Map of life expectancy at birth from Global Education Project.

Thursday, January 28, 2010

And one more thing . . .

before I get to the NIH proposal. In my recent series on Health Care Policy 101 I expended quite a few bytes explaining why making people pay more of the cost of health care out of pocket does not result in containing health care costs, or wiser allocation, or consumer sovereignty, or any of that free market conservative libertarian jive.

So here it is, actual data, the real world, truth -- as opposed to ideology. Amal Travadi and colleagues report on an experiment: almost 900,000 Medicare beneficiaries constitute the study population. Some were enrolled in plans that increased copays for outpatient care -- on average they nearly doubled, from $7.38 for a primary care visit to $14.38; and from $12.66 to $22.05 for primary specialty care visits. Others were enrolled in plans that did not change co-pays. And yes, the people whose co-pays were increased did indeed reduce their use of outpatient services. But something else also happened:

In the year after the rise in copayments, plans that increased cost sharing had 19.8 fewer annual outpatient visits per 100 enrollees (95% confidence interval [CI], 16.6 to 23.1), 2.2 additional annual hospital admissions per 100 enrollees (95% CI, 1.8 to 2.6), 13.4 more annual inpatient days per 100 enrollees (95% CI, 10.2 to 16.6), and an increase of 0.7 percentage points in the proportion of enrollees who were hospitalized (95% CI, 0.51 to 0.95), as compared with concurrent trends in control plans. These estimates were consistent among a cohort of continuously enrolled beneficiaries. The effects of increases in copayments for ambulatory care were magnified among enrollees living in areas of lower income and education and among enrollees who had hypertension, diabetes, or a history of myocardial infarction.

Conclusions Raising cost sharing for ambulatory care among elderly patients may have adverse health consequences and may increase total spending on health care.

Get it? It's just like I said: increasing out of pocket costs does cause people to use less of the relatively inexpensive primary and wellness care services, but then they end up really sick and it costs more in the end. D'oh.


C. Corax said...

Thank you for posting this. I've got the pdf and know some folks who will be interested in it.

kathy a. said...

this confirms what people know from their real lives. people without a lot of resources will pinch pennies, because they have to. our relatives who grew up during the great depression and/or WWII may have deeply ingrained habits of avoiding extra costs, even if they will not starve if they go to see the doctor.

and, i'm pretty sure we all can think of "a stitch in time saves nine" in the context of health care -- people who put off that doctor visit and ended up really sick. elders are more vulnerable than reasonably healthy people of younger ages, so the effects may be more drastic [and expensive] for them as a group.

Cervantes said...

That's right Kathy, this effect is most pronounced among people who are older, or less healthy to begin with, based on earlier studies. Younger and healthier people can usually get away with skipping the annual checkup -- but raising the out of pocket cost to get them to do that isn't going to reduce health care spending significantly. The whole argument is nonsense.