"Cost Sharing" Comes With a Price

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Insurance companies and government programs like medicare utilize what is known as “cost sharing”. This is simply that patients will have a copay, or deductible, for example. For most patients and insurance companies, this can work as a good balancing act of care and sharing the cost.

But, for the most chronically ill patients, this doesn’t seem to work well. “A 2010 study by the Harvard economist Amitabh Chandra and colleagues found that when cost sharing for physicians visits and prescription drugs goes up, so does overall Medicare spending.”

This thought seems counterintuitive at first, according to Austin Frakt in, “With Sickest Patients, Cost Sharing Comes at a Price”. However, it seems as though those patients with a chronic illness, specifically, tend to take their drugs less often and visit the doctor less often when they have higher cost sharing. This is then estimated to lead to those chronically ill patients not taking their medications, which only incurs larger hospital costs down the road.

The solution to this might be for insurance companies, for chronically ill patients, to actually decrease their deductibles and copayments, this way they are more likely to have their care provided via their doctor, and not extended stay hospital visits which cost much more money.

How can the doctor help?

It is important for doctors to discuss with their patients financial information as it relates to their healthcare. A good relationship between the doctor and patient leads to an honest relationship that may allow for more open dialogue with respect to health care costs and financing those costs. A doctor can explain to the patient the importance of taking their medications, and how it could lead to long term consequences if they don’t.

Discussions like this can lead to healthier patients, and reduced costs, both of which go very well together.

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David Eisenberg is currently a medical student at The Commonwealth Medical College in Scranton, PA, and a contributor to Medical Groups. David believes that it is critically important for physicians to not only be well rounded clinically, but also financially. In an ever changing healthcare system, David hopes to help physicians not only understand how to successfully navigate the dynamic healthcare landscape, but also how to take a leadership role in continuing to develop the medical profession that so many have diligently dedicated their life’s work to. In addition to contributing to Medical Groups, David works with thedoctorschannel.com, as well as helps to run an app for pre-med students that he co-founded, PreMD Tracker.

Follow David on twitter: @deisen3