U.S. health insurance plans are increasingly adopting benefit designs that shift more of the financial burden to patients through out-of-pocket (OOP) costs (e.g., higher deductibles, copays, and coinsurance).
In 2021, 85% of covered employees had a deductible with their health plan, up from 74% a decade ago, and the average deductible increased 68% over the past 10 years, according to the Kaiser Family Foundation. In addition, increases in OOP costs are rising faster than wage increases and inflation, with OOP costs now accounting for 10% or more of the annual income for many households.
The goal of patient cost-sharing is to reduce the use of unnecessary, low-value health care goods and services and ultimately decrease health care costs. However, research from the National Pharmaceutical Council (NPC) and Xcenda, published in the Journal of Managed Care and Specialty Pharmacy, suggests that high cost-sharing for prescription medications may have negative effects on patient health while not actually decreasing overall health care costs.
“High patient cost-sharing reduces the appropriate use of effective medicines — not just low-value care as intended — while failing to achieve the goal of curbing overall health care spending,” said Brian Sils, NPC research manager and an author on the paper.
The researchers conducted a systematic literature review examining the available evidence regarding increased patient cost-sharing for prescription medications and four outcomes: medication adherence, health care resource utilization, clinical outcomes, and health care costs.
Negative Impact on Medication Adherence
Researchers found that increased patient cost-sharing was associated with worse medication adherence (84% of studies), persistence (79%), and discontinuation of medicine use (58%). Medication adherence is “the extent to which a patient acts in accordance with the prescribed interval and dose of a dosing regimen,” while medication persistence is “the duration of time from initiation to discontinuation of therapy.” In addition, six of nine (67%) studies found that increased cost-sharing was associated with decreased medication initiation.
The research also showed that the greater the magnitude of patient cost-sharing, the worse the adherence outcomes regardless of the condition, patient population or type of cost-sharing. This evidence indicates that patients fail to start and continue needed medicines because of cost burden.
Increased Hospital Care, Decreased Outpatient Care
Some evidence showed higher patient cost-sharing for medications was associated with increased hospitalizations and decreased use of outpatient services. Four of six studies showed a significant increase in inpatient hospital utilization associated with higher cost-sharing, while two of three studies showed a significant decrease in outpatient utilization associated with higher cost-sharing. No significant association between increased cost-sharing and emergency department utilization was observed.
This evidence supports the hypothesis that increased patient cost-sharing negatively impacts outpatient care, which may in turn result in increased hospitalizations and more significant health care costs in the long term.
Need for More Research on Impact on Patient Health
Only four studies looked at clinical outcomes, and three of those did not report a statistically significant association between higher cost-sharing and worse clinical outcomes. More research needs to be done to explore the impact of cost-sharing and clinical outcomes to elucidate the impact on patient health.
Failure to Reduce Overall Health Spending
Finally, increased patient cost-sharing for medications did not appear to decrease overall health care spending (both pharmacy and medical spending by payers and patients). In most studies, increased cost-sharing had a neutral impact, neither increasing nor decreasing health care costs.
Building Better Health Benefits for Patients
The researchers concluded that when health care decision-makers design insurance benefits, they should consider a holistic view of patient cost-sharing that includes its impact on patient, clinical, and economic outcomes.
“Health benefit designs that focus only on containing immediate costs for drugs without regard to patient needs and outcomes create barriers to high-value health care, leading to long-term consequences for both patients and the health care system,” Sils said.
Read more about NPC’s research on building better benefits.