Awards

Victor R. Fuchs Research Award

RAND Announces Winner of Health Economics Prize

RAND and Forum for Health Economics and Policy are pleased to announce the winners of the first annual Victor R. Fuchs Research Award. This $10,000 prize, sponsored by RAND, is awarded to the authors of the best paper with the potential to spawn new research in an underdeveloped area of health economics or health policy.

The winning paper has been published in Forum for Health Economics & Policy.

The paper examined the effects of increased drug copayments on drug spending and on spending for other medical care. The study used data on individual health insurance claims and benefit data from 1997-2003 to study the effects of changing consumers’ co-payments for prescription drugs on the quantity demanded and expenditure on prescription drugs, inpatient care and outpatient care. Results showed that increases in drug copayments reduce both the use of and spending on prescription drugs. However, consumers substitute the use of other medical care for some prescription drug use–about 35% of the expenditure reductions on prescription drugs are offset by the increases in other medical spending.

“This paper is the first to demonstrate the benefits of generous drug coverage in a stable, employed population,” noted Dana Goldman, Director of Health Economics at RAND and one of the editors of Forum for Health Economics and Policy. “It confirms what we all expected but could not demonstrate—that encouraging people to take their medicine prevents long-term complications, and ultimately can save a substantial amount of money.”