Insured but not Protected: The Impact of Medicine Availability on Household Spending

Abstract

This studyevaluatestheimpactofpublic-sectorreformaimedatimprovingtheavailabil- ityofessentialmedicinesinpublichealthcarefacilitiesinPeru.Themainobjectiveisto investigatewhetherapolicy-inducedincreaseinmedicineavailabilityledtoreductions in householdout-of-pocketspendingonmedicinesamongusersofthepublichealthcare system. Usingbothpanelandrepeatedcross-sectionaldatafromahouseholdsurvey and combiningitwithdistrict-levelmeasurementsofessentialmedicinesavailability,I estimate adifference-in-differencesmodelwithcontinuoustreatmentintensity.Theiden- tification strategyexploitstheexogenoustimingofthepolicyandcross-districtvariation in themagnitudeofavailabilityimprovements.Theresultsshowthatthereforminitially decreased theaveragemedicineavailabilityatthedistrictlevel,butitlaterincreasedit. As aresultofthesevariations,out-of-pocketexpendituresinthestudiedinsuredpopu- lation decreasedonaverageafterthereformbetween1.6and2.5percentagepointsfor eachpercentagepointincreaseinessentialmedicinesavailability.Posteriorheterogeneity analyses revealmoresubstantialeffectsamonghouseholdswithatleastonechroniccondi- tion. Thesefindingsunderscoretheimportanceofmedicineavailabilityasadeterminant of financialprotection,especiallyforpatientswithchronicdiseases.