The Impact of Payment Policy for Physician-Administered Drugs

This project explores the causal effect of cost-plus Medicare payment policy for physician-administered drugs on the choice of drug prescribed and any associated health impact on patients. To estimate the effect of the cost-plus Medicare payment policy, the project focuses on the changes in drug choice that occurred following the 2013 Budget Sequester Act, which reduced physician reimbursement fees, but left patient cost-sharing unchanged; and following the abrupt price changes that occur when generic drugs enter the market. We will compare first line drugs versus more expensive biologics for inflammatory conditions, chemotherapy versus alternatives for cancer treatment, and infusions/injections versus patient-administered medications for a variety of chronic conditions. We will identify the effects on drug choice and, in turn, on various health outcomes, including patient mortality, hospital admissions, and readmissions.