Cost-sharing and the utilization of clinical preventive services

doi:10.1016/S0749-3797(99)00057-4

American Journal of Preventive Medicine

Volume 17, Issue 2, August 1999, Pages 127-133

https://doi.org/10.1016/S0749-3797(99)00057-4 Get rights and content

Abstract

Background: Little is known about the effect of different forms of patient cost-sharing on the utilization of clinical preventive services or if the effect varies by type of health plan.

Objectives: To assess empirically the relationships between the utilization of recommended preventive services and different forms of patient cost-sharing and how the effect is mediated by type of preventive service (counseling, blood pressure, Pap smear, mammogram), type of cost-sharing (deductibles/coinsurance, copayments), and type of health plan (HMO, PPO/indemnity plan).

Research Design: Sixteen logit models were estimated to assess variation in receiving recommended preventive care as a function of cost-sharing within plan type.

Subjects: A sample of 10,872 employees, aged 18 to 64 years, of seven large companies served by 52 health plans with diverse cost-sharing arrangements who responded to the Pacific Business Group on Health, Health Plan Value Check Survey (response rate, 50.3%).

Measures: Receipt of recommended preventive care was based on the U.S. Preventive Services Task Force Guidelines. The effect of cost-sharing was measured as the percentage change in the probability of receiving recommended preventive care in the cost-sharing group compared to the non cost-sharing group.

Results: The negative effect of patient cost-sharing was greatest on preventive counseling in PPO/indemnity plans (−15%) and on mammograms in all health plan types (−9%–10%). The effect on Pap smears was negative (−8%–10%) for deductibles/coinsurance in PPO/indemnity plans and copayments in HMOs. The effect of cost-sharing on blood pressure was mixed. Deductibles/coinsurance had a greater negative effect than copayments.

Conclusions: Eliminating patient cost-sharing for selected preventive services may be a relatively easy and effective means of increasing utilization of recommended clinical preventive care.

Introduction

In an effort to control health care costs in the United States, public and private health insurers have adopted policies designed to curb demand by increasing cost-sharing for users of medical services. Recent estimates suggest that over 90% of privately insured individuals with employer-sponsored indemnity or PPO insurance are subject to cost-sharing requirements, and 77% of HMO enrollees face copayments averaging $6.00 for primary care visits.1

Prior health services research suggests that when individuals are required to share part of the costs of their services, they use fewer services. This has been found to be the case in public and private fee-for-service systems of medical care, as well as in HMOs.2, 3, 4, 5, 6, 7, 8 Less is known about the impact of cost-sharing on the use of individual preventive services, particularly in a managed care context.

Only 2 experiments have examined explicitly the impact of cost-sharing on utilization of preventive services. Both the Rand Health Insurance Experiment and the natural experiment at the Group Health Cooperative of Puget Sound found that cost-sharing resulted in a reduction in the utilization of preventive care.5, 6, 9 Thus, while cost-sharing strategies may have had the effect of making consumers more cost-conscious and provided the incentives for reduced utilization, they may have inadvertently contributed to the under-utilization of recommended preventive care.10

In recent years, employers, public policy makers, and researchers have focused considerable attention on designing policies to optimize utilization of effective and cost-effective preventive services.10, 11 Given the considerable emphasis currently placed on cost-sharing as a policy instrument, knowing what impact cost-sharing arrangements have on the utilization of preventive care is important in planning benefit packages designed to promote the use of preventive services at recommended levels.12

Although prior studies provide valuable insights, the ability to generalize their findings to the current health care system is limited because of their study designs and the time periods in which they were carried out. The health care system, particularly in California, has changed dramatically in the last 20 years in both its organization, financing and health plan benefit designs.

This research aims to assess empirically the relationship between cost-sharing and the utilization of recommended preventive services (Pap smears, mammograms, blood pressure, and preventive counseling) and how that effect is mediated by different forms of cost-sharing (deductibles/coinsurance and copayments) in different types of health plans (HMO and PPO/indemnity plans).

Section snippets

Data source

Data were obtained from the 1994 Pacific Business Group on Health (PBGH) annual random sample survey of employees, the Health Plan Value Check. The survey collects information on the satisfaction of the employees of member companies with various aspects of their health plans and their utilization of preventive services. PBGH also collects detailed information on employee out-of-pocket cost-sharing for each plan.13

Sample

A total of 26,536 questionnaires were mailed, of which 13,350 were returned, for

Results

The estimated percentage change (and 95% confidence intervals) in receiving a recommended preventive service in a cost-sharing compared to a non cost-sharing plan based on the results of the 16 logit models is presented in Table 2.

