Economic Incentives and Contracts: The Use of Psychotropic Medications
Contemporary Economic Policy, Vol. 26, Issue 1, pp. 49-72, January 2008
24 Pages Posted: 18 Jan 2008
Abstract
The advent of novel psychotropic medications has revolutionized treatments for mental illnesses over the past few decades. Concurrently, changes in mental health coverage, particularly for Medicaid patients, created economic incentives for insurance carriers to shift costs and to encourage the use of psychotropic drugs. To quantify these effects, based on the framework in Griliches seminal study on hybrid corn, we estimate logistic diffusion models using a longitudinal data set on Medicaid drug utilization. We find that financial incentives played a significant role in encouraging use of new medications that have lower physician specialty skill requirements.
JEL Classification: O30, O33, I18, L14
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Measurement Error in the Consumer Price Index: Where Do We Stand?
By David E. Lebow and Jeremy B. Rudd
-
Price Indexes for the Treatment of Depression
By Richard G. Frank, Ernst R. Berndt, ...
-
By Ernst R. Berndt, Anupa Bir, ...
-
Price Indexes for Acute Phase Treatment of Depression
By Ernst R. Berndt, Susan H. Busch, ...
-
The Boskin Commission Report: A Retrospective One Decade Later
-
Price Indexes for Medical Care Goods and Services: an Overview of Measurement Issues
By Ernst R. Berndt, David M. Cutler, ...
-
Pricing Heart Attack Treatments
By David M. Cutler, Joseph P. Newhouse, ...
-
Alternate Insurance Arrangements and the Treatment of Depression: What are the Facts?
By Ernst R. Berndt, Richard G. Frank, ...
-
Adolescent Depression: Diagnosis, Treatment, and Educational Attainment