Civan, Abdülkadir and Koksal, Bulent (2007): The Effect of Newer Drugs on Health Spending: Do They Really Increase the Costs?
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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.
|Item Type:||MPRA Paper|
|Original Title:||The Effect of Newer Drugs on Health Spending: Do They Really Increase the Costs?|
|Keywords:||Health care expenditure; pharmaceuticals; technology diffusion|
|Subjects:||I - Health, Education, and Welfare > I1 - Health > I11 - Analysis of Health Care Markets
C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models
I - Health, Education, and Welfare > I1 - Health > I10 - General
|Depositing User:||Bulent Koksal|
|Date Deposited:||22. Jan 2008 17:16|
|Last Modified:||21. Sep 2015 16:40|