Mandatory universal drug plan, access to health care and health: Evidence from Canada

Abstract

This paper examines the impacts of a mandatory, universal prescription drug insurance program on health care utilization and health outcomes in a public health care system with free physician and hospital services. Using the Canadian National Population Health Survey from 1994 to 2003 and implementing a difference-in-differences estimation strategy, we find that the mandatory program substantially increased drug coverage among the general population. The program also increased medication use and general practitioner visits but had little effect on specialist visits and hospitalization. Findings from quantile regressions suggest that there was a large improvement in the health status of less healthy individuals. Further analysis by pre-policy drug insurance status and the presence of chronic conditions reveals a marked increase in the probability of taking medication and visiting a general practitioner among the previously uninsured and those with a chronic condition.

Keywords: Drug utilization; Health care utilization; Health status; Physician visits; Universal drug insurance.