How Efforts to Lower Health Care Costs are Putting Patients and Providers on a Collision Course

Abstract

In an effort to address these causes of rising health care spending, policymakers, insurers, and employers have embraced two major strategies. The first strategy targets the demand-side of the equation. Specifically, patients are encouraged to become more price-sensitive consumers through the imposition of higher cost sharing. The second strategy targets the supply-side, offering financial rewards to physicians, hospitals, and other providers that successfully constrain health care costs while also improving the quality of care. Many third-party payors have simultaneously adopted both higher-cost sharing for patients and financial incentives for providers to lower costs and improve quality. The potential interplay between these two strategies, however, puts providers and patients on a collision course, as patients who delay or forego recommended care in response to higher cost-sharing burdens may undermine providers’ efforts to promote coordinated, high-value health care. This provider-patient conflict may be particularly acute as between providers and their lower income and sicker patients. In response, some providers may fire or refuse to treat sicker patients and those from lower socioeconomic groups who are enrolled in high-deductible cost plans.