publication . Preprint . 2010

Does Prescription Drug Adherence Reduce Hospitalizations and Costs?

William Encinosa; Didem Bernard; Avi Dor;
Open Access
  • Published: 01 Jan 2010
We estimate the impact of diabetic drug adherence on hospitalizations, ER visits, and hospital costs, using insurance claims from MarketScan® employer data. However, it is often difficult to measure the impact of drug adherence on hospitalizations since both adherence and hospitalizations may be correlated with unobservable patient severity. We control for such unobservables using propensity score methods and instrumental variables for adherence such as drug coinsurance levels and direct-to- consumer-advertising. We find a significant bias due to unobservable severity in that patients with more severe health are more apt to comply with medications. Thus, the rel...
free text keywords: jel:H51, jel:I11
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