Does Cost-Sharing for Rx Reduce Health?

Unknown, say Dana Goldman, Geoffrey Joyce, and Yuhui Zheng of the RAND Corporation. 

In this week’s Journal of the American Medical Association, the team presents a meta-analysis of “132 articles examining the associations between prescription drug plan cost-containment measures, including co-payments, tiering, or coinsurance[;] pharmacy benefit caps or monthly prescription limits[;] formulary restrictions[;] and reference pricing[;] and salient outcomes, including pharmacy utilization and spending, medical care utilization and spending, and health outcomes.”

Here are their principal findings and conclusions, from the abstract:

Increased cost sharing is associated with lower rates of drug treatment, worse adherence among existing users, and more frequent discontinuation of therapy. For each 10% increase in cost sharing, prescription drug spending decreases by 2% to 6%, depending on class of drug and condition of the patient. The reduction in use associated with a benefit cap, which limits either the coverage amount or the number of covered prescriptions, is consistent with other cost-sharing features. For some chronic conditions, higher cost sharing is associated with increased use of medical services, at least for patients with congestive heart failure, lipid disorders, diabetes, and schizophrenia. While low-income groups may be more sensitive to increased cost sharing, there is little evidence to support this contention.

That last sentence was certainly interesting. But here comes the kicker.

While increased cost sharing is highly correlated with reductions in pharmacy use, the long-term consequences of benefit changes on health are still uncertain.

That echoes points I’ve made previously in this blog:

  • The mere fact that cost-sharing causes people to reduce their consumption of prescription drugs (or other medical care) does not mean that their health suffers. 
  • Even if cost-sharing does cause some people’s health to suffer, that does not mean that the overall health effects of cost-sharing are harmful. 

Indeed, as Goldman et al. conclude that these studies leave open the question of long-term health effects, the best evidence on this point remains the RAND Health Insurance Experiment, which showed that the overall health effects of cost-sharing are nil.

But as Tom Firey has argued in this blog, even if it could be shown that cost-sharing does reduce overall health outcomes, that is not a public policy problem.  It means that people prefer to spend their money on things other than medical care.  That is their right.  We might try to persuade them to spend their money differently.  But we are not justified in taking their money away from them to spend it according to our preferences – or more likely, those of the health care industry – rather than their preferences.  Whose life is it, anyway?