Working Paper Series,
Research Institute of Industrial Economics

Abstract: The introduction of antibiotics as a medical treatment after World War II helped to dramatically increase life expectancy in the industrialized world. However, over-prescription of antibiotics during the last few decades has led to a sharp increase in multi-resistant bacteria, disarming once powerful anti-pathogens. This paper investigates the effects of increased competition between healthcare providers on prescription of antibiotics. The analysis makes use of a competition-inducing reform implemented in different counties in Sweden at different points in time between 2007 and 2010 for a difference-in-differences approach. Since the dataset contains monthly data on all prescribed antibiotics in Sweden it is possible to estimate the effects on all antibiotics prescribed, as well as on different subcategories of antibiotics. The results show that increased competition had a positive and significant effect on prescription of antibiotics. This increase in prescription of antibiotics was not associated with a reduction in sick leave.

Keywords: Healthcare; Competition; Competition reform; Antibiotics

JEL-codes: C23; H30; I11; I18

24 pages, First version: January 8, 2013. Revised: November 20, 2014. Earlier revisions: November 20, 2014.

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