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.
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