Cost-offsets of prescription drug expenditures: data analysis via a copula-based bivariate dynamic hurdle model.

In this paper, we estimate a copula-based bivariate dynamic hurdle model of prescription drug and nondrug expenditures to test the cost-offset hypothesis, which posits that increased expenditures on prescription drugs are offset by reductions in other nondrug expenditures. We apply the proposed methodology to data from the Medical Expenditure Panel Survey, which have the following features: (i) the observed bivariate outcomes are a mixture of zeros and continuously measured positives; (ii) both the zero and positive outcomes show state dependence and inter-temporal interdependence; and (iii) the zeros and the positives display contemporaneous association. The point mass at zero is accommodated using a hurdle or a two-part approach.

The effect of managed care on use of health care services: results from two contemporaneous household surveys.

This paper estimates treatment effects of managed care plans on the utilization of health care services using data from two contemporaneous, nationally representative household surveys from the USA. The paper exploits recent advances in simulation-based econometrics to take the endogeneity of enrollment into managed care plans into account and identify the causal relationship between managed care enrollment and utilization. Overall, results from the two surveys are remarkably similar, lending credibility to their external validity and to the econometric model and estimation methods.