Co-payment for Unfunded Additional Care in Publicly Funded Healthcare Systems: Ethical Issues.

The burdens of resource constraints in publicly funded healthcare systems urge decision makers in countries like Sweden, Norway and the UK to find new financial solutions. One proposal that has been put forward is co-payment-a financial model where some treatment or care is made available to patients who are willing and able to pay the costs that exceed the available alternatives fully covered by public means. Co-payment of this sort has been associated with various ethical concerns. These range from worries that it has a negative impact on patients' wellbeing and on health care institutions, to fears that co-payment is in conflict with core values of publicly funded health care systems. This article provides an overview of the main ethical issues associated with co-payment, and ethical arguments both in support of and against it will be presented and analyzed.

Scaling cost-sharing to wages: how employers can reduce health spending and provide greater economic security.

In the employer-sponsored insurance market that covers most Americans; many workers are "underinsured." The evidence shows onerous out-of-pocket payments causing them to forgo needed care, miss work, and fall into bankruptcies and foreclosures. Nonetheless, many higher-paid workers are "overinsured": the evidence shows that in this domain, surplus insurance stimulates spending and price inflation without improving health. Employers can solve these problems together by scaling cost-sharing to wages. This reform would make insurance better protect against risk and guarantee access to care, while maintaining or even reducing insurance premiums. Yet, there are legal obstacles to scaled cost-sharing. The group-based nature of employer health insurance, reinforced by federal law, makes it difficult for scaling to be achieved through individual choices. The Affordable Care Act's (ACA) "essential coverage" mandate also caps cost-sharing even for wealthy workers that need no such cap. Additionally, there is a tax distortion in favor of highly paid workers purchasing healthcare through insurance rather than out-of-pocket. These problems are all surmountable. In particular, the ACA has expanded the applicability of an unenforced employee-benefits rule that prohibits "discrimination" in favor of highly compensated workers. A novel analysis shows that this statute gives the Internal Revenue Service the authority to require scaling and to thereby eliminate the current inequities and inefficiencies caused by the tax distortion. The promise is smarter insurance for over 150 million Americans.

Writing off copayments.

Professions are accorded respect and autonomy by society in exchange for their willingness to enforce their own professional standards. A case is discussed where an associate discovers that the principal dentist is routinely not collecting the 20% copayment required by insurance contracts. Analysis shows that this practice is unethical, illegal, and unprofessional. Practical advice is offered for how such an issue should be addressed.

Moral hazard and supplier-induced demand: empirical evidence in general practice.

Changes in cost sharing and remuneration system in the Netherlands in 2006 led to clear changes in financial incentives faced by both consumers and general practitioner (GPs). For privately insured consumers, cost sharing was abolished, whereas those socially insured never faced cost sharing. The separate remuneration systems for socially insured consumers (capitation) and privately insured consumers (fee-for-service) changed to a combined system of capitation and fee-for-service for both groups. Our first hypothesis was that privately insured consumers had a higher increase in patient-initiated GP contact rates compared with socially insured consumers. Our second hypothesis was that socially insured consumers had a higher increase in physician-initiated contact rates. Data were used from electronic medical records from 32 GP-practices and 35336 consumers in 2005-2007. A difference-in-differences approach was applied to study the effect of changes in cost sharing and remuneration system on contact rates. Abolition of cost sharing led to a higher increase in patient-initiated utilisation for privately insured consumers in persons aged 65 and older. Introduction of fee-for-service for socially insured consumers led to a higher increase in physician-initiated utilisation. This was most apparent in persons aged 25 to 54. Differences in the trend in physician-initiated utilisation point to an effect of supplier-induced demand. Differences in patient-initiated utilisation indicate limited evidence for moral hazard.

Attrition in the RAND Health Insurance Experiment: a response to Nyman.

In a prior article in this journal, John Nyman argues that the effect on health care use and spending found in the RAND Health Insurance Experiment is an artifact of greater voluntary attrition in the cost-sharing plans relative to the free care plan. Specifically, he speculates that those in the cost-sharing plans, when faced with a hospitalization, withdrew. His argument is implausible because (1) families facing a hospitalization would be worse off financially by withdrawing; (2) a large number of observational studies find a similar effect of cost sharing on use; (3) those who left did not differ in their utilization prior to leaving; (4) if there had been no attrition and cost sharing did not reduce hospitalization rates, each adult in each family that withdrew would have had to have been hospitalized once each year for the duration of time they would otherwise have been in the experiment, an implausibly high rate; (5) there are benign explanations for the higher attrition in the cost-sharing plans. Finally, we obtained follow-up health-status data on the great majority of those who left prematurely. We found the health-status findings were insensitive to the inclusion of the attrition cases.

American health policy: cracks in the foundation.

Much American health policy over the past thirty-five years has focused on reducing the additional health care that is consumed when a person becomes insured, that is, reducing moral hazard. According to conventional theory, all of moral hazard represents a welfare loss to society because its cost exceeds its value. Empirical support for this theory has been provided by the RAND Health Insurance Experiment, which found that moral hazard--even moral hazard in the form of effective and appropriate hospital procedures--could be reduced substantially using cost-sharing policies with little or no measurable effect on health. This article critically analyzes these two cornerstones of American health policy. It holds that a large portion of moral hazard actually represents health care that ill consumers would not otherwise have access to without the income that is transferred to them through insurance. This portion of moral hazard is efficient and generates a welfare gain. Further, it holds that the RAND experiment's finding (that health care could be reduced substantially with little or no effect on health) may actually be caused by the large number of participants who voluntarily dropped out of the cost-sharing arms of the experiment. Indeed, almost all of the reduction in hospital use in the cost-sharing plans could be attributed to this voluntary attrition. If so, the RAND finding that cost sharing could reduce health care utilization, especially utilization in the form of effective and appropriate hospital procedures, with no appreciable effect on health is spurious. The article concludes by observing that the preoccupation with moral hazard is misplaced and has worked to obscure policies that would better reduce health care expenditures. It has also led us away from policies that would extend insurance coverage to the uninsured.

Rethinking professional ethics in the cost-sharing era.

Changes in healthcare financing increasingly rely upon patient cost-sharing to control escalating healthcare expenditures. These changes raise new challenges for physicians that are different from those that arose either under managed care or traditional indemnity insurance. Historically, there have been two distinct bases for arguing that physicians should not consider costs in their clinical decisions--an "aspirational ethic" that exhorts physicians to treat all patients the same regardless of their ability to pay, and an "agency ethic" that calls on physicians to be trustworthy advisors to their patients. In the setting of greater patient cost-sharing, physicians' aspiration and agency roles increasingly conflict. Satisfactorily navigating the new terrain of consumer-driven healthcare requires physicians to consider these two roles and how they can best be reconciled so as to maximize quality of care while respecting the heterogeneity of patients' financial resources and willingness to pay.