Scholarly article on topic 'Trends in cost sharing among selected high income countries—2000–2010'

Trends in cost sharing among selected high income countries—2000–2010 Academic research paper on "Economics and business"

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Abstract of research paper on Economics and business, author of scientific article — Zare Hossein, Anderson Gerard

Abstract Many high income countries increased their level of patient cost sharing between 2000 and 2010 as one component of their policy agenda to reduce the level of health care spending. We use data from the OECD, European Observatory, and country-specific resources to analyze trends in the UK, Germany, Japan, France, and the United States. Some forms of cost sharing—deductibles, co-insurance, or co-payments—increased in all these countries, with the highest rates of increase occurring in the pharmaceutical sector. In spite of higher levels of cost-sharing, out-of-pocket spending as a percentage of total spending remained unchanged in most of these countries because they instituted programs to protect certain categories of individuals by creating out-of-pocket limits, exempting people with certain chronic diseases, or eliminating cost sharing for certain demographic groups and low-income people.

Academic research paper on topic "Trends in cost sharing among selected high income countries—2000–2010"

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Health Policy

journal homepage www.elsevier.com/locate/healthpol

HEALTH

POLICY

Trends in cost sharing among selected high income countries-2000-2010^'^

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Hossein Zarea1, Gerard Anderson

a Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health, 624 North Broadway Avenue, Hampton House, Suite #310, Baltimore, MD, United States

b Department of Health Policy and Management, Johns Hopkins Bloomberg School ofPublic Health, 624 North Broadway Avenue, Hampton House, Suite #304, Baltimore, MD, United States

ARTICLE INFO

Article history: Received 16 October 2012 Received in revised form 18 May 2013 Accepted 27 May 2013

Keywords:

Cost sharing

Out-of-pocket

Deductibles

Co-insurance

Co-payment

Vulnerable groups

ABSTRACT

Many high income countries increased their level of patient cost sharing between 2000 and 2010 as one component of their policy agenda to reduce the level of health care spending. We use data from the OECD, European Observatory, and country-specific resources to analyze trends in the UK, Germany, Japan, France, and the United States. Some forms of cost sharing—deductibles, co-insurance, or co-payments—increased in all these countries, with the highest rates of increase occurring in the pharmaceutical sector. In spite of higher levels of cost-sharing, out-of-pocket spending as a percentage of total spending remained unchanged in most of these countries because they instituted programs to protect certain categories of individuals by creating out-of-pocket limits, exempting people with certain chronic diseases, or eliminating cost sharing for certain demographic groups and low-income people.

© 2013 The Authors. Published by Elsevier Ireland Ltd. All rights reserved.

1. Introduction

One response to the increasing percentage of the gross domestic product (GDP) being spent on health care sector between 2000 and 2010 was that many OECD countries created or expanded cost sharing programs to reduce the demand for health care services, to reduce moral hazard [1], or to promote appropriate utilization of health care services [2,3]. In this paper, we focus on the use of three different types of cost sharing: deductibles,

* This is an open-access article distributed under the terms of the Creative Commons Attribution-NonCommercial-ShareAlike License, which permits non-commercial use, distribution, and reproduction in any medium, provided the original author and source are credited.

** Open Access for this article is made possible by a collaboration between Health Policy and The European Observatory on Health Systems and Policies.

* Corresponding author. Tel.: +1 410 955 3241; fax: +1 410 614 8964. E-mail addresses: hzare@jhsph.edu (Z. Hossein), ganderso@jhsph.edu

(A. Gerard).

1 Tel.: +1 410 614 0161; fax: +1 410 614 8964.

co-insurance and co-payments. This article focuses on changes in cost sharing in three large sectors of the health care industry—pharmaceutical, outpatient and inpatient services—and then examines some of the mechanisms these countries have taken to protect vulnerable groups from increases in cost sharing. We compare the programs in France, Germany, Japan, the UK, and the United States. These five high income countries represent more than half of the populations in OECD countries2 in 2010 [4,5]. Also, according to one health system classification algorithm, these countries use a variety of financing systems including: National Health Insurance, National Health Service, Social Health Insurance and Mixed System [6].

