Hostname: page-component-cd9895bd7-8ctnn Total loading time: 0 Render date: 2024-12-26T08:26:21.520Z Has data issue: false hasContentIssue false
  • English
  • Français

Cost-Sharing under Consumer-Driven Health Care Will Not Reform U.S. Health Care

Published online by Cambridge University Press:  01 January 2021

John P. Geyman
Get access Rights & Permissions [Opens in a new window]

Extract

Various kinds of consumer-driven reforms have been attempted over the last 20 years in an effort to rein in soaring costs of health care in the United States. Most are based on a theory of moral hazard, which holds that patients will over-utilize health care services unless they pay enough for them. Although this theory is a basic premise of conventional health insurance, it has been discredited by actual experience over the years. While ineffective in containing costs, increased cost-sharing as a key element of consumer-driven health care (CDHC) leads to restricted access to care, underuse of necessary care, lower quality and worse outcomes of care. This paper summarizes the three major problems of U.S. health care urgently requiring reform and shows how cost-sharing fails to meet that goal.

Type
Symposium
Information
Journal of Law, Medicine & Ethics , Volume 40 , Issue 3 , Fall 2012 , pp. 574 - 581
Copyright
Copyright © American Society of Law, Medicine and Ethics 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Pauly, M. V., “The Economics of Moral Hazard: Comment.” American Economic Review 58 (1968): 3.Google Scholar
Brook, R. H. Ware, J. E. Rogers, W. R. Keeler, E. B. Davies, A. R. et al. , “Does Free Care Improve Adults' Health? Results from a Randomized Controlled Trial,” New England Journal of Medicine 309, no. 23 (1983): 1426–1434.CrossRefGoogle Scholar
Pauly, M. V., “More on Moral Hazard,” Journal of Health Economics 2, no. 1 (1983): 83.CrossRefGoogle Scholar
Newhouse, J. P., “Consumer-Directed Health Plans and the RAND Health Insurance Experiment,” Health Affairs (Milwood) 23, no. 6 (1993): 107–113.CrossRefGoogle Scholar
Bloom, B. S. Jacobs, J., “Cost Effects of Restricting Cost Effective Therapy,” Medical Care 23, no. 7 (1985): 872–879; Soumerai, S. B. Ross-Degnan, A. D. Gortmaker, S., “Payment Restrictions for Prescription Drugs under Medicaid: Effects on Therapy, Cost and Equity,” New England Journal of Medicine 317, no. 9 (1987): 550–556; Soumerai, S. B. Ross-Degnan, A. D. Avorn, J. McLaughlin, T. J. Choodnovskly, J. “Effects of Medicaid Drug-Payment Limits on Admission to Hospitals and Nursing Homes,” New England Journal of Medicine 325, no. 15 (2004): 1072–1077.CrossRefGoogle Scholar
Goldman, D. P. Joyce, G. I. Escarce, J. J., “Pharmacy Benefits and the Use of Drugs by the Chronically Ill,” JAMA 291, no. 19 (2004): 2344–2350.CrossRefGoogle Scholar
Nyman, J., The Theory of Demand for Health Insurance (Stanford, CA: Stanford University Press, 2003).Google Scholar
Robinson, J. C., “Consolidation and the Transformation of Competition in Health Insurance,” Health Affairs (Millwood) 23, no. 6 (2004): 11–24.CrossRefGoogle Scholar
Goldman, D. P. Joyce, G. F. Zheng, Y., “Prescription Drug Cost-Sharing: Associations with Medication and Medical Utilization and Spending and Health,” JAMA 298, no. 1 (2007): 61–88.CrossRefGoogle Scholar
Artiga, S. O'Malley, M., “Increasing Premiums and Cost-Sharing in Medicaid and SCHIP: Recent State Experiences,” Issue Paper, Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, May 2005, at 2.Google Scholar
Geyman, J. P., “Moral Hazard and Consumer-Driven Health Care: A Fundamentally Flawed Concept,” International Journal of Health Services 37, no. 2 (2007): 333–351.CrossRefGoogle Scholar
Goodell, S. Swartz, K., “Cost-Sharing: Effects on Spending and Outcomes,” The Synthesis Project, Policy Brief No. 20, Robert Wood Johnson Foundation (December 2010).Google Scholar
Lusardi, A. Schneider, D. J. Tufano, P., The Economic Crisis and Medical Care Usage, National Bureau of Economic Research, Working Paper 15843 (March 2010).CrossRefGoogle Scholar
Robinson, J. C., “Consumer-Directed Health Insurance: The Next Generation. An Interview with John Rowe,” Health Affairs Web Exclusive W5 (December 13, 2005): 583–950, at 586.CrossRefGoogle Scholar
