American Risk and Insurance Association — Founded in 1932

2020 Robert C. Witt Award

portrait of Robert Kaestner
Robert Kaestner
portrait of Cuiping Schiman
Cuiping Schiman
portrait of G. Caleb Alexander
G. Caleb Alexander

The recipients of the 2020 Witt Award were Robert Kaestner, Cuiping Schiman, and G. Caleb Alexander for “Effects of Prescription Drug Coverage on Hospitalization and Mortality: Evidence from Medicare Part D,” September 2019, Volume 86, Issue 3, pages 561-826.

Abstract

We used Medicare administrative data (2002–2009) and an instrumental variables design that exploits the natural experiment created by the implementation of Medicare Part D to estimate the effect of prescription drug coverage insurance on the use and costs of inpatient services. We find that gaining prescription drug insurance through Part D caused approximately a 4 percent decrease in hospital admission rate, a 2–5 percent decrease in Medicare inpatient payments per person, and a 10–15 percent decrease in inpatient charges. Among specific types of admissions, gaining insurance was associated with significant decreases in admissions for CHF and COPD.