Physician prescribing style and the economic cost of health shocks

with  Flavia Cavallini (Università della Svizzera italiana), Karin Heck (Nivel, Netherlands Institute for Health Services Research), Fabrizio Mazzonna (Università della Svizzera italiana)

Abstract:

We investigate the role of primary care physicians‘ prescribing style in the transmission of health shocks to the labor market. Using administrative data from the Netherlands (2009–2020), we exploit the Dutch gatekeeping system and geographic constraints on GP choice to identify the causal effect of prescribing style on post-hospitalization recovery. We characterize GP style by a composite index of prescribing propensity for benzodiazepines, opioids, antidepressants, and antibiotics. Comparing patients in practices above versus below the median of this distribution, we find that while hospitalization leads to persistent earnings losses for all, the ”economic penalty‘” is 70% steeper for those in high-prescribing practices. Six years post-hospitalization, these patients earn 750 euro less annually, a gap that widens to 1,500 euro for those under 45. We identify persistent, potentially addictive benzodiazepine use as the primary mechanism, finding no systematic differences in mortality or rehospitalization rates that might otherwise explain the observed labor market trajectories.