Health Care Costs

Copayments designed to obtain cost savings in Oregon's Medicaid program shifted treatment patterns but did not affect expenditures on low-income, adult beneficiaries, according to a study in Health Services Research.

According to the study, while the policy did reduce overall use of services, the copays produced other intended and unintended consequences, including shifts in treatment patterns that in some cases did not produce cost-efficient or effective care. Overall, increases and decreases in expenditures canceled each other out, the study found. The researchers wrote that the Oregon program might have been able to incur overall savings by eliminating drug copays or establishing income-based limits on total copays to reduce unintended effects.

According to the researchers, although copays generally are effective as a way to reign in costs in commercially insured populations, there needs to be a greater understanding of how they work in Medicaid programs for the strategy to be successful in that context. The researchers concluded that policymakers seeking to limit the growth of Medicaid expenditures should "be wary" of relying heavily on traditional, demand-side cost-sharing, especially for low-income beneficiaries (Wallace et. al, Health Services Research, April 2008).