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Health Care Costs and Financing

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Studies detail the impact of costs on drug and health care use

A new study supported by the Agency for Healthcare Research and Quality (HS09622) found that the proportion of Medicare beneficiaries who skipped medications and treatments because of costs increased nearly 4 percent in 2000. A second AHRQ-supported study (HS11434) revealed that when faced with an emergency department copayment, Medicare and other patients most commonly sought care from other available alternatives, but rarely avoided medical care altogether. According to a third study by AHRQ and other researchers, privately and publicly insured individuals with low incomes or functional impairments encounter significant financial barriers to care, despite having health insurance. The three studies are discussed briefly here.

Wilson, I.B., Rogers, W.H., Chang, H., and Safran, D.G. (2005, August). "Cost-related skipping of medications and other treatments among Medicare beneficiaries between 1998 and 2000." Journal of General Internal Medicine 20, pp. 715-720.

The proportion of people aged 65 and older who skipped medications due to cost burden increased from 9.5 percent in 1998 to 13.1 percent in 2000, according to this study. However, the cost-related skipping rate was estimated to be 81 percent when using a model representing a person age 65, who was in poor health, had no prescription drug coverage, had out-of-pocket costs of over $50 per month, had a low income, and had a poor physician-patient relationship.

Increases in out-of-pocket medication costs (far in excess of the Consumer Price Index between 1998 and 2000) and HMO membership (which had limited drug benefits during this period) explained most of the increase in cost-related skipping. Having a low income and lacking prescription drug coverage were also associated with more skipping. Having a better physician-patient relationship, better physical and mental health, and greater age were associated with less cost-related skipping.

This is the first study to show the important role of the physician-patient relationship in cost-related medication skipping. The findings were based on data from the Study of Choice and Quality in Senior Health Care, a longitudinal study of Medicare beneficiaries aged 65 and older in 13 States.

Reed, M., Fung, V., Brand, R., and others (2005, August). "Care-seeking behavior in response to emergency department copayments." Medical Care 43(8), pp. 810-816.

When patients are faced with out-of-pocket costs such as an emergency department (ED) copayment, they often seek care from other available alternatives but rarely avoid medical care altogether, according to this study. Researchers conducted telephone interviews with a random sample of 932 adult members of a large health delivery system about knowledge of their copayment level for ED services and how cost-sharing affected their decisions about where or when to seek care.

Overall, 82 percent of adults surveyed had a copayment for ED services that ranged between $5 and $100, and 41 percent correctly reported the amount of this copayment. Concerns about the ED copayment led nearly one in five patients (19 percent) to alter how they sought care in the past year. Twelve percent sought care from an alternate delivery site (such as an urgent care or primary clinic), 12 percent contacted a provider by telephone or the Internet, 9 percent delayed going to the ED, and 2 percent avoided medical care altogether.

After adjusting for other factors associated with care-seeking behavior, the ED copayment amount was significantly associated with reported changes in care-seeking behavior. Patients with lower annual household income or lower health status were more likely to change their behavior because of the ED copayment. These findings suggest that modest levels of cost sharing for emergency care can encourage patients to seek alternative forms of care without leading them to avoid care altogether.

Weinick, R.M., Byron, S.C., and Bierman, A.S. (2005, June). "Who can't pay for health care?" Journal of General Internal Medicine 20, pp. 504-509.

Researchers found that privately and publicly insured individuals who have low incomes or functional impairments encounter significant financial barriers to care despite having health insurance. Using data from the Commonwealth Fund 2001 Health Care Quality Survey of U.S. adults, researchers examined measures of avoiding health care due to cost. These included delaying or not seeking care, not filling prescriptions for medicine, and not following a recommended treatment plan.

The proportion of Americans surveyed who had difficulty affording health care varied by income and health insurance coverage. Overall, 16.9 percent reported at least 1 financial barrier to care. Independent of insurance coverage and other demographic characteristics, the poor, near poor, and middle-income respondents, as well as those with functional impairments, were significantly more likely than others to avoid care due to cost. Among those with private insurance, the poor (28.4 percent), near poor (24.3 percent), and functionally impaired (22.9 percent) were more likely to report avoiding care due to cost. In models that accounted for several factors affecting use of care, the uninsured were over twice as likely to have trouble paying for care.

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