Health Care Costs and Financing

Patients with chronic diseases who pay coinsurance less likely to refill their medication than those with fixed copayments

Patients with a chronic illness such as diabetes are more likely to refill a prescription to treat their condition if they pay a copayment (fixed dollar amount) rather than coinsurance (a fixed percentage of the cost of the drug), even if the actual cost to the patient is the same, a new study finds.

William Encinosa, Ph.D., of the Agency for Healthcare Research and Quality, and Avi Dor, Ph.D., of George Washington University, compared adult patients with type II diabetes in copayment plans with matched patients in coinsurance plans for a 90-day period after the patient completed a diabetes drug prescription.

Patients with coinsurance were 10 percent lower in refill compliance than those with copayments (50 vs. 60 percent fully compliant by the end of 4 weeks). The findings from the matched patients confirmed a prediction from the researchers' economic model that the coinsured patients would be less likely to comply with filling their prescriptions since they are exposed to any drug price increases compared with patients with fixed copayments.

The researchers developed a theoretical model relating coinsurance and copayment levels with the probability of complying with filling a prescription. They then collected data from the Thomson Reuters MarketScan® database, encompassing up to 3.5 million individuals covered by employer-sponsored health insurance. They merged data on prescriptions for type II diabetes with information on whether these plans required copayments or variable coinsurance. The final sample included 6,537 persons in copayment plans (who had similar characteristics to the coinsured sample) matched with 6,537 persons in the coinsurance plans. The researchers recommend that private and government payers re-examine strategies that have imposed higher levels of cost-sharing on patients. They point out that use of higher cost-sharing ignores the importance of consistent use of prescription drugs in preventing complications from chronic diseases such as diabetes and cardiovascular disease.

More details are in "How does cost-sharing affect drug purchases? Insurance regimes in the private market for prescription drugs," by Drs. Dor and Encinosa, in the 2010 Journal of Economics and Management Strategy 19(3), pp. 545-574, 2010. Reprints (AHRQ Publication No. 11-R032) are available from the AHRQ Publications Clearinghouse.

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