Correspondence
Cost Sharing in Health Insurance
N Engl J Med 1995; 333:733-734September 14, 1995
- Article
To the Editor:
In her reexamination of cost sharing in health insurance (April 27 issue),1 Rasell offers a selective reading of the literature on the economics of health care and emphasizes the deleterious effects of cost sharing. In fact, cost sharing is an important mechanism of cost containment that can reduce costs with few adverse effects.
Rasell uses aggregated statistics on the utilization of services in the United States to conclude that cost sharing is ineffective. She states that “even with out-of-pocket spend-ing . . . at the current high level, health care expenditures in the United States are the highest in the world.” These comparisons are meaningless in the absence of a range of controls. The implication that further reductions in utilization cannot be achieved is directly contradicted by a whole body of research indicating the existence of unnecessary care,2 and the ability of cost sharing to eliminate it.3
Citing the RAND Health Insurance Experiment, Rasell states that “cost sharing has a negative effect on health outcomes, especially among people who are less healthy or of lower socioeconomic status.” This conclusion is overstated and inconsistent with important published accounts of the study.4 In fact, the RAND study showed only a few small differences in health status, of debatable clinical importance.3 Rasell also states that a strategy based on income-related cost sharing — a way of lessening the regressiveness of cost-sharing programs — “would substantially increase the administrative costs of health insurance.” There is no evidence to support this claim.
Rasell further maintains that costs in the United States are higher than those in Canada because of such factors as administrative costs, but the research on which she relies has been disputed.5 Her selective reading also ignores a whole body of work that concludes that the increased use of sophisticated medical services is the primary driver of health care costs.6
No one should argue that cost sharing is a panacea. But many health policy analysts in the United States and Canada (and virtually all health-benefit managers) have concluded that when used carefully, it can increase patients' responsibility and decrease costs without noticeable adverse effects.
6 ReferencesRobert J. Rubin, M.D.
Daniel N. Mendelson, M.P.P.
Lewin–Value Health Incorporated, Fairfax, VA 220311
Rasell ME . Cost sharing in health insurance -- a reexamination. N Engl J Med 1995;332:1164-1168
Full Text | Web of Science | Medline2
Bernstein SJ ,McGlynn EA ,Siu AL , et al. The appropriateness of hysterectomy: a comparison of care in seven health plans. JAMA 1993;269:2398-2402
CrossRef | Web of Science | Medline3
Congress, Office of Technology Assessment. Benefit design: patient cost sharing. Background paper. Washington, D.C.: Government Printing Office, 1993. (OTA-BP-H-112.)
4
Newhouse JP. Free for all? Lessons from the RAND Health Insurance Experiment. Cambridge, Mass.: Harvard University Press, 1993.
5
Sheils JF ,Young GJ ,Rubin RJ . O Canada: do we expect too much from its health system? Health Aff (Millwood) 1992;11:7-20
CrossRef | Web of Science | Medline6
Aaron HJ. Serious and unstable condition: financing America's health care. Washington, D.C.: Brookings Institution, 1991.
Author/Editor Response
Dr. Rasell replies:
To the Editor: Contrary to the statements by Rubin and Mendelson, the usual view — that cost sharing has only minimal effects on health — results from an incomplete reading of the literature. The often-cited benefits of access to care without cost sharing include reductions in diastolic blood pressure by 1.4 mm Hg for people with hypertension (and by 3.3 mm Hg for those who also have low incomes) and slightly improved visual acuity.1 These differences seem small. But a fuller examination of the literature, as set forth in my article, reveals additional effects of cost sharing, including a 10 percent increase in the risk of death for the least healthy quarter of the population and a 21 percent increase in serious symptoms — for example, chest pain with exercise or shortness of breath with light exercise or light work — among the 40 percent who have the poorest health and the lowest incomes. These effects on health have often been ignored; pointing them out does not constitute a selective reading of the literature.
It seems certain that increased cost sharing would lead to further reductions in the use of health care services by some of those affected. Such reductions cause the adverse outcomes I have cited. However, the question I posed in the article is whether widespread increases in cost sharing would reduce average utilization for the population as a whole (a question that cannot be answered from the RAND study) and consequently, whether total expenditures would decrease. These outcomes are uncertain; I presented the evidence for this uncertainty.
I agree that the increased use of sophisticated, high-intensity medical services is an important cause of increasing expenditures for health care. However, as I pointed out, the RAND study shows that cost sharing has no effect on intensity. Therefore, cost sharing cannot address what Rubin and Mendelson call the “primary driver” of health care costs.
1 ReferencesM. Edith Rasell, M.D.
Economic Policy Institute, Washington, DC 200361
Brook RH ,Ware JE Jr ,Rogers WH , et al. Does free care improve adults' health? Results from a randomized controlled trial. N Engl J Med 1983;309:1426-1434
Full Text | Web of Science | Medline
- Citing Articles (5)
Citing Articles
1
Dustin W. Ballard, Mary E. Reed, Huihui Wang, Laura Arroyo, Nancy Benedetti, John Hsu. (2008) Influence of Patient Costs and Requests on Emergency Physician Decisionmaking. Annals of Emergency Medicine 52:6, 643-650.e4
CrossRef2
Trivedi, Amal N., Rakowski, William, Ayanian, John Z., . (2008) Effect of Cost Sharing on Screening Mammography in Medicare Health Plans. New England Journal of Medicine 358:4, 375-383
Full Text3
John Hsu, Mary Price, Richard Brand, G. Thomas Ray, Bruce Fireman, Joseph P. Newhouse, Joseph V. Selby. (2006) Cost-Sharing for Emergency Care and Unfavorable Clinical Events: Findings from the Safety and Financial Ramifications of ED Copayments Study. Health Services Research 41:5, 1801-1820
CrossRef4
Hsu, John, Price, Mary, Huang, Jie, Brand, Richard, Fung, Vicki, Hui, Rita, Fireman, Bruce, Newhouse, Joseph P., Selby, Joseph V., . (2006) Unintended Consequences of Caps on Medicare Drug Benefits. New England Journal of Medicine 354:22, 2349-2359
Full Text5
John Hsu, Mary Reed, Richard Brand, Bruce Fireman, Joseph P. Newhouse, Joseph V. Selby. (2004) Cost-Sharing. Medical Care 42:3, 290-296
CrossRef
