How Not to Control Health Care Costs
Despite passage of new federal health care legislation, the nation will still need to address the problem of health care expenses that have been increasing faster than wages and that are consuming a larger share of GDP each year.
Though we have a new health care law that expands access to health care for millions of Americans, its provisions to control the rising cost of health care are modest. As a result, the nation will still need to address the problem of health care expenses that have been increasing faster than wages and that consume a larger share of GDP each year. One set of reformers argue for having patients pay directly for a greater portion of their health care expenses, thus encouraging them to better monitor their health and use medical resources more judiciously. However, a recent study in the New England Journal of Medicine suggests that having patients pay higher out-of-pocket fees for doctors’ visits can backfire, at least for elderly patients.
A study of elderly patients on Medicare examined the impact of asking patients to pay higher co-pays. Compared to patients whose co-pays were unchanged, patients whose co-pays nearly doubled went to the doctor less, but were more likely to be hospitalized and spent more days in the hospital with each admission. The study concludes that higher co-pays can result in higher health care costs and worse health outcomes.
Associate Director and Senior Policy Analyst, Frontier Group
Elizabeth Ridlington is associate director and senior policy analyst with Frontier Group. She focuses primarily on global warming, toxics, health care and clean vehicles, and has written dozens of reports on these and other subjects. Elizabeth graduated with honors from Harvard with a degree in government. She joined Frontier Group in 2002. She lives in Northern California with her husband and son.