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.

Order your copy of the July 2021 issue of Health Affairs.

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