Countries began this time period with different approaches to cost sharing and their thinking evolved over this time period. One reason their thinking evolved was each country's own experience with cost sharing; another

2 USA, Japan, Mexico, Germany, Turkey, France and UK were the five countries with the largest population in the OECD during the period 2000-2010.We did not include Turkey and Mexico because those countries are not comparable on many indicators.

0168-8510/$ - see front matter © 2013 The Authors. Published by Elsevier Ireland Ltd. AH rights reserved. http://dx.doi.Org/10.1016/j.healthpol.2013.05.020

reason was they compared their experience with other similar countries. In this paper, we assemble health care cost sharing experiences of these countries and compare their evolution of cost sharing approaches and whom they have chosen to protect from increasing levels of cost sharing across the countries. The intention is to provide policy makers with a mechanism to compare the cost sharing approaches taken and the groups the various countries consider most vulnerable. Countries can look at the international experience for additional approaches to cost sharing.

To analyze the trends in the level of out-of-pocket spending in these selected countries, we used OECD data and used the OECD method of classification known as a "System of Health Accounts (SHA)" to define out-of-pocket spending to include "cost sharing, self-medication and any other expenditures directly paid by private households, irrespective of whether the contact with the health care system was established by referral or on the patient's own initiative" [7]. We recognize that some of these cost sharing policies were implemented in conjunction with other policy changes; however, for purposes of this analysis, we decided to focus simply on the cost sharing arrangements and the protections from cost sharing that have been implemented.

In 2000 these countries had adopted different approaches to cost sharing; this paper examines three main questions concerning the evolution of their cost sharing programs from 2000 to 2010:

(1) What are the main changes in the level of cost sharing in the three large sectors of the health care industry?

(2) What are the main mechanisms for protecting certain vulnerable groups from increases in cost sharing?

(3) Are countries moving toward convergence in their levels of cost sharing and mechanisms for protecting vulnerable groups?

Policy makers can use this information to determine where each country is on the spectrum of use of cost sharing compared to other countries and also to compare the categories of people that are excluded from most cost sharing provisions.

2. Methods

Data were obtained from the OECD, European Observatory, World Health Organization (WHO) reports, and country-specific reports. The OECD health data presents information on the percent of the GDP allocated to the health sector, the share of revenues coming from private and public insurance, out-of-pocket expenditures, purchasing power parities, hospital bed days and hospital lengths of stay [4,8,9]. These data was supplemented with WHO reports from 2000 to 2005 [10-12], WHO's World Health Reports, and the World Health Statistics from 2005 to 2010 [13]. The reports of the European Observatory were used to identify recent changes in cost sharing and protections of vulnerable groups [14-16]. We also reviewed specific regulations in certain countries [17-22]. All expenditures were adjusted using purchasing power parities.

Because the U.S. health care system is so diverse with so many different cost sharing arrangements, we focused

the U.S. discussion on programmatic changes exclusively on the Medicare program. Medicare is a federally funded national program so it is most comparable to programs in the other countries; however, Medicare only covers people over age 65 or who are disabled or have end stage renal disease. We used the Center for Medicare and Medicaid Services website [18,22-24] to determine changes in cost sharing covered by Medicare [18].

3. Results

3.1. Decade begins

The countries began this decade with varying approaches to cost sharing. France and the UK began this decade with lower levels of cost sharing than the other selected countries. The U.S. health care system had varying level of cost sharing in different insurance programs ranging from virtually nothing in the Medicaid program (program for the poor) to high-deductible health plans in the private sector that required people to pay the first several thousand dollars before insurance coverage began. In 2000, the Medicare program did not even cover prescription drugs for most Medicare beneficiaries. Germany's health system started 2000 with no co-insurance and minimal co-payment for certain services. Japan's health system approach had the highest levels of co-insurance compared to the other countries in 2000.

