Patients’ Knowledge and Its Effect on Cost

The American Journal of Managed Care contains a study relating to consumers’ understanding of the cost-sharing features of their insurance coverage and the impacts of that understanding or lack of understanding on utilization.   (AJMC Article) The study group was state employees in Massachusetts and both self-reported and claims data was utilized for the research.  The study looked at outpatient and emergency room utilization.  Consumers were asked about the cost-sharing features of their insurance and how that cost-sharing affected their utilization.  Claims data was used to determine actual utilization.

The results indicate that regardless of knowledge or lack of knowledge of cost-sharing, utilization did not change when cost-sharing increased.  Consumers, however, reported that they delayed or did not get care because of higher copays.   Underlying utilization trends suggest that the consumers simply had a misperception about their actions.  About two-thirds of employees knew their premium cost share amounts and their office visit copays.  Of those who were wrong, they were more likely to overstate premium share and understate copay amount.  Only about half knew the emergency room copay, with those in error being more likely to overstate that copay significantly.   Interestingly, the more knowledgeable consumers were more likely to have office visits and emergency room visits.   When copays increased, consumers with no knowledge decreased their office visits, but those who understood their benefits did not have a significant change in utilization.  This seems counterintuitive, but perhaps those who understand the overall financial picture of their health care costs, premiums and copays, make a more complex decision that a copay is a small piece in the overall picture.  Alternatively, people may just accept whatever happens with costs and continue their prior utilization patterns through inertia.

One useful finding was that consumers reported more impact on utilization from cost-sharing than claims data shows actually existed.  This suggests that it is dangerous to rely on survey data to understand the extent to which people actually delay or don’t seek care because of cost.    This study focused on the effect of cost in consumers’ decisions to seek care.  It is equally important to ascertain how well consumers can make judgments about the severity of their medical need.  Having some responsibility for the cost of care will only make people more judicious consumers if they have enough information and can make good decisions about their medical situation.  That may be a significant flaw, particularly for lower income, less-educated patients, who tend to have higher medical utilization.