Three Essays on Health Economics.

Abstract

This dissertation consists of three essays on health economics. Lack of incentive to protect asset has been one of the theoretical explanations for the limited private long-term care insurance market. State long-term care insurance partnership program allows policy holders to protect a certain amount of their assets and become eligible for Medicaid after they exhaust their policy benefits. The first essay examines whether the asset protection from partnership program attracted people to buy long-term care insurance. The study found that implementation of long-term care partnership program did not increases long-term care insurance coverage among both general population and those who are more likely to be attracted to the asset protection feature. The results, to some extent, support existing theories that protecting asset and leaving bequests to children and spouse are not attracting people to purchase private long-term care insurance coverage. The inverse correlation between the complexity of a drug regimen and medication adherence is well established. Fixed-dose combination (FDC) therapies are hypothesized to enhance compliance by decreasing the number of required pills. The second essay compares adherence of an FDC to a 2-pill regimen. Longitudinal data from a large claims database were used to assess adherence. Propensity score and fixed effect methods were used to mitigate concerns related to nonrandom assignment of patients to treatments. Adherence was measured by both medication possession ratio and refill persistency. Compared to 2-pill therapy, a FDC resulted in important increases in patient adherence. Economic analyses are warranted to determine whether the clinical benefits attributable to the adherence gains are worth the incremental cost of a FDC. Focus On Diabetes is a drug benefit experiment conducted on the University of Michigan employees and their dependents. The FOD experiment reduced drug co-payments of four types of prescription medications for diabetic patients. The third paper evaluates how the co-payment reduction affected patient formulary tier utilization. The analyses show that the co-payment reduction did not change the tier utilization. The availability of new generic drugs after the patents of brand-name drugs expired and drug formulary change, instead, had significant impact on tier shifting.