3.2. Trends in overall out-of-pocket spending

While these countries began the decade with varying levels of out-of-pocket per capita spending on health care, there was some convergence across the countries over the decade. In 2010 the level of per capita out-of-pocket spending varied from a high of $970 in the U.S. to a low of $290 in France (Table 1). Between 2000 and 2010, the largest percentage increase occurred in Germany (87%) and the smallest percentage increase occurred in the U.S. (36%). The percentage of health care resources spent out-of-pocket declined in the UK and the U.S. and increased in the other three countries. In all five countries, out-of-pocket spending from 2000 to 2010 represented an increasing percentage of total household income, with the largest growth in the percentage of household income spent out-of-pocket in Germany (62.4%) and the least in Japan (20.3%).

We now turn our attention to cost sharing in the three major areas of health care spending: pharmaceuticals, inpatient, and outpatient sectors. While there was often a general approach to cost sharing across the three sectors in each country, there were also differences in approach across the three sectors within each country. There were also common approaches within each of the three sectors across the countries.

3.3. Cost sharing and exemptions for pharmaceuticals

Countries adopted different approaches for controlling pharmaceutical expenditures including the following: offering incentives for using generic medicines [14,15], promoting the use of over-the-counter medicines

Comparing changes in out-of-pocket payments in selected countries: 2000-2010.

Year Japan France Germany UK USAb

Per capita total current health care spendinga

2000 $1.898 $2.484 $2573 $1751 $4571

2010 $2979c $3835 $4187 $3253 $7910

Percent increase 2000-2010 57.0% 54.4% 62.7% 85.8% 73.1%

Per capita out-of-pocket spending

2000 $303 $181 $306 $209 $715

2010 $485c $290 $571 $306 $970

Percent increase 2000-2010 60.1% 60.2% 86.6% 46.4% 35.7%

Out-of-pocket as percent of total current expenditures

2000 16.0% 7.3% 11.9% 11.9% 15.6%

2010 16.3% 7.6% 13.6% 9.4% 12.3%

Out-of-pocket spending as a percent of household income

2000 1.7% 0.9% 1.5% 1.0% 2.4%

2010 2.1% 1.2% 2.4% 1.3% 3.3%

Percent increase 2000-2010 20.3% 34.2% 62.4% 29.3% 38.6%

Source: OECD Health Data, Database: Health Expenditure and Financing; Access: 02 May 2013: http://stats.oecd.org.

a Based on International Classification for Health Accounts. Total Current Health Expenditure is divided into 8 categories: (HC.1. Curative care; HC.2. Rehabilitation care; HC.3. Long-term nursing care; HC.4. Ancillary services; HC.5. Medical goods dispensed to out-patients; HC.6. Preventions and public health; HC.7. Administration and health insurance; HC 8 is not recorded; HC.9. Expenditure on services not allocated by function. Total current expenditure will be the total amount for all expenditure categories (HC1-HC9). Adding investment (gross capital formulation in health) becomes total expenditure on health [A System of Health Accounts (SHA 2011)].

b The analysis for US policy changes covers only the Medicare program, but values reported here for the US are for the whole US population. Medicare Expenditure covered 17.4% and 21.3% of Total Current Expenditure for 2000 and 2010 [Center for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group; NHI; 1960-2011]. c Last data available for Japan: 2009.

d Values reported are adjusted for Purchasing Power Parity (PPP) [5].

[14,16], decreasing the number of drugs on the national pharmaceutical list [14], encouraging the use of generic drugs [14-16,25], increasing the use of formularies [16,26], and evaluating certain drugs using cost-effectiveness analysis [27]. These policies often interact with cost sharing changes and are generally considered part of a comprehensive package for pharmaceutical reform. In this section, however, we only focus on the cost sharing component, recognizing that other policies could interact with cost sharing.

Between 2000 and 2010, the most rapid increase in overall pharmaceutical spending occurred in the U.S. (82%) and the slowest in the UK (42%). Japan (21.2%) spent the highest percentage on pharmaceuticals and the lowest percentage occurred in the U.S. (11.9%) in 2010 (Table 2). The percentages spent on pharmaceuticals were generally

stable in the 10-year period. Countries adopted different approaches toward cost sharing and protecting different individuals from cost sharing during the period.

