How do high cost-sharing policies for physician care affect total care costs among people with chronic disease?

OBJECTIVE

This study examines whether high cost-sharing in physician care is associated with a differential impact on total care costs by health status. Total care includes physician care, emergency room (ER) visits and inpatient care.

BACKGROUND

Since high cost-sharing policies can reduce needed care as well as unneeded care use, it raises the concern whether these policies are a good strategy for controlling costs among chronically ill patients.

METHODS

This study used the 2007 Medical Expenditure Panel Survey data with a cross-sectional study design. Difference in difference (DID), instrumental variable technique, two-part model, and bootstrap technique were employed to analyze cost data.

RESULTS

Chronically ill individuals' probability of reducing any overall care costs was significantly less than healthier individuals (beta = 2.18, p = 0.04), while the integrated DID estimator from split results indicated that going from low cost-sharing to high cost-sharing significantly reduced costs by $12,853.23 more for sick people than for healthy people (95% CI: -$17,582.86, -$8,123.60).

CONCLUSIONS

This greater cost reduction in total care among sick people likely resulted from greater cost reduction in physician care, and may have come at the expense of jeopardizing health outcomes by depriving patients of needed care. Thus, these policies would be inappropriate in the short run, and unlikely in the long run to control health plans costs among chronically ill individuals. A generous benefit design with low cost-sharing policies in physician care or primary care is recommended for both health plans and chronically ill individuals, to save costs and protect these enrollees' health status.