An empirical investigation on the economic impact of shared patient information among doctors

ABSTRACT

This study investigates how an increase in patient information sharing among doctors impacts healthcare costs. To this end, we explore this impact through two mechanisms – the informative role of patient health conditions and the cross-monitoring role against doctor-driven induced healthcare demands. We utilize a unique policy intervention (a drug utilization review) introduced in 2009 in Korea that enables doctors to share outpatients’ prescription histories. Using difference-in-differences, we found that, when patient information is improved, there is a reduction in pharmaceutical spending. This result is especially true for those patients who have relatively weak information-sharing capabilities. Using data on the amount of antibiotics prescribed for the common cold, we find that a cross-monitoring of prescriptions among doctors reduces the amount of unnecessary prescriptions and thus healthcare spending.

KEYWORDS:

• Principal-agent problem
• information transmission
• medical costs
• physician-induced demand
• drug utilization review

JEL CLASSIFICATION:

• I10
• I18

Acknowledgments

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2018S1A3A2075175) and by a Korea University Grant (K1908581).

Disclosure statement

No potential conflict of interest was reported by the authors.