The effect of cost-sharing on the utilization of preventive services was significantly negative for 12 of the 16 combinations examined. The magnitude of the negative effect ranged from −15% (copayments and deductibles/coinsurance on counseling in PPO/indemnity plans)

PPO/indemnity plans

In PPO/indemnity plans, deductibles/coinsurance consistently had a greater negative effect on the use of preventive care compared to copayments, with the exception of their effect on preventive counseling, where both were equally negative (−15%). The effect of cost-sharing in PPO/indemnity plans was −7.8% on Pap smears for deductibles/coinsurance compared to no significant effect for copayments, and was −8.6% on mammograms for deductibles/coinsurance compared to only –2.6% for copayments.

Preventive counseling

The effect of cost-sharing on preventive counseling was significantly negative for all forms of cost-sharing in both PPO/indemnity and HMO plans. The negative effect of cost-sharing on preventive care was greatest in PPO/indemnity plans (−15%), followed by the effect of copayments in IPA/network HMO/POS plans (−6.2%), with the least effect in group-model HMOs (−0.9%).

Blood pressure screening

Cost-sharing had a mixed effect on blood pressure screening. Neither deductibles/coinsurance nor copayments in PPO/indemnity

Conclusions

The hypothesis that patient cost-sharing results in lower utilization of recommended clinical preventive services was strongly supported by the results. When compared to employees in non-cost-sharing health plans, employees in cost-sharing plans were less likely to receive a recommended preventive service in 11 of the 16 combinations of type of cost-sharing, preventive service, and plan type examined. The results of this study are consistent with the findings of other studies in the literature

Acknowledgements

The authors gratefully acknowledge the assistance and support of the Pacific Business Group on Health, San Francisco, CA for making available the data for this analysis.

