Prescription Drug Insurance and Demand for Physician Services: Evidence from Ontario and New Brunswick

Abstract

This paper examines the marginal impact of supplemental prescription drug cover- age on demand for physician services within a publicly funded health care system. The data comes from three cycles of the Canadian Community Health Survey for Ontario and New Brunswick. The probability of at least one consultation per year is estimated using a probit model. Then users of health care services are divided into high and low frequency latent classes, and the number of consultations per year is estimated using a negative binomial model. This paper is the first to consider the impact by type of insurance (government-provided, employer-provided, or privately purchased) separately for family doctors and specialists for both individuals under 65 and seniors. These results confi rm that having supplemental insurance increases the likelihood of a visit to both a family doctor and a specialist. This paper also finds that the number of consultations with family doctors and specialists are sensitive to the type of insurance, not only the presence of insurance. In general, the greatest impacts can be seen from specialist visits and among low frequency latent class users.