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The effect of prescription drug coverage on mortality
Evidence from Medicaid implementation
Clayton, D. H. (2019). The effect of prescription drug coverage on mortality: Evidence from Medicaid implementation. Journal of Health Economics, 63, 100-113. https://doi.org/10.1016/j.jhealeco.2018.10.003
This paper estimates the effect of Medicaid prescription drug spending on mortality. I use the group- and state-specific roll out of Medicaid drug coverage to isolate plausibly exogenous variation in drug expenditures. I find that a $1 increase in Medicaid drug expenditures per resident reduces mortality from internal causes by 2.0 deaths per hundred thousand, a decline of 0.23%. I find relatively large effects for: (1) medically-treated diseases which pose an immediate risk of death, (2) impoverished areas which received a disproportionate share of state Medicaid dollars, and (3) areas with a high ratio of medical to surgical physicians.