3.3.1. France

Beginning in January 2008, patients in France paid a fixed co-payment of D0.50 for each prescription drug with an annual ceiling of D50 [28]. France also increased the level of cost sharing by 15-35%. The level of increase varied by clinical criteria developed by the Service Medical Rendu (SMR) and Amélioration du Service Médical Rendu (ASMR) [14,28]. Based on SMR, drugs are categorized into 4 categories: major, moderate, low, and insufficient. The Transparency Committee of the French National Health Authority focused on risk or benefit ratio for evaluating the actual medical benefit and rated each drug from low

Table 2

Comparing pharmaceutical expenditures in selected countries: 2000-2010.

France

Germany

Per capita pharmaceutical expenditures (PPP)a

2000 $364 $420 $362

2010 $630c $634 $640

% Change 73.1% 51.0% 76.8% % Pharmaceutical expenditures as a percent of total current health expenditures

2000 19.2% 16.9% 14.1%

2010 21.2%e 16.5% 15.3%f

$260 $369d 41.9%

14.9% 11.3%

$540 $983 82.0%

11.8% 12.4%

Source: OECD Heath Data, last updated 10 August 2012: http://www.oecd.org/health/health-systems/oecdhealthdata2012.htm. a Please see foonote'a'in Table 1.

b The analysis for US policy changes covers only Medicare, but here values reported for US are for the whole US population. c Japan, 2009. d UK, 2008.

e Percentage reported changes between 2000 and 2009. f Percentage reported changes between 2000 and 2008. g Values reported are adjusted for Purchasing Power Parity (PPP) [5].

to major. There are five designed criteria: "effectiveness of drugs and possible side-effects, available alternative therapies, seriousness of condition, curative, preventive or symptomatic priorities of the drugs, and importance in terms of public health" [14,28]. Based on the ASMR, drugs are classified into 5 levels with the first level being a major therapeutic advance, and then important, moderate and minor improvement; the last level is absence of improvement but favorable opinion for registration on the reimbursable drugs list [28]. The pathology of the illness is categorized into two categories: serious and non-serious illness. For drugs in the first category of SMR the reimbursement for serious illness is 65% of the cost and for non-serious illness, 35%; for the other categories, contribution for the other groups are 65%, 85% and 100% [14,28]. Between 2000 and 2006 drugs covered under NHI (National Health Insurance) were re-evaluated by considering Therapeutic Value (SMR), and more than hundreds of drugs were removed from the positive list during the evaluation processes because they did not meet the SMR criteria. In 2010 the rate of cost sharing for 171 drugs with low SMR declined from 35% to 15% [14].

France protected certain people from this increased cost sharing by including 100% reimbursement for non-substitutable or expensive prescription drugs and a cap on annual out-of-pocket payments at D50 [28]. Children under 16 years of age and patients with complementary universal health coverage (Couverture Maladie Universelle Complémentaire, CMU-C) were excluded from any cost sharing3 [28]. France also protected people with 30 defined chronic diseases. Those patients' protection will not be subject of cost sharing if they visited by the physician in sector 14 [29]. Several other groups are also protected from cost sharing: people with work-related accidents, pregnant women after their 5th month of pregnancy, disabled children, and pensioners [14].

3.3.2. Germany

Germany increased the level of cost sharing over this time period and increased the fixed co-payment from D3 in 2000 [9] to D5-10 in 2010 [30]. Germany introduced two main reforms—in 2004, The Statutory Health Insurance (SHI) Modernization Act (GMG) and in 2007 the Statutory Health Insurance Competition Strengthening Act (GKV-WSG)—that increased the co-payment for drugs [31]. The 2004 reform increased cost sharing to 5-10% of the reference price [32] and in 2008 it standardized to 10% of the cost of drugs priced between D50 ($66) and D100 ($130) [33] with a minimum of D5 ($6.5) and a maximum of D10

3 Since 2000, complementary universal health coverage has been offered on a voluntary basis to protect certain socioeconomic groups from the consequences of co-insurance. This plan covers approximately 7% of the population [14].

