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Effect of cost-sharing on the use of medical services by children: interim results from a randomized controlled trial
Insights
Children with full health cost reimbursement spent more on healthcare than those with cost-sharing. Increased cost-sharing reduced outpatient visits but did not affect hospitalizations, supporting coverage for preventive care.
Area of Science:
- Health economics
- Pediatric health services research
- Health services utilization
Background:
- Healthcare costs represent a significant financial burden for families.
- Understanding how insurance cost-sharing affects healthcare utilization in children is crucial for policy development.
- Previous studies have explored the impact of cost-sharing on adult healthcare use, but less is known about pediatric populations.
Purpose of the Study:
- To analyze the impact of varying health insurance cost-sharing levels on healthcare expenditures and utilization among children.
- To determine if cost-sharing influences the use of outpatient versus inpatient services for children.
- To assess the effect of cost-sharing on preventive care utilization in pediatric populations.
Main Methods:
- Analysis of data from 1,136 children participating in The Rand Health Insurance Experiment, a randomized trial.
- Comparison of per capita health care expenditures between children in families with 100% reimbursement and those with 95% cost-sharing up to a family maximum.
- Examination of outpatient utilization measures (doctor visits, expenditures, episodes) and hospital expenditures across different cost-sharing groups.
Main Results:
- Children with 100% reimbursement had one-third higher per capita expenditures than those with 95% cost-sharing.
- Increased cost-sharing significantly decreased outpatient use across various measures, including probability of visits and number of episodes.
- No significant difference in hospital expenditures was observed between children with varying cost-sharing levels.
- Preventive care episodes were as responsive to cost-sharing as acute or chronic illness episodes.
Conclusions:
- Health insurance cost-sharing effectively reduces outpatient healthcare utilization in children.
- Hospital expenditures remain largely unaffected by varying levels of cost-sharing in pediatric populations.
- There is no evidence to suggest that preventive care should be insured less liberally than acute or chronic illness care.
Abstract:
Health care expenditures of 1,136 children whose families participated in a randomized trial, The Rand Health Insurance Experiment, are reported. Children whose families were assigned to receive 100% reimbursement for health costs spent one third more per capita than children whose families paid 95% of medical expenses up to a family maximum. Outpatient use decreased as cost-sharing rose for a variety of use measures: the probability of seeing a doctor, annual expenditures, number of visits per year, and numbers of outpatient treatment episodes. Hospital expenditures did not vary significantly among children insured with varying levels of cost-sharing. Episodes of treatment for preventive care were as responsive to cost-sharing as episodes for acute or chronic illness. The results give no reason not to insure preventive care as liberally as care for acute illness.