Cost-Sharing: A Blunt Instrument

Abstract

Cost-sharing is a health care cost-containment technique in which health care services are partially paid for by patients out of pocket. Cost-sharing can reduce non-cost-effective care, but it can also undermine the financial protection and access values of health insurance. We review the empirical evidence published since the mid-1980s about cost-sharing's effect on utilization, expenditures, health, and adverse consequences, including how the effects vary by form of care, by health status, and by sociodemographic characteristics. Some cost-sharing, such as emergency department copayments, reduces utilization without any harmful effects, whereas other cost-sharing reduces valuable care such as maintenance drug use among the chronically ill. Cost-sharing should be used judiciously, with attention taken not to reduce highly cost-effective care.

Keywords: cost-containment, health insurance, cost-effective car, access, consumer-driven health plans