This research provides an economic and policy analysis of the variation in psycho-stimulant use for Attention Deficit Hyperactivity Disorder (ADHD). ADHD is the most commonly diagnosed behavioral disorder in children. According to a 2002 Centers for Disease Control (CDC) report, roughly 3.5 percent of school-age children in the U.S. have an ADHD diagnosis, and over half of those diagnosed with ADHD take psycho-stimulant medication regularly. Use of these drugs varies considerably, up to three-fold across states and ten-fold within states. The main goal of this project is to understand the economic and policy sources of these dramatic variations. Using aggregate data and different definitions of local markets, we examine the sources of variation in the consumption rates across the continental U.S. The market models are used to test hypotheses regarding the effects of economic, demographic (e.g. age, sex, race, ethnicity), state regulatory, school policy, health system, and other educational variables on the supply and demand for psycho-stimulants. Examples of policy variables of interest include state level regulations on substitution and refilling of prescription drugs, Schedule II drug monitoring programs, as well as school accountability laws. We then repeat the analysis using more detailed data on consumption rates in California. This sub-analysis explains the variation within gender and age groups and the impact of differences in educational policies at the school district level. Next, we study the sources of variation in individual-level cost and utilization patterns using longitudinal data from Kaiser-Permanente Northern California. We use the Kaiser data to examine the effects of personal characteristics (age, gender, race/ethnicity, birth weight, mother's age at birth), and local area characteristics (economic, demographic, medical and insurance market and school district education policies) on costs of treating children with ADHD diagnoses. Additionally we use the Kaiser data to examine the effects of these variables on """"""""spells"""""""" of psycho-stimulant use, including effects on the initiation, discontinuation, and restarting of psycho-stimulant drugs. In this study we will sort through the economic and policy factors influencing the large variation in psycho-stimulant use across the U.S. By furthering the understanding of this variation, the results will inform policymakers, health professionals, educators, and families with school-age children.
