Timing out-of-pocket spending in health care is challenging
Almost all commercial insurance plans have cost-sharing provisions where patients help pay for their health care services.
Annual deductibles — which patients have to meet before insurance pays anything at all — and co-payments — where the patient pays either a fixed amount for or a share of the cost of each service received — are common examples.
Cost-sharing generally reduces the health insurance premium by simply shifting a share of the costs to enrollees. But it also affects utilization because having to pay for a share of the care can deter people from getting it.
How cost-sharing actually works in practice is the subject of this episode’s A Health Podyssey.
Stacie Dusetzina from Vanderbilt University School of Medicine and Michal Horný from Emory University published a paper in the February 2021 edition of Health Affairs that analyzes the out-of-pocket spending patterns for commercially-insured individuals. They focused on the timing for when expenses are incurred.
The unique analysis points to some distorting of the provisions of a typical health insurance plan. In particular, they found that although most commercially-insured people had several health care encounters throughout the year, their out-of-pocket spending was mostly concentrated within short time intervals.
Listen to Health Affairs Editor-in-Chief Alan Weil interview Stacie Dusetzina and Michal Horný on out-of-pocket health care spending.
This episode is sponsored by the Rural Health Research Gateway at the University of North Dakota.