Consumer Cost-Sharing in Primary Care: Unintended Health and Economic Outcomes

Lead Research Organisation: University College London
Department Name: Economics

Abstract

In many countries, even insured individuals must pay a fee (usually patient cost-sharing) to see their family doctor. The theoretical purpose of that fee is one of cost-containment: to limit the overuse of doctor visits, although it can also play a role in the funding the health system.

An unintended consequence of such fees is that they might prevent individuals from visiting their family doctor for necessary medical conditions. Hence, individuals' health might deteriorate, and in the future they might need much more expensive medical treatments (e.g. hospitalizations), which would defeat the cost containment purpose that the fee was supposed to serve.

The importance of this unintended consequence might be growing with the rapid increase in Non-Communicable Diseases (NCDs), which require timely diagnosis and management through primary care services. For many NCDs, it is easier to postpone doctor visits because they are not painful in their initial stages (e.g. diabetes), but if they are not diagnosed timely and appropriately managed, they will lead to more expensive medical procedures in the future. Visiting the family doctor might help to diagnose the conditions timely, as well as to keep an adequate management of such conditions.

Hence, patient fees might be favoring use of hospitals instead of primary care services, which is inefficient because hospital services are much costlier. This inefficiency weakens the health system and limits how much the health system can improve in other dimensions (coverage, quality improvement).

Although the literature has been interested in this topic, most previous research has reported associations, which might be spurious. Some recent papers have been able to estimate the effect of patient fees on health, but they have not been able to assess how health care use patterns or overall treatment costs change. These are key issues to understand how patient fees affect the health system (split of resources between primary and secondary care), and its efficiency.

To contribute to this debate, we will be testing whether (and by how much) increased patient fees in primary care increase undiagnosed chronic conditions, adverse health outcomes, mortality, use of hospital services, and treatment costs both in the short and long term (up to 7 years).

To conduct this work, we will be using health administrative data for the years 2011 to 2018, covering 97% of the Colombian population and containing patients records of all health care services provided in the Colombian Health System, including date and type of service used (outpatient, hospital, etc), prescriptions, treatment costs, ICD-10, sociodemographic characteristics of individuals (including income or wealth scores) and mortality. The person identifier is consistent across the seven years, providing a uniquely rich and detailed longitudinal administrative database. Moreover, its huge size allows us to estimate the effects of interest for particular subpopulations of interest (e.g. individuals with poor socio-economic status, or chronic patients).

However, data is not enough to provide a robust answer to the question of interest. We also need a method to be sure that we will not be reporting spurious associations in the data. Experiments are usually used for that purpose but they are unlikely to provide us with long term effects as the ones that we will be estimating, nor the samples be large enough.

We are fortunate enough that the patient cost-sharing system in Colombia works "in abrupt jumps," that is, cost-sharing jumps abruptly at pre-specified thresholds of some continuous variables. This is the ideal setting to apply a quasi-experimental method called Regression Discontinuity (RD), which is known to provide causal estimates, free of spurious correlations, under very weak assumptions. Note that you cannot use RD whenever you want, the conditions must be there, but we are fortunate that they do hold in Colombia.

Technical Summary

The main objective of this proposal is to establish whether increased levels of patient cost-sharing reduce the use of primary care services, and increase undiagnosed chronic conditions, hospitalizations, health care costs, and mortality. To fulfill this objective, we need:

(a) a dataset representative of the population, and that is large enough so that effects on hospitalizations, chronic condition diagnosis, and mortality can be precisely estimated, not only for the entire population, but also for subgroups of especial interest (e.g. poor SES individuals);

(b) An empirical design that will allow the researchers to go beyond associations, and estimate the causal impact of patient cost-sharing on the relevant outcomes in the absence of an experiment.

Regarding (a), the data for this proposal consists of health administrative data for the years 2011 to 2018, covering 97% of the Colombian population and containing patients records of all health care services provided in the Colombian Health System, including date and type of service used (outpatient, hospital, etc.), prescriptions, treatment costs, ICD-10 codes, sociodemographic characteristics of individuals (including income or wealth scores) and mortality. The person identifier is consistent across the seven years, providing a uniquely rich and detailed longitudinal administrative database.

Regarding (b), We will exploit a unique feature of the Colombian Health System that makes it particularly suitable to the use of the Regression Discontinuity quasi-experimental method: the level of patient cost-sharing changes abruptly at determined thresholds of a continuous variable. The Regression Discontinuity method is highly regarded for its ability to estimate causal estimates (Lee and Lemieux 2010).

The results of the study constitute the first step towards investigating the consequences of consumer cost-sharing to health systems in middle income countries, which will be pursued in a future proposal.

Planned Impact

This research will benefit the Ministry of Health and Social Protection in Colombia, as well as the managers of public and private insurance funds in Colombia. Thanks to this research, they will learn how health outcomes (including chronic conditions and mortality), health care utilization patterns (primary vs. secondary care) and health care costs in the short and longer term (both in primary and secondary care) will change if the level of patient cost-sharing changes. This is vital information to improve the efficiency of the health system, as well as to plan future investments in the sector.

This research will also benefit Colombian citizens because the results of their research will inform how their health will improve if patient cost-sharing decreases or is eliminated. The research will also inform how to obtain efficiency gains in the system, which will ultimately lead to lower payroll contributions and taxes, or better health outcomes for the same payroll contributions and taxes.

The research will also benefit policy makers from other countries. Patient cost-sharing is a very active area of policy making, as it plays a very important role in the health coverage system, and Universal Health Coverage has gained great importance in the policy arena. The results of our research will provide very important information to policy makers on the consequences of patient cost-sharing on health, health care utilization patterns, and health care costs, both in the short and longer term. Because we will provide evidence on all the steps of the causal chain, estimates for different sub groups (by socio-economic status, chronic conditions, age, gender, etc), and extensive contextualized information, international policy makers will be in a good position to think how our results translate into their setting.

This research will also benefit international institutions, such as the World Health Organization, Pan American Health Organization, World Bank, and Inter-American Development Bank, who will have more information on the consequences of patient cost-sharing and will be better informed to influence policy and how to advise governments. This is very important in light of worldwide progress towards Universal Health Coverage.

Some NGOs and advocacy groups also play a very important role in shaping health policy internationally, and our research will provide them with rigorous information on how patient cost-sharing affects health outcomes, utilization patterns, and health care costs.

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