Increased cost sharing may hurt seniors' health care

Jan 28 2010

Cost sharing and increased co-pays, even if it's just a few dollars, can lead seniors to put off visits to the doctor and result in increased hospital admissions and longer hospital stays, according to a new study.

The Associated Press/The Washington Post: "With health care costs skyrocketing, many public and private insurers have required patients to pay more out-of-pocket when they seek care. The new study confirms what many policymakers had feared: cost-shifting moves can backfire." The study, published in the New England Journal of Medicine, looked at 900,000 seniors in 36 Medicare managed-care plans, half of which raised co-pays for visits to doctors. "For every 100 people enrolled in plans that raised copays, there were 20 fewer doctor visits, 2 additional hospital admissions and 13 more days spent in the hospital in the year after the increase compared to those in plans whose copays did not change, researchers found" (Chang, 1/27).

Reuters reports, the study's finding "questions the wisdom of raising co-payments to save money, at least among the elderly. [Increasing cost sharing] might be a way to cut health care costs among younger people, but not for people age 65 and older, Dr. Amal Trivedi of Brown University, who led the study, said in a telephone interview. ... Enrollees in plans whose co-pays for a trip to a specialist nearly doubled to $22 had a hospitalization rate that was 8.7 percent higher than among people whose copayments remained unchanged, averaging $11.38" (Emery, 1/27).

The Boston Globe: "Dating back to the 1970s, there has been a general consensus that asking patients to pay more for their doctors' visits will cut down on costs without harming health. But the influential Rand study that was the foundation for this assumption did not include elderly patients, Trivedi and his co-authors point out" (Cooney, 1/27).

BusinessWeek/Health Day News: "The new findings are consistent with research on cost-sharing for prescription drugs, which shows that failing to consider the value of the medication or a person's medical and economic status can harm health, the research team noted. ... The authors estimate that a Medicare plan might save $7,150 per 100 enrollees in the short-term by boosting outpatient co-payments, but inpatient spending would swell by $24,000 per 100 enrollees in the year after the co-payment increase" (Pallarito, 1/27).

The Wall Street Journal: "The implication is that people avoided the doctor's office to save money, then ended up in the hospital when their problems weren't detected or treated in their early stages. ... Advocates of so-called value-based benefits design point to them as evidence for why insurers and employers should try to align patients' financial incentives with the care they most need, particularly preventive treatment for chronic conditions. But it cuts against the general trend toward larger out-of-pocket charges for consumers, particularly in employer-provided plans" (Mathews, 1/27).