Lowering chronic illness co-pays could have long-term savings

Updated 4:00 PM January 17, 2008

Lowering chronic illness co-pays could have long-term savings

By Kara Gavin
UMHS Public Relations

As 2008 begins, millions of Americans are digging deeper into their own pockets when they refill a prescription or see a doctor.

The reason? Higher co-payments that took effect Jan. 1, as employers try to deal with the rising cost of health insurance by making employees and retirees pay more.

But a new study finds that instead of going up, co-pays should go down — at least for some people taking some drugs.

"All research to this point has shown that individuals will not buy important medical services even if there's a small financial barrier: $5 or even $2," says senior author Dr. Mark Fendrick of the Medical School and School of Public Health.

Just by cutting a few dollars off the co-pay, the study suggests, employers could increase the chances that employees with chronic illnesses will take certain preventive medicines. And that could pay off in the long run, in the form of fewer hospitalizations or emergency room visits for employees with diabetes, high blood pressure, asthma and other conditions.

The study is published in the January/February issue of the journal Health Affairs by a team led by U-M and Harvard University researchers. It is the first rigorous, controlled trial of a concept called "value based insurance design."

U-M offers free or reduced-price medications and tests to more than 2,000 of its employees and their dependents who have diabetes. That project, called MHealthy: Focus on Diabetes, is being managed by the Center for Healthcare Quality and Transformation and may produce its first data this year.

Allison Rosen of the Medical School and School of Public Health, who is leading the analysis of the U-M diabetes project, also contributed to the report.

Lowering chronic illness co-pays could have long-term savings

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