The National Bureau of Economic Research (NBER) released a working paper detailing how increases in patient cost-sharing can decrease medication usage—and increase mortality.
“As insurers place more emphasis on cost-sharing via deductibles, coinsurance, and copayments, patients pay more out-of-pocket for health care,” says NBER’s new paper, The Health Costs of Cost-Sharing.
The key finding: “small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death.”
“Cutbacks are widespread,” explain the authors—“but most striking are those seen in patients with the greatest treatable health risks, in whom they are likely to be particularly destructive.”
An increase of 33.6% in out-of-pocket price ($10.40 per drug) causes a 22.6% drop in total drug consumption and a 32.7% increase in monthly mortality, finds the report.
“[W]e trace this mortality effect to cutbacks in life-saving medicines like statins and antihypertensives, for which clinical trials show large mortality benefits,” continue the authors. “[T]hose at the highest risk of heart attack and stroke, who would benefit the most from statins and antihypertensives, cut back more on these drugs than lower risk patients.”
The report's conclusion: “cost-sharing schemes should be evaluated based on their overall impact on welfare, which can be very different from the price elasticity of demand.”
BIO's conclusion: we need systemic and bipartisan reforms that address legitimate concerns about U.S. health insurance and delivery. BIO has been advocating for an out-of-pocket cap in Medicare Part D as well as zero cost-sharing for COVID-19 vaccines, treatments, and diagnostics, but it's clear that larger systemic reforms are needed, as well.
Listen: BIO’s Deputy General Counsel John Murphy and Alliance for Aging Research President and CEO Sue Peschin recently joined the I AM BIO Podcast to discuss drug pricing policy proposals and how we can lower patients’ out-of-pocket costs. Listen at www.bio.org/podcast or wherever you get your podcast fix, including Apple, Google, or Spotify.
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