NEJM: Increased co-payments lead to more hospitilizations among elderly

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Increasing co-payments of outpatient visits for Medicare beneficiaries can lead to increased ambulatory care costs, according to research published in the Jan. 28 issue of the New England Journal of Medicine.

“Economic theory and empirical evidence suggest that patients will use fewer health services when they have to pay more for them,” wrote the authors. "Increasing the co-payment for ambulatory care, for instance, has been shown to reduce the number of outpatient visits.”

Amal N. Trivedi, MD, and colleagues from the department of community health at the Alpert Medical School at Brown University in Providence, R.I., analyzed 899,060 Medicare beneficiaries between the years of 2001 and 2006 to examine the consequences of increasing co-payments for the elderly population.

Data of the beneficiaries was collected from the Medicare Healthcare Effectiveness Data and Information Set (HEDIS) that is maintained by the Center for Medicare & Medicaid Services (CMS).

While all enrollees were over the age of 65, those in the case plans were more likely to be African American, with little education and a lower income.

To compare changes in outpatient and inpatient care costs, researchers first identified 18 health plans that raised co-payments for ambulatory care without increasing cost-sharing for prescription drugs. Secondly, the researchers matched 18 case plans with 18 control plans (those where co-payments and prescription coverage did not increase) and analyzed the results.

Findings showed that within these case plans, co-payment rates increased by 95 percent for primary care visits and 74 percent for specialized visits. The interquartile range of these increases was between $5 and $10 for primary care co-payments and between $5 and $15 for specialty visits.

The more expensive plans saw co-payments double for primary care, from $7.38 on average to $14.38, and from $12.66 to $22.05 for specialty care. For the plans where co-payments remained constant, those co-payments remained at $8.33 for primary care and $11.38 for specialty care.

While researchers found that “over time, there was an increase in ambulatory visits in both the case and control groups,” the increase was larger in control plans compared to case plans.

“Medicare plans [case plans] that increased these co-payments by an average of 95 percent for primary care and 74 percent for specialty care had a reduction in the number of outpatient visits but an increase in hospital admissions.”

Of the 18 case plans, 13 showed a decrease in annual outpatient visits while 15 had an increase in inpatient admissions.

In addition, researchers found that this increased cost-sharing led to 20 fewer outpatient visits annually per every 100 enrollees, but hospital admissions grew by two for every 100 enrollees. It also led to 13 additional inpatient days in the hospital per 100 enrollees.

"It is a lose-lose proposition for most health plans," said Trivedi. "Our study suggests that when you raise co-payments for ambulatory care among elderly beneficiaries, particularly those with low incomes, lower education and chronic disease, they do cut back on their outpatient care but are more likely to need expensive hospital care."

Researchers suggest that conducting a future study during a longer time period could have depicted different patterns.