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Of survey respondents, 7,511 women were included. Of this group, 68.9% reported receiving a screening mammogram within the last 2 years and 52.2% reported receiving a screening mammogram within the last year. Of all survey respondents, 48.4% reported worry paying medical bills. Patients who reported worry about paying medical bills (odds ratio [OR] 0.86; 95% confidence interval [CI]: 0.76-0.97; P = .01), challenges affording dental care (OR 0.65; 95% CI: 0.54-0.77; P < .01), and challenges affording eyeglasses (OR 0.67; 95% CI: 0.54-0.84; P < .01) were less likely to report screening mammography use than their respective counterparts. Patients who skipped medication doses (OR 0.69; 95% CI: 0.52-0.91; P < .01), took less medication, (OR 0.63; 95% CI: 0.48-0.82; P < .01), and delayed filling prescriptions (OR 0.71; 95% CI: 0.56-0.90; P < .01) to save money were also less likely to report receiving mammography screening.
Patient-reported cost-related barriers are associated with decreased utilization of routine mammography.
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Although the Affordable Care Act eliminated cost sharing for screening mammography, a concern is that grandfathered plans, diagnostic mammograms, and follow-up testing may still lead to out-of-pocket (OOP) spending. Our study examines how OOP spending among women at their baseline screening mammogram may impact the decision to receive subsequent screening.
The study included commercially insured women aged 40 to 41 years with a screening mammogram between 2011 and 2014. We estimated multivariate linear probability models of the effect of OOP spending at the baseline mammogram on subsequent screening 12 to 36 months later.
Having any OOP payments for the baseline screening mammogram significantly reduced the probability of screening in the subsequent 12 to 24 months by 3.0 percentage points (pp) (95% confidence interval [CI]: 1.1-4.8 pp decrease). For every $100 increase in the OOP expenses for the baseline mammogram, the likelihood of subsequent screening within 12 to 24 months decreased by 1.9 pp (95% CI: 0.8-3.1 pp decrease). Similarly, any OOP spending for follow-up tests resulting from the baseline screening led to a 2.7 pp lower probability of screening 12 to 24 months later (95% CI: 0.9-4.1 pp decrease). Higher OOP expenses were associated with significantly lower screening 24 to 36 months later (coefficient = −0.014, 95% CI: −0.025 to −0.003).
Although cost sharing has been eliminated for screening mammograms, OOP costs may still arise, particularly for diagnostic and follow-up testing services, both of which may reduce rates of subsequent screening. For preventive services, reducing or eliminating cost sharing through policy and legislation may be important to ensuring continued adherence to screening guidelines.
Utilization and cost sharing for preventive cancer screenings
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The Patient Protection and Affordable Care Act (ACA) eliminated cost sharing for certain preventive cancer screenings beginning in September 2010. This paper examines the policy change’s impact on three preventive screenings, mammography, colonoscopy, and cervical screening, among commercially insured individuals.
A retrospective longitudinal quasi-experimental design was utilized. Individuals in grandfathered plans were used as a comparison group because grandfathered plans are not subject to the preventive cost sharing benefit changes of the ACA. A multivariate logistic regression model matched individuals in treatment and comparison groups via propensity scoring. Monthly prevalence rates over the study period (2007–2014) were calculated as well as prevalence rates for the proportion of procedures with greater than 0 cost sharing. An interrupted time series regression analysis was conducted with the primary outcome variable the rate of preventive service utilization per person per month.
The overall trend in utilization of preventive mammography and cervical cancer screening slightly decreased as a result of the ACA cost sharing benefit policy change. There was a non-significant decrease for colonoscopy utilization as a result of the ACA policy change.
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Coordination of a three-stage supply chain through cost sharing is analyzed by Panda, Modak, and Basu (2014). The literature on cost sharing also addresses the healthcare industry with its characteristic cost reimbursement schemes and different players which have to be coordinated to achieve high quality healthcare (Baicker & Goldman, 2011; Chalkley & Malcomson, 2002; Solanki & Schauffler, 1999). Our research borrows from the literature on channel-coordination and considers revenue-sharing and cost-sharing contracts as means to overcome inefficiencies in the development of personalized medicine.
The pharmaceutical industry faces a radical change in its business model. Whereas one-size-fits-all blockbuster drugs dominated in the past, today technological breakthroughs like the decoding of the human genome allow pharmaceutical firms to develop more customized products. This so-called personalized medicine can only work if a product tandem of specialized drug and companion diagnostic test exists, making new product development processes interdependent. We consider a pharmaceutical firm and a diagnostic firm that develop such a product tandem for personalized medicine. We show that the dependence on each other and the diagnostic firm’s option to postpone R&D activities lead to systematic inefficiencies in the development of personalized medicine. In practice, revenue-sharing and cost-sharing contracts are used to address such inefficiencies by better balancing and aligning the financial interests of drug and diagnostic manufacturers. We show that simple revenue-sharing and cost-sharing contracts can often, but not always, solve problems related to postponed or reduced investment, and we characterize settings where the pharmaceutical firm prefers revenue sharing over cost sharing. To account for different existing market structures, we compare the pharmaceutical firm’s contract preferences under regulated and free pharmaceutical pricing.
The Affordable Care Act and Ethnic Disparities in Colorectal Cancer Screening
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There are several deterrents to screening, but cost is considered an important barrier, as well as a potential contributor to screening disparities.5 A substantive body of literature shows that cost sharing, in the form of a deductible, copayment, or other out-of-pocket expense, can deter the use of preventive health services.6–13 Compared with whites, Hispanics are more likely to have incomes lower than 100% of the federal poverty level and report cost as a barrier to accessing healthcare services.14
Cost sharing can deter the use of health services and act as a potential contributor to racial/ethnic disparities in cancer. The Affordable Care Act required most health plans to cover, without cost sharing, preventive services, including colorectal cancer screening. Population-based data were used to estimate the impact of the Affordable Care Act's cost-sharing provision (together with other Affordable Care Act provisions targeting preventive care) on ethnic disparities in colorectal cancer screening, comparing Hispanics with non-Hispanics.
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During the pre–Affordable Care Act period, screening rates decreased annually for non-Hispanics by −0.38 per 100 adults per year (95% CI= −0.55, −0.22) but remained level for Hispanics (annual trend per 100 adults: 0.01, 95% CI= −0.34, 0.35). After cost sharing was eliminated in 2011, colorectal cancer screening rates increased for both Hispanics (by 1.29 per 100 adults, 95% CI=0.69, 1.89) and non-Hispanics (by 0.58 per 100 adults, 95% CI=0.18, 0.99). The difference in trend increases between Hispanics and non-Hispanics was not statistically significant (0.70%, 95% CI= −0.24, 1.64).
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Citation Excerpt :
The policy to eliminate cost-sharing is motivated in part by economic theory, which predicts that reducing a patient's cost of a screening test should lead greater numbers of patients to be tested. Evidence from experimental and observational studies demonstrates that preventive care is price sensitive, supporting this theory (Baicker et al., 2013; Lohr et al., 1986; Meeker et al., 2011; Solanki and Schauffler, 1999; Karter et al., 2003). In evaluating the impact of the ACA on health behaviors, it is first important to understand how this policy reform actually impacted patient out-of-pocket costs for preventive care.
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Research ArticlesCost-sharing and the utilization of clinical preventive services

Abstract

Introduction

Section snippets

Data source

Sample

Results

PPO/indemnity plans

Preventive counseling

Blood pressure screening

Conclusions

Acknowledgements

Am J Prev Med

California’s Medi-Cal copayment experiment

Medical Care

Utilization of publicly insured health services in Saskatchewan before, during and after copayment

Medical Care

Cost-sharing and use of health services. The United Mine Workers of America Health Plan

Medical Care

Some interim results from a controlled trial of cost-sharing in health insurance

NEJM

The effect of office visit copayments on utilization in a health maintenance organization

Medical Care

Effect of Coinsurance on the use of physician services

Social Security Bulletin

Patient cost-sharing for medical servicesa review of the literature and implications for health care reform

Medical Care Review

Research Articles
Cost-sharing and the utilization of clinical preventive services