Gaining Prescription Drug Insurance Reduced Inpatient Medicare Payments Interview with:
Prof. Robert Kaestner

University of Illinois at Chicago – Institute of Government and Public Affairs
Chicago, IL 60607 and
National Bureau of Economic Research
365 Fifth Avenue, 5th Floor
New York, NY 10016-4309 What are the main findings of the study?

Prof. Kaestner:  Gaining prescription drug insurance through Medicare Part D was associated with a 8% reduction in the probability of a hospital admission, a 7% reduction in Medicare payments for inpatient services per person (who obtained insurance), and a 12% reduction in hospital resource use per person. What should clinicians and patients take away from your report?

Prof. Kaestner:  Prescription drugs are, on average, a substitute for inpatient care.
The greater use of prescription drugs that comes with insurance prevents hospitalizations.  What recommendations do you have for future research as a result of this study?

Prof. Kaestner:  Future research should try to identify the specific biological and clinical mechanisms underlying the finding that prescription drug use decreased hospitalization.

Kaestner, Robert and Long, Cuiping and Alexander, G. Caleb, Effects of Prescription Drug Insurance on Hospitalization and Mortality: Evidence from Medicare Part D (February 2014). NBER Working Paper No. w19948. Available at SSRN: