February 2010

Backgound

User fees, extra charges, copayments and the like, resembling zombies which refuse to die, continually re-emerge as tools meant to curb unnecessary care, raise more revenue or, simply, make “consumers” more conscious of their health care transactions. Regardless of any worthiness of these objectives, the adverse consequences of cost-sharing mechanisms have long been known, but prompt an occasional reminder. This month’s e-Rounds examines recent research on copayments for the elderly in ambulatory care settings, taking into account both cost and health consequences.

Economic theory and empirical evidence demonstrate that patients will use fewer health services when they have to pay more for them. Increase the copayment and reduce the visits. The problem is, and for many reasons, patients may be indiscriminately deterred from both unnecessary care and necessary care. In some cases, delaying care may actually increase cost or worsen health outcomes. Delay in early interventions that might have been delivered in outpatient settings may, instead, result in more acute, and more costly inpatient care later on. To examine this issue, this study evaluated the effect of increasing copayments for ambulatory care on the use of acute care in hospitals, in a large nationally representative cohort of Medicare patients enrolled in managed-care plans.