Essays in health care analytics

Abstract

Rising pharmaceutical expenditure is burdening global health care systems and also coincides with the increased spending on pharmaceutical marketing. Therefore, this dissertation proposes several research questions related to the physicians’ prescribing to successfully use limited resources. The first essay investigates how an increase in patient information sharing among doctors impacts health care costs. Specifically, the study explores this impact through two mechanisms - the informative role of patient health conditions and the cross-monitoring role against doctor-driven induced health care demands. The study utilizes a unique policy intervention (a drug utilization review) introduced in 2009 in Korea that enables doctors to share outpatients’ prescription histories. Using difference-in-differences, the study finds that, when patient information is improved, there is a reduction in pharmaceutical spending. This result is especially true for those patients who have relatively weak information-sharing capabilities. Using the data on the amount of antibiotics prescribed for the common cold, the study shows that a cross-monitoring of prescriptions among doctors reduces the amount of unnecessary prescriptions and thus health care spending. The second essay finds empirical evidence that supports the possibility that a physician has different values for different firms. The study measures a physician’s brand-specific future value estimated by two stochastic models, BG/NBD and GG model, which consider physicians’ various prescription history information including frequency, timing, and quantity decisions. Using physician-level panel data for erectile dysfunction drug market where the three drugs (Viagra, Levitra, and Cialis) compete in the category, the result shows that there exists misallocation of detailing, especially for Levitra. This dissertation provides implications to both policymakers and pharmaceutical firms to successfully utilize limited resources in the pharmaceutical market.