Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/270598 
Year of Publication: 
2021
Series/Report no.: 
CINCH Series No. 2021/08
Publisher: 
University of Duisburg-Essen, CINCH - Health Economics Research Center, Essen
Abstract: 
Cost‐control interventions that target physicians' clinical discretion are common in healthcare, but evidence on their efficacy is scarce; in particular for "soft" policies when liability is unlikely to be enforced by the regulator. We study the effectiveness of preferred drug policies (minimum prescription quotas of specific "preferred" drugs) in altering physicians practice styles within the high volume drug class of HMG‐CoA‐reductase inhibitors (statins) in the German statutory health insurance system. Using a nationally representative panel of ambulatory care physicians between 2011 and 2014, we exploit the decentralized institutional setting to estimate physician responses to variation in preferred drug policies across regional physician associations over time in a generalized difference‐in‐differences design. Results show that although the cost‐control mechanism increases average policy adherence, this effect is mainly driven by physicians with initially high use rates of preferred drugs. We argue that such misdirection may limit the policy's usefulness in reducing inappropriate practice variation among healthcare providers.
Subjects: 
Cost-control
Healthcare
Practice Style
Difference-in-differences
JEL: 
I12
I18
O33
H75
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.