Anja Sautmann, Brown University
Kalai Family Workshop in Applied Microeconomics
Nov 14 2017
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“The Contribution of Patients and Providers to the Overuse of Prescription Drugs”
There is ample evidence from developing countries that many patients who visit a doctor receive more, and more powerful, medications than they need. This is a barrier to subsidizing drugs in order to lower barriers for access. The tendency to over-treat could be driven by the demand or the supply side. On the one hand, the problem of “induced demand” by an “informed expert” suggests that doctors can lead patients to purchase more medication than they really want, perhaps because the doctor has a financial interest or evaluates costs and benefits of treatment differently from the patient. On the other hand, it has been argued that patients “demand” overtreatment and doctors feel compelled to comply. We conducted a randomized controlled trial in Bamako, Mali, on over-treatment with malaria medications, in which we reduce the price of malaria treatment with a voucher that we give either to patients, or only to doctors. This allows us to assess separately how the price reduction affects medication use either directly through demand, or through doctors steering this demand. We find evidence of patient-driven overmedication: with doctors' financial incentives constant, directly informing patients about the antimalarial subsidy increases use of the subsidy by 30 percent, significantly increasing the share of patients treated for malaria. At the same time, there is evidence that doctors reduce their revenue under the subsidy, and that they use the vouchers to steer patients away from purchasing more expensive malaria therapies.