The Effect of Pharmaceutical Utilization and Innovation on Hospitalization and Mortality

35 Pages Posted: 22 Jun 2000 Last revised: 20 Sep 2014

See all articles by Frank R. Lichtenberg

Frank R. Lichtenberg

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: January 1996

Abstract

This paper presents an econometric analysis of the effect of changes in the quantity and type of pharmaceuticals prescribed by physicians in outpatient visits on rates of hospitalization, surgical procedure, mortality, and related variables. It examines the statistical relationship across diseases between changes in outpatient pharmaceutical utilization and changes in inpatient care utilization and mortality during the period 1980-92. The estimates indicate that the number of hospital stays, bed-days, and surgical procedures declined most rapidly for those diagnoses with the greatest increase in the total number of drugs prescribed and the greatest change in the distribution of drugs, by molecule. The estimates imply that an increase of 100 prescriptions is associated with 1.48 fewer hospital admissions, 16.3 fewer hospital days, and 3.36 fewer inpatient surgical procedures. A $1 increase in pharmaceutical expenditure is associated with a $3.65 reduction in hospital care expenditure.

Suggested Citation

Lichtenberg, Frank R., The Effect of Pharmaceutical Utilization and Innovation on Hospitalization and Mortality (January 1996). NBER Working Paper No. w5418, Available at SSRN: https://ssrn.com/abstract=225478

Frank R. Lichtenberg (Contact Author)

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