Study: Higher co-pays drop drug use, raise costs

New research suggests that, at least in patients with chronic diseases, raising drug co-pays tends to cut drug use--but also raise the rate of patient hospitalizations and ED visits. The research, conducted by Dana Goldman, director of RAND Health's Bing Center on Health Economics, found that for every 10 percent increase in consumer cost-sharing, pharmacy spending drops 2 to 6 percent. However, in patients with conditions like congestive heart failure, high cholesterol, diabetes and schizophrenia, such pharmacy cost drops are associated with increases in the need for expensive hospital services. The evidence that greater drug cost-sharing raises inpatient and ED costs for the chronically ill was "unambiguous," Goldman said.

To prepare his paper, Goldman studied 132 articles published from 1985 to 2006, analyzing how drug cost-sharing affected drug access, medical spending and health outcomes. The research was published this week in the Journal of the American Medical Association.

To learn more about the study:
- read this United Press International item

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