ArticleThe quarterly journal of economics2015
THE RESPONSE OF DRUG EXPENDITURE TO NON-LINEAR CONTRACT DESIGN: EVIDENCE FROM MEDICARE PART D.
Article in The quarterly journal of economics, 2015. The graph could read no effect estimate from its abstract, so it casts no vote on the map. Cited by 24 papers.
What it found
Each row is one number read from the abstract, on the scale the paper reported it, with its interval. Left of the dashed line favours the treatment, right favours the comparator. Under each row is the sentence it came from. New to these charts? A ten-minute tutorial.
The abstract states no effect estimate the extractor could read, or names no intervention and outcome on the map, so this paper lights no cell and moves no belief. It is still indexed, cited and linked below.
The trial behind it
Trials whose registry record cites this paper, or whose number appears in the abstract. A trial that started after this paper was published is citing it as background, not reporting it.
Neither the registry nor the abstract names a trial number. If this is a trial report, that itself is worth knowing.
Who cites it
24 citing papers in PubMed.
- Forward-looking Behavior in Health Insurance.The European journal of health economics : HEPAC : health economics in prevention and care · 2026Article
- The impact of the urban-rural residents' medical insurance integration on rural residents' out-of-pocket medical costs: based on the deductible, reimbursement rate, and ceiling line.Frontiers in public health · 2025Article
- The Health Costs of Cost Sharing.The quarterly journal of economics · 2024Article
- Time Aggregation in Health Insurance Deductibles.American economic journal. Economic policy · 2024Article
- Effects of Medicare Part D coverage gap closure on utilization of branded and generic drugs.Health economics · 2023Article
- Retrenchment of Wisconsin's Well Woman Program and changes in insurance coverage around the Affordable Care Act.Preventive medicine reports · 2022Article
- The Liquidity Sensitivity of Healthcare Consumption: Evidence from Social Security Payments.American economic review. Insights · 2022Article
- Claims-based algorithms for common chronic conditions were efficiently constructed using machine learning methods.PloS one · 2021Article
- Subsidy Design in Privately Provided Social Insurance: Lessons from Medicare Part D.The journal of political economy · 2020Article
- Can income-based co-payment rates improve disparity? The case of the choice between brand-name and generic drugs.BMC health services research · 2019Article
- Payment systems and hospital length of stay: a bunching-based evidence.International journal of health economics and management · 2019Article
- Provider Incentives and Healthcare Costs: Evidence from Long-Term Care Hospitals.Econometrica : journal of the Econometric Society · 2018Article
- Moral Hazard in Health Insurance: What We Know and How We Know It.Journal of the European Economic Association · 2018Article
- Prescription Drug Use under Medicare Part D: A Linear Model of Nonlinear Budget Sets.Journal of public economics · 2018Article
- Private provision of social insurance: drug-specific price elasticities and cost sharing in Medicare Part D.American economic journal. Economic policy · 2018Article
- The moral hazard effects of consumer responses to targeted cost-sharing.Journal of health economics · 2017Article
- Health care demand elasticities by type of service.Journal of health economics · 2017Article
- Financial Burden for Patients With Chronic Myeloid Leukemia Enrolled in Medicare Part D Taking Targeted Oral Anticancer Medications.Journal of oncology practice · 2017Article
- Technological Change and Risk Adjustment: Benefit Design Incentives in Medicare Part D.American economic journal. Economic policy · 2017Article
- Bunching at the kink: implications for spending responses to health insurance contracts.Journal of public economics · 2017Article
Corrections and comments
PubMed lists nothing against this paper. Absence here is not a guarantee, only a check that was made.
Authors and funding
3 authors.
Funding
Abstract
We study the demand response to non-linear price schedules using data on insurance contracts and prescription drug purchases in Medicare Part D. We exploit the kink in individuals' budget set created by the famous "donut hole," where insurance becomes discontinuously much less generous on the margin, to provide descriptive evidence of the drug purchase response to a price increase. We then specify and estimate a simple dynamic model of drug use that allows us to quantify the spending response along the entire non-linear budget set. We use the model for counterfactual analysis of the increase in spending from "filling" the donut hole, as will be required by 2020 under the Affordable Care Act. In our baseline model, which considers spending decisions within a single year, we estimate that "filling" the donut hole will increase annual drug spending by about $150, or about 8 percent. About one-quarter of this spending increase reflects "anticipatory" behavior, coming from beneficiaries whose spending prior to the policy change would leave them short of reaching the donut hole. We also present descriptive evidence of cross-year substitution of spending by individuals who reach the kink, which motivates a simple extension to our baseline model that allows - in a highly stylized way - for individuals to engage in such cross year substitution. Our estimates from this extension suggest that a large share of the $150 drug spending increase could be attributed to cross-year substitution, and the net increase could be as little as $45 per year.
Identifiers
What OpenQuestion holds
Registered trials
Read under generation 80e0d062 · epoch 390. Bibliography from PubMed, PubMed Central and OpenAlex; grants from NIH RePORTER; trial links from ClinicalTrials.gov; estimates, votes and beliefs from the OpenQuestion graph.