4 Based on the contract agreements between National Health Insurance and private physicians, physicians are divided into two main sectors:

In sector 1, physicians are under contract and paid fee-for-service and receive pension and sickness benefits; in sector 2, physicians can set their own fees that may exceed the official fee schedule, but the physicians are not eligible for sickness and pension benefits. More than 96% of physicians are in sector 1 or 2. There is a small percentage of physicians who are not in sectors 1 or 2 [29].

($13) per prescription [34,35], plus costs above a reference price (about 7% of drugs) [30,35]. Drugs priced 30% below their reference price were exempted from co-payments [36].

Several regulations were designed to protect certain individuals from the cost-sharing including exempting children less than 18 years of age, low-income groups, and individuals with chronic diseases. Germany also established limits on out-of-pocket payments in 2004. People who do not have chronic conditions do not have to pay more than 2% of the gross annual household income; for people with chronic diseases, this amount is 1% [25,31].

3.3.3. Japan

Between 2002 and 2006, reforms in Japan's health system raised the level of co-payment to 30% [37]. The current rate remained at 30% for most individuals; however, for children less than 7 years of age, the co-payment was reduced to 20%. People who are >70 years of age and have incomes less than the average worker pay a 10% co-payment. The level of cost sharing is a combination of co-payment and includes a consideration of the number of drugs prescribed: zero for one drug and $0.85 for six or more drugs prescribed for drugs that are taken internally and $0.4 (for one) $1.2 (for three) prescribed for topical use [9]. In addition, all insurance plans have a monthly out-of-pocket ceiling5 [33] of $1903 (150,000 yen) for high-income people and $449 (35,400 yen) for low-income people; above this ceiling only 1% of co-payment applied. Low-income people covered by the Livelihood Protection program do not pay co-insurance [15].

3.3.4. United Kingdom

In 2000 only 14% of prescriptions were subject to cost sharing [16,38]. In 2000 [9] a fixed amount for these drugs was $9 per prescription, which increased to $11.3 in 2010 (£7.2 per item from 1 April 2010). The percentage of prescriptions subject to cost sharing has declined and in 2009 only 6% of all prescription items were subject to cost sharing In spite of this increased level of coverage, out-of-pocket payment per capita increased from £133 in 1998 to £230 in 2008 (72% growth) [18].

Although the UK has a limited number of drugs subject to cost sharing, the UK still [16] protects around 50% of the population from cost sharing, including children under 16 years of age, full-time students 16-19 years, pregnant women and women who have given birth during the past 12 months, people >60 years of age, people with specific medical conditions (e.g., cancers and long-term conditions), low-income groups, and those who use a large number of drugs [39,40].

3.3.5. United States

Because the U.S. has so many different insurance systems, we focused just on the Medicare program. Medicare covers people over age 65, people with disabilities and those with end stage renal disease. It should be recognized that most Medicare beneficiaries purchase supplemental

5 This out-of-pocket ceiling applies generally not just for drugs.

Catastrophic Coverage 5%

No Coverage $3610 coverage gap

Partial Coverage Up to limit 25%

Deductible Premium $310 per year

Out-of-Pocket □ Medicare Part D BenefitD

Notes:

1) The Maximum Out-of-Pocket Costs Prior to Catastrophic Cap is: $310 (Deductible) + (($2830-$310)*25%) (Initial Coverage) + (($6440-$2830)*100%) (Coverage. Gap) = $4,500. This excludes plan premium.

2) Annual premium for 2010oin average is $360. In some situations it can be increased for high-income groups and for late payment. In some Medicare Advantage plans (HMOs and PPOs) the monthly premium may be covered for prescription drugs [18].

Fig. 1. Medicare part D cost sharing in 2010.

Medicare coverage known as Medigap which pays some or all of the cost sharing [41,42]. There are twelve standardized individual polices, labeled A through L, that private insurers can offer to Medicare beneficiaries. The rationale for having standardized policies is to make it easier for Medicare beneficiaries to compare Medigap plans. The plans differ on the scope of the benefit package they offer, with some of the plans covering all the cost sharing [47].

