Having Skin In The Game Almost Never Works In Health Care

“Skin In The Game” in health care spending really means the misguided hope of wise consumer spending using thousands of dollars they don’t have. But on the other hand having no “Skin In The Game” ends with the same results. In the later case Fat Albert would be wearing some outstanding duds courtesy of other people’s money.

Medicare Study: More evidence health care cost-sharing doesn’t work

MyHealthGuide Source: Sam BakerAxios, 2/9/2021

A growing body of research keeps undermining a key tenet of health economics — the belief that requiring patients to pay more out of their own pockets will make them smarter consumers, forcing the health care system to deliver value.

Driving the news: Even a seemingly modest increase in out-of-pocket costs will cause many patients to stop taking drugs they need, according to a new working paper from Harvard economist Amitabh Chandra.

Raising Medicare recipients’ out-of-pocket costs by just $10 per prescription led to a 23% drop in overall drug consumption, and to a 33% increase in mortality.

And seniors were not simply ditching “low-value” drugs. People at high risk for heart attacks or strokes cut back on statins and blood-pressure medications even more than lower-risk patients.

Between the lines: This research focuses on Medicare’s drug benefit, but higher cost-sharing is all the rage throughout the system, and there’s little evidence that it has generated “smarter shoppers.”

Patients with high-deductible plans — increasingly common in the employer market — don’t shop around for the best deal, which is all but impossible to do in many cases even if you wanted to try.

Footnotes & References

  1. Publication 969 (2019), Health Savings Accounts and Other Tax-Favored Health Plans. Internal Revenue Service. February 18, 2020. Accessed October 2, 2020.https://www.irs.gov/publications/p969
  2. Employer health benefits: 2019 annual survey. Kaiser Family Foundation. September 25, 2019. Accessed September 29, 2020.http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2019
  3. Agarwal R, Mazurenko O, Menachemi N. High-deductible health plans reduce health care cost and utilization, including use of needed preventive services. Health Affairs. High-Deductible Health Plans Reduce Health Care Cost And Utilization, Including Use Of Needed Preventive Services | Health Affairs
  4. Healthcare transparency: talking to patients about the cost of their health care. American College of Physicians. Accessed October 21, 2020.https://www.acponline.org/clinical-information/high-value-care/resources-for-clinicians/cost-of-care-conversations
  5. Talking about the costs of care: a guide for health care professionals and patient navigators. National Patient Advocate Foundation. Accessed October 23, 2020.https://www.npaf.org/cost-of-care-conversations-discussion-guide/

Comments are closed.