RUHR. Drug Oversupply in Nursing Homes ECONOMIC PAPERS. An Empirical Evaluation of Administrative Data #475. Magdalena A. Stroka

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1 RUHR ECONOMIC PAPERS Magdalena A. Stroka Drug Oversupply in Nursing Homes An Empirical Evaluation of Administrative Data #475

2 Imprint Ruhr Economic Papers Published by Ruhr-Universität Bochum (RUB), Department of Economics Universitätsstr. 150, Bochum, Germany Technische Universität Dortmund, Department of Economic and Social Sciences Vogelpothsweg 87, Dortmund, Germany Universität Duisburg-Essen, Department of Economics Universitätsstr. 12, Essen, Germany Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) Hohenzollernstr. 1-3, Essen, Germany Editors Prof. Dr. Thomas K. Bauer RUB, Department of Economics, Empirical Economics Phone: +49 (0) 234/ , Prof. Dr. Wolfgang Leininger Technische Universität Dortmund, Department of Economic and Social Sciences Economics Microeconomics Phone: +49 (0) 231/ , Prof. Dr. Volker Clausen University of Duisburg-Essen, Department of Economics International Economics Phone: +49 (0) 201/ , Prof. Dr. Christoph M. Schmidt RWI, Phone: +49 (0) 201/ , Editorial Office Sabine Weiler RWI, Phone: +49 (0) 201/ , Ruhr Economic Papers #475 Responsible Editor: Thomas K. Bauer All rights reserved. Bochum, Dortmund, Duisburg, Essen, Germany, 2014 ISSN (online) ISBN The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors own opinions and do not necessarily reflect those of the editors.

3 Ruhr Economic Papers #475 Magdalena A. Stroka Drug Oversupply in Nursing Homes An Empirical Evaluation of Administrative Data

4 Bibliografische Informationen der Deutschen Nationalbibliothek Die Deutsche Bibliothek verzeichnet diese Publikation in der deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über: abrufbar. ISSN (online) ISBN

5 Magdalena A. Stroka 1 Drug Oversupply in Nursing Homes An Empirical Evaluation of Administrative Data Abstract A widely discussed shortcoming of long-term care in nursing homes for elderly is the inappropriate or suboptimal drug utilization, in particular the utilization of psychotropic drugs. This paper estimates the effect of institutionalization on the drug intake of frail elderly using administrative data from the largest sickness fund in Germany. Difference-in-differences propensity score matching techniques are used to compare drug prescriptions of frail elderly who entered a nursing home with those who remained in the out-patient care system. The findings suggest that nursing home inhabitants receive more doses of antipsychotics, antidepressants and analgesics. The potential oversupply goes along with estimated drug costs of about 87 million per year. JEL Classification: I10 Keywords: Medication errors; patient safety; expenditures; drug over- and undersupply; medical costs February RUB, RWI, WINEG - Scientific Institute of TK for Benefit and Efficiency in Health Care. - Helpful comments by Thomas Bauer, Hendrik Schmitz, and participants of the Annual Meeting of the dggö (Bayreuth) are gratefully acknowledged. I am grateful to my colleagues from the WINEG for the access to the data of the Techniker Krankenkasse and to the German Research Foundation (DFG) for the financial support. All correspondence to: Magdalena A. Stroka, RUB, Universitätsstr. 150, Bochum, Germany, Magdalena.Stroka@rub.de

6 1 IntroductionandLiteratureReview 1 4

7 2 5

8 6

9 2 EmpiricalStrategyandData 2.1 Matching 7

10 8

11 (1) 2.2 Data 9

12 2.2.1OutcomeVariables 2.2.2TreatmentandControlGroup 3 10

13 FigureIabouthere DescriptiveStatisticsandthePropensityScore 11

14 TableIabouthere. 2.3 MatchingAlgorithms

15 3 MatchingQuality FigureIIabouthere. TableIIabouthere 13

16 4 Results TableIIIabouthere. 14

17 TableIVabouthere. 15

18 TableVabouthere. 5 Discussion 16

19 17

20 Figures Beforetreatment Treatmentandcontrol group Treatment Treatmentgroup: Controlgroup: Aftertreatment Treatmentgroup: Controlgroup: FigureI: Propensity Score Untreated Treated: Off support Treated: On support FigureII: 18

21 Tables TableI Means Difference PropensityScore Logit Variable Individualcharacteristics Pretreatmentcaredependency Pretreatmenthealthstatus Pretreatmentmedication[DDDsperyear] Notes: 19

22 TableII: Variable Idividualcharacteristics Pretreatmentcaredependency Pretreatmenthealthstatus Pretreatmentmedication Notes: 20

23 TableIII: Variable Means ATT Notes: 21

24 TableIV: Variable PCriticalat: Notes: 22

25 TableV: Effects Variable Notes: 23

26 References InternationalJournalofGeriatricPsychiatry21 TheNewEnglandJournalofMedicine327 HumanPsychopharmacology: ClinicalandExperimental26 QualityandSafetyinHealthCare18 StataJournal2 AnnalsofInternalMedicine117 Theuseofpropensityscorematchinginthe evaluationofactivelabourmarketpolicies. BritishMedicalJournal326 JAMA:TheJournaloftheAmericanMedicalAssociation293 JournalofHealthEconomics18 JournalofHealthEconomics32 ZeitschriftfürGerontologieundGeriatrie37 24

27 TheReviewofEconomicStudies65 TheReviewof EconomicStudies64 DeutschesÄrzteblatt107 Drugs&Aging22 JournalofHealthEconomics27 BMCGeriatrics9 HealthEconomics19 The Gerontologist43 TheNewEnglandJournalofMedicine346 Pharmacoepidemiology anddrugsafety12 Biometrika70 TheAmerican Statistician39 ObservationalStudies. GEKPflegereport2008: Schwerpunktthema:MedizinischeVersorgunginPflegeheimen. JournalofEducationalPsychology66 25

28 EuropeanJournalof ClinicalPharmacology57 JournalofHealthEconomics20 SchweizerischeZeitschriftfürVolkswirtschaftundStatistik136 JournalofEconometrics125 Pflegestatistik2009:PflegeimRahmender Pflegeversicherung;Deutschlandergebnisse. Journalof HealthEconomics31 26