstract. We analyze the influence of technological progress on pharmaceuticals on rising health expenditures using US State level panel data. Improvements in medical technology are believed to be partly responsible for rapidly rising health expenditures. Even if the technological progress in medicine improves health outcomes and life quality, it can also increase the expenditure on health care. Our findings suggest that newer drugs increase the spending on prescription drugs since they are usually more expensive than their predecessors. However, they lower the demand for other types of medical services, which causes the total spending to decline. A one-year decrease in the average age of prescribed drugs causes per capita health expenditures to decrease by $31.92. The biggest decline occurs in spending on hospital and home health care due to newer drugs.

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Section: Pharmaceuticalsmentioning

confidence: 99%

The effect of newer drugs on health spending: do they really increase the costs?

Ci̇van

Köksal

2009

Health Economics

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“…This is to be expected, since Duggan and Evans (2008) estimated that in California during the period 1994-2003, average annual Medicaid medical expenditure (the sum of pharmaceutical, outpatient and inpatient expenditure) per AIDS patient was about $18,800.…”

Section: Per Capita Medical Expenditurementioning

confidence: 91%

The quality of medical care, behavioral risk factors, and longevity growth

Lichtenberg¹

2010

Int J Health Care Finance Econ

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The rate of increase of longevity has varied considerably across U.S. states since 1991. This paper examines the effect of the quality of medical care, behavioral risk factors (obesity, smoking, and AIDS incidence), and other variables (education, income, and health insurance coverage) on life expectancy and medical expenditure using longitudinal state-level data. We examine the effects of three different measures of the quality of medical care. The first is the average quality of diagnostic imaging procedures, defined as the fraction of procedures that are advanced procedures. The second is the average quality of practicing physicians, defined as the fraction of physicians that were trained at top-ranked medical schools. The third is the mean vintage (FDA approval year) of outpatient and inpatient prescription drugs. Life expectancy increased more rapidly in states where (1) the fraction of Medicare diagnostic imaging procedures that were advanced procedures increased more rapidly; (2) the vintage of self- and provider-administered drugs increased more rapidly; and (3) the quality of medical schools previously attended by physicians increased more rapidly. States with larger increases in the quality of diagnostic procedures, drugs, and physicians did not have larger increases in per capita medical expenditure. We perform several tests of the robustness of the life expectancy model. Controlling for per capita health expenditure (the "quantity" of healthcare), and eliminating the influence of infant mortality, has virtually no effect on the healthcare quality coefficients. Controlling for the adoption of an important nonmedical innovation also has little influence on the estimated effects of medical innovation adoption on life expectancy.

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“…Those differences are attributed to economic and regulatory incentives in the health care systems. Duggan and Evans (2005) estimate the impact of medical innovation in the case of HIV antiretroviral treatments in the period 1993-2003 from a sample of more than 10,000 Medicaid patients living in California who were diagnosed HIV/AIDS.…”

Section: Introductionmentioning

confidence: 99%

Technological Adoption in Health Care

Barros

Martínez-Giralt

2010

SSRN Journal

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This paper addresses the impact of payment systems on the rate of technology adoption. We present a model where technological shift is driven by demand uncertainty, increased patients' benefit, financial variables, and the reimbursement system to providers. Two payment systems are studied: cost reimbursement and (two variants of) DRG. According to the system considered, adoption occurs either when patients' benefits are large enough or when the differential reimbursement across technologies offsets the cost of adoption. Cost reimbursement leads to higher adoption of the new technology if the rate of reimbursement is high relative to the margin of new vs. old technology reimbursement under DRG. Having larger patient benefits favors more adoption under the cost reimbursement payment system, provided that adoption occurs initially under both payment systems.

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Estimating the Impact of Medical Innovation: A Case Study of HIV Antiretroviral Treatments

Cited by 33 publications

References 56 publications

The effect of newer drugs on health spending: do they really increase the costs?

The effect of newer drugs on health spending: do they really increase the costs?

The quality of medical care, behavioral risk factors, and longevity growth

Technological Adoption in Health Care

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