Patient "Skin in the Game" Has Its Limits: The Assymetry of Patient Cost-Sharing Incentives

The Disease Management Care Blog always thought that the upsides and downsides of patient "skin in the game" was "symmetrical."  Writing in the Oct 24 issue of JAMA, Kevin Volpp and colleagues point out that that may not be true and that patient economic incentives may not necessarily work as intended when it comes to Choosing Wisely. 

Rather, economic incentives can be asymmetrical.

In other words, it's commonly thought that if increasing patient out-of-pocket cost for a drug (for e.g., an unproven brand-name drug) or unnecessary health care service (for e.g., antibiotics for uncomplicated sinusitis) decreases utilization in a population by a certain amount, it should stand to reason that decreasing the cost (for e.g., for a cholesterol drug) by the same amount would correspondingly increase utilization (for e.g., among heart attack patients). 
 
According to Dr. Volpp and colleagues, it doesn't work out that way.  Research has shown that increasing out-of-pocket costs can readily prompt patients to defer testing or treatment.  However, the converse is less true: decreasing out of pocket costs has limited impact on incenting patients to embrace testing or treatment.

Reasons include:

1) persons are generally more sensitive to financial losses than to gains (especially when those gains are intangible savings).

2) when it comes to drugs, a decreased or absent co-pays every 30 or 90 days has little impact on the daily decision to take a pill

3) increases in cost dissuade patients that already want a service or medication; decreases target a different population of patients who are not engaged and are already paying nothing.

Implications for the population health management industry and the patient centered medical home: coaching patients to take their medications or to pursue needed testing may require significantly different approaches depending on out-of-pocket co-pay arrangement.   Patients are more likely to view cost sharing as a barrier, while those with little cost-sharing may benefit from additional incentives.