Originally published in MedPage Today
by Todd Neale, MedPage Today Staff Writer
Raising seniors’ copayments for ambulatory care to offset increasing healthcare costs may backfire on insurers, researchers asserted.
Seniors enrolled in Medicare plans that increased copayments had significantly fewer outpatient visits but spent more time in the hospital than patients in plans that left copayments untouched, according to Amal Trivedi, MD, MPH, of Brown University in Providence, R.I., and colleagues.
Assuming an average reimbursement of $60 for an outpatient visit, seven annual visits per enrollee, and an average copay increase of $8.50 per visit, a plan should save $7,150 for every 100 enrollees, they noted in the Jan. 28 New England Journal of Medicine.
But, assuming an average cost of $11,065 per hospitalization of a person 65 to 84, the researchers estimated that the costs for inpatient care would actually increase by $24,000 for every 100 enrollees in the year after copays are increased.
Even using more conservative criteria, the increased costs for inpatient care would nearly double any savings from increasing copays, they argued.
“Cost-sharing has generally been thought to reduce total healthcare spending without harming health for the average person,” the researchers wrote, but these results suggest increasing copays in Medicare beneficiaries “may be a particularly ill-advised cost-containment strategy.”
Increasing copayments may be particularly harmful to older patients, they said, because they have lower incomes and are more likely to have poor health and greater out-of-pocket healthcare expenses than younger patients.
To explore the issue in a Medicare population, Trivedi and colleagues compared the use of outpatient and inpatient care between enrollees in 18 plans that increased copays for ambulatory care and 18 that did not. The study included 899,060 patients.
According to data from the Medicare Healthcare Effectiveness Data and Information Set from the Centers for Medicare and Medicaid Services, mean copays increased during the study period for both primary care ($7.38 to $14.38) and specialty care ($12.66 to $22.05) in the case plans.
Mean copays remained stable at $8.33 and $11.38 for primary and specialty care, respectively, in the control plans.
In both groups, there were increases in the number of ambulatory visits over time, but the increase was smaller in the plans that raised copays.
There was also a rise in the number of hospitalizations, the proportion of patients who were hospitalized, and the length of time spent in the hospital in both groups, but there were larger increases in the plans that increased copays.
Compared with the control plans, in the year after the increase in copays, case plans had:
* 19.8 fewer annual outpatient visits per 100 enrollees (95% CI 16.6 to 23.1)
* 2.2 additional annual hospital admissions per 100 enrollees (95% CI 1.8 to 2.6)
* 13.4 more annual inpatient days per 100 enrollees (95% CI 10.2 to 16.6)
* A 0.7% increase in the proportion of enrollees who were hospitalized (95% CI 0.51% to 0.95%)
The findings were amplified among enrollees living in areas of lower income and education, black patients, and those who had hypertension, diabetes, or a history of myocardial infarction.
Trivedi and colleagues noted some limitations of the analysis: it was not randomized, and unmeasured differences could have influenced the results.
Also, the case and control plans could not be matched in a geographic area smaller than census region because of the small number of Medicare plans, and data were lacking on diagnoses, procedures, and costs associated with hospital admissions and outpatient visits.