Drug compliance, co-payment and health outcomes: evidence from a panel of Italian patients.

This paper studies the relationship between medical compliance and health outcomes - hospitalization and mortality rates - using a large panel of patients residing in a local health authority in Italy. These data allow us to follow individual patients through all their accesses to public health care services until they either die or leave the local health authority. We adopt a disease specific approach, concentrating on hypertensive patients treated with ACE-inhibitors. Our results show that medical compliance has a clear effect on both hospitalization and mortality rates: health outcomes clearly improve when patients become more compliant to drug therapy. At the same time, we are able to infer valuable information on the role that drug co-payment can have on compliance, and as a consequence on health outcomes, by exploiting the presence of two natural experiments during the period of analysis. Our results show that drug co-payment has a strong effect on compliance, and that this effect is immediate. Copyright 2006 John Wiley & Sons, Ltd.