Making Health Care Cost More

In case you missed it, the New York Times reported earlier this week on a new study published in the New England Journal of Medicine that shows just how you can run up the cost of Medicare. It says:

     When Medicare plans raise co-payments for outpatient care, older people cut back on doctors’ visits, then wind up needing more expensive hospital care, a new study reports.

Here is a bit from the Journal article:

We examined the consequences of increasing copayments for ambulatory care in a large, nationally representative sample of elderly Medicare enrollees in managed-care plans. As compared with matched control plans in which copayments for ambulatory care were unchanged, Medicare plans that increased these copayments by an average of 95% for primary care and 74% for specialty care had a reduction in the number of outpatient visits but an increase in hospital admissions, in the number of days of hospital care, and in the proportion of enrollees who used hospital care. According to our estimates, for every 100 elderly enrollees exposed to this level of increased cost sharing for ambulatory care, there would be 20 fewer outpatient visits during the first year after the increase but more than 2 additional admissions for acute care and approximately 13 additional inpatient days in the year after the increase. The effects of copayment increases on the subsequent use of inpatient care were magnified for enrollees living in areas with low income and low educational levels, for black enrollees, and for enrollees who had hypertension, diabetes, or a history of acute myocardial infarction as compared with the effects observed for the entire study cohort.

3 responses to “Making Health Care Cost More

  1. So if I understand this correctly, if you provide a Cadillac plan, you save money.

    What a taxing thought.

  2. George Fulmore

    Cadillac plans are simply expensive health care plans that give “additional” benefits to privileged people who have then not been taxed for these “additional” benefits, which could be spa treatments, health “vacations,” etc. Cadillac health plans increase health care costs to employers and raise the costs of products and services, in turn.
    Medicare, for the most part, is already a “cadillac” health care plan. It is comprehensive and has no limits, annual or lifetime, for catastrophic events. It is about as good as it gets.
    The basis problem for all of us is that we have a hodge podge of health care services now in this country that, overall, are highly inefficient and overpriced. See the excellent article in The New Yorker on all this:

  3. On the one hand, political and economic necessity may make young invincible policies a good idea. On the other hand, we’re diluting the health insurance pool. More at

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