McQueen, M. P., “The Shifting Calculus of Workplace Benefits,” Wall Street Journal, January 16, 2007.Google Scholar
Terhune, C., “Thin Cushion: Fast-Growing Health Plan Has a Catch, $1,000-a-Year Cap,” Wall Street Journal, May 14, 2003, at A1.Google Scholar
Fuhrmans, V., “More Employers Try Limited Benefit Plans,” Wall Street Journal, January 17, 2006.Google Scholar
Munoz, R., “Parity or Parody: How Health Care Insurers Avoid Treating Mental Illness,” San Diego Union-Tribune, May 22, 2006.Google Scholar
Kolata, G., “Co-Payments Go Way Up for Drugs with High Costs. Insurers Shift Burden,” New York Times, April 14, 2008.Google Scholar
Martinez, B., “Cash before Chemo: Hospitals Get Tough,” Wall Street Journal, April 28, 2008.Google Scholar
Woolhandler, S. Himmelstein, D. U., “Consumer-Directed Health Care: Except for the Healthy and Wealthy, It's Unwise,” Journal of General Internal Medicine 22, no. 6 (2007): 879–881.CrossRefGoogle Scholar
Becker, C., “One Question: Credit or Debt? As Health Savings Accounts Gain in Popularity, Insurers and the Financial Services Industry Want to Bank the Cash,” Modern Healthcare 36, no. 3 (2006): 6–16.Google Scholar
Fisher, E. S. Welch, H. G., “Avoiding the Unintended Consequences of Growth in Medical Care: How Might More Be Worse?” JAMA 281, no. 5 (1999): 446–553; Parchman, M. Culter, S. “Primary Care Physicians and Avoidable Hospitalization,” Journal of Family Practice 39, no. 2 (1994): 123–126.CrossRefGoogle Scholar
Himmelstein, D. U. Thorne, D. Warren, E. Woolhandler, S., “Medical Bankruptcy in the United States, 2007: Results of a National Study,” American Journal of Medicine 122, no. 8 (2009): 741–746.CrossRefGoogle Scholar
Hsia, R. Y. Kellermann, A. L. Shen, Y. C., “Factors Associated with Closures of Emergency Departments in the United States,” JAMA 305, no. 19 (2011): 1978–1985.CrossRefGoogle Scholar
Weaver, K. E. Roland, J. H. Bellizzi, K. M. Ariz, M. M., “Foregoing Medical Care Because of Cost: Assessing Disparities in Healthcare Access among Cancer Survivors Living in the United States,” Cancer Online, June 14, 2010.CrossRefGoogle Scholar
Kaiser Family Foundation, Health Care Costs. Health Care Spending in the United States and Selected OECD Countries, April 2011.Google Scholar
Blitzer, D. M., “U.S. Healthcare Costs Continue to Rise, but at Declining Rates According to S&P Healthcare Economic Indices,” S&P Indices (May 19, 2011).Google Scholar
Enthoven, A. C., “The History and Principles of Managed Competition,” Health Affairs (Millwood) 12, Supp. (1993): 24–48; Thorpe, K. E., “Health Care Cost Containment: Reflections and Future Directions,” in Kovner, A. R. Jones, S., eds., Health Care Delivery in the United States (New York: Springer Publishing Company, 1999): 439–473.CrossRefGoogle Scholar
Center for Studying Health System Change, Preferred Provider Organizations and Medicare: No Panacea for Cost, Quality Issues, Press Release, Washington, D.C., April 29, 2004.Google Scholar
Abelson, R., “Nurses' Association Says in Study that Big Hospital Chain Overcharges Patients for Drugs,” New York Times, November 24, 2002.Google Scholar
Carreyrou, J., “Nonprofit Hospitals Flex Pricing Power,” Wall Street Journal, August 28, 2008.Google Scholar
McNeil, D., “Do Consumer-Directed Health Benefits Favor the Young and Healthy?” Health Affairs (Millwood) 23 (2004): 186–196.CrossRefGoogle Scholar
Fronstin, P., “Outlook on Consumerism in Health Care,” Employee Benefit Research Institute (EBRI) (2008): 9.Google Scholar
Kullgren, J. T. Galbraith, A. A. Hinrichsen, V. L. Miroshnik, I. Penfold, R. B. et al. , “Health Care Use and Decision Making among Lower-Income Families in High-Deductible Health Plans,” Archives of Internal Medicine 170 (2010): 1918–1925.CrossRefGoogle Scholar
Johnson, A. Rockoff, J. D. Mathews, A. W., “Americans Cut Back on Visits to Doctor,” Wall Street Journal, July 29, 2010.Google Scholar
Trivedi, A. N. Moloo, H. Mor, V., “Increased Ambulatory Care Copayments and Hospitalizations among the Elderly,” New England Journal of Medicine 362, no. 4 (2010): 320–328.CrossRefGoogle Scholar
The Commonwealth Fund Commission on a High Performance Health System, Why Not the Best? Results from the National Scorecard on U.S. Health System Performance, Vol. 97, July 17, 2008.Google Scholar