CAN PHYSICIANS AFFECT PATIENT ADHERENCE WITH MEDICATION? SERGEI KOULAYEV a , EMILIA SIMEONOVA b and NIELS SKIPPER c, * a Consumer Financial Protection Bureau, Washington, D.C., USA b The Johns Hopkins Carey Business School, Baltimore, MD, USA c Department of Economics and Business Economics, Aarhus University, Aarhus V, Denmark ABSTRACT Non-compliance with medication therapy remains an unsolved and expensive problem for healthcare systems around the world, yet we know little about the factors that affect a patient’s decision to follow treatment recommendations. In particular, there is little evidence on the extent to which doctors can influence patient adherence behavior. This study uses a unique panel dataset comprising all prescription drug users, physicians, and all prescription drug sales in Denmark over 7 years to analyze the contributions of doctor-specific, patient-specific, and drug-specific factors to the adherence decision. We find that physicians exert substantial influence on patient compliance. Further, the quality of the match between a doctor and a patient accounts for a substantial portion of the variation in adherence outcomes. This suggests that the sorting of patients across doctors is an important mechanism that affects patient adherence beyond the effects of individual patient-specific and physician-specific factors. Copyright © 2016 John Wiley & Sons, Ltd. Received 06 January 2015; Revised 08 February 2016; Accepted 05 April 2016 KEY WORDS: medication adherence; prescription drugs; physician behavior 1. INTRODUCTION The important role of medication non-adherence in preventable morbidity and mortality has been demonstrated in numerous studies and across many conditions (Krueger et al., 2005). Non-adherent patients with heart failure are more than twice as likely to have been admitted to a hospital and to die from heart failure (Miura et al., 2001). Similarly, striking differences in health outcomes have been reported across adherence levels with beta blockers, asthma medication, and anti-psychotics (Krueger et al., 2005). Non-adherence imposes significant monetary costs on the healthcare system. 1 Studies have found that between one-thirds and two-thirds of medication-related hospital admissions in the USA are due to poor medication adherence, with a cost of around $100bn per year (Osterberg and Blaschke, 2005). Rates of patient compliance with therapy are becoming part of the standard package of quality measures introduced in recent outcomes-based provider compensation schemes by Medicare and other large insurers, 2 but *Correspondence to: Aarhus University, Department of Economics and Business Economics, Fuglesangs Allé 4, 8210 Aarhus V. Denmark. E-mail: nskipper@econ.au.dk 1 As a large contributor to healthcare costs, the problem of non-adherence has received significant attention in the recent debate surrounding healthcare reform. Articles in popular media have presented anecdotal evidence and proposed solutions to the problem. In discussing healthcare reform for the New York Times, Sandeep Jauhar wrote that ‘Patient noncompliance with medical recommendations undoubt- edly contributes to poor health, but it is as much a function of poor communication, medication costs and side effects, cultural barriers and inadequate resources as it is of willful disregard of a doctor’s advice.’ 2 As indicated in ‘Medicare 2014 Part C & D Star Rating Technical Notes’, available at http://www.cms.gov/Medicare/Prescription-Drug- Coverage/PrescriptionDrugCovGenIn/PerformanceData.html Copyright © 2016 John Wiley & Sons, Ltd. HEALTH ECONOMICS Health Econ. (2016) Published online in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/hec.3357