Scandinavian Working Papers in Economics

Umeå Economic Studies,
Umeå University, Department of Economics

No 639: Fixed Budgets as a Cost Containment Measure for Pharmaceuticals

David Granlund (), Niklas Rudholm () and Magnus Wikström ()
Additional contact information
David Granlund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Niklas Rudholm: Department of Economics, Umeå University, Postal: Department of Economics, Umeå University, S 901 87 Umeå, Sweden
Magnus Wikström: Department of Economics, Umeå University, Postal: Department of Economics, Umeå University, S 901 87 Umeå, Sweden

Abstract: In the county of Västerbotten, Sweden, there are two health centres which (contrary to all other health centres in the region) have a strict responsibility over their pharmaceutical budget. The purpose of this paper is to examine if the prices and quantities of pharmaceuticals prescribed by physicians working at these health centres differ significantly from those prescribed by physicians at health centres with open-ended budgets. Estimation results using matching methods, which allows us to compare similar patients at the different health centres, show that the introduction of fixed pharmaceutical budgets did not affect physicians' prescription behaviour.

Keywords: pharmaceuticals; cost containment; propensity score matching

JEL-codes: I11; I18

27 pages, August 27, 2004

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