Does Health Insurance Cost Sharing Lower Productivity?

One of the most significant concerns about the trend toward a greater share of premiums for health insurance being borne by employees, and toward higher copays, coinsurance and deductibles, is whether such increased cost-sharing might lead to failure to seek health care services when they are really needed.  A new report takes this potential chain of causation a step further to see if the higher cost-sharing might affect employee productivity.    (NBER Report)   A long line of research, primarily in regard to prescription drug copays, finds that higher cost-sharing leads to lower utilization of the service the copay is placed on and potentially to higher use of other services in the long run.  For example, if people don’t take prescribed drugs, particularly for a chronic condition like diabetes, hypertension or asthma, they might end up being hospitalized more or using the ER more frequently.  These authors looked at whether greater cost-sharing might be linked to more absenteeism or more use of short-term disability.

The authors looked only at drug copays and only for patients dealing with pain.  Pain is commonly related to absenteeism and disability, but looking at only one condition obviously should raise red flags about the generalizability of the findings.  Their database was comprised of claims from about 150 employers on about 25,000 employees, around one-fourth of whom had chronic pain diagnoses.  In general they found a one dollar increase in drug copays was associated with about an additional half-hour of absence, with a slightly greater effect among those with a chronic pain diagnosis.   No significant effect was found, however, in the number of days on short-term disability stays in relation to higher cost-sharing amounts.  While the limited number of conditions studied and other factors may give pause when considering the findings, it is not unreasonable to think that there could be some negative effect on productivity if higher cost-sharing deters employees from seeking needed health care.