The Medicare program added prescription drug coverage in 2003 with implementation occurring in 2005 [18]. Medicare prescription drug coverage is provided by private health plans that can vary their level of cost sharing. There is, however, a standard plan and that is what we will discuss. The standard prescription drug benefit in the Medicare program is shown in Fig. 1 [23]. There are three levels of cost sharing depending on how much the Medicare beneficiary spent on drugs during the year. There is an annual deductible of $310. Cost sharing begins after the deductible is paid and begins at 25%, goes to 100% (no coverage), and then reverts back to 5%. The Patient Protection and Affordable Care Act [43] revises the cost sharing arrangements and over the 2011-2020 period the cost sharing will become 25% for all drugs until the out-of-pocket threshold is reached, when it becomes 5% [24]. Unlike most other countries, Medicare does not have an out-of-pocket cap. Low-income individuals do not have to pay the cost sharing amounts if they qualify for the Medicaid program [18,23,24].

3.4. Cost sharing and exemptions for inpatient services

Countries have adopted many different approaches for controlling inpatient spending: developing pay-for-performance [14,15,25], payment by results [16], controlling the rate of readmissions; reducing acute care capacity, developing day surgery centers and home hospitalization, and moving toward DRG based prospective payment systems [14,15,25]. Some countries have expanded the use of private sector hospitals [16] or used referral [16,25], or gate-keeping systems [16] to control utilization of inpatient services [14,25]. In this section, however, we only focus on the cost sharing provisions.

Table 3 shows changes in out-of-pocket spending for hospitals. Per capita spending on hospitals was significantly higher in the U.S. but out-of-pocket spending was within the range of the other countries. Japan had the highest out-of-pocket spending in both 2000 and 2010.

3.4.1. France

France maintained the level of co-insurance for inpatient services at 20% from 2000 to 2010, and increased the co-payment from D 10.67 in 2000 [26] to D16-D20 in 2010 [14]. France protected several groups from cost sharing for hospital services; people with 30 specific long-term illnesses as well as other rare diseases that are not listed in the 30 disease list are excluded from cost sharing. There is also no cost sharing after the 31st day of hospitalization. Pregnant women hospitalized during the last four months

Table 3

Hospital expenditures3 and out-of-pocket payments in selected countries: 2000-2010.

Year Japan France Germany UKc USAd

Per capita hospital expenditure (PPP)b

2000 $967 $898 $800 NA $1473

2010 $1431d $1357 $1245 NA $2634

% Change 48.0% 51.1% 55.6% NA 78.8%

Per-capita out-of-pocket payment (PPPb)

2000 $93 $24e $20 NA $58e

2010 $164f $37 $37 NA $84

% Change 76.3% 54.2% 85.0% NA 44.8%

Source: OECD Heath Data, last updated 10 August 2012: OECD Health Data, Database: Health Expenditure and Financing; Access: 02 May 2013: http://stats.oecd.org.

a Hospital expenditure covered value of health services provided by hospitals based on OECD SHA Manual HP.1. Categories of health care provider costs covered hospital expenditures [A System of Health Accounts (SHA 2011)]. b Purchasing power parity (PPP). c The UK does not report these data to the OECD.

d The analysis for US policy changes covers only Medicare, but here values reported for US are for the whole US population. e France, 2003; USA, 2003. f Japan, 2009.

of pregnancy or 12 days after childbirth do not pay any cost sharing [14]. Low-income people covered by the Universal Health Insurance Law, disabled children and pensioners are also excluded [14]. In 2006 people were required to pay a flat rate of D18 for expensive care such as magnetic resonance imaging (MRI) and some surgical procedures with a relative weight higher than an appendectomy, but these people did not need to pay this flat rate and, if they purchased voluntary health insurance, it would cover the flat rate. Services with tariff over D 91 (any procedure with a relative weight higher than an appendectomy) were not subject to cost sharing [14].

3.4.2. Germany

In 2010 Germany increased the level of cost sharing from D3 in 2000 [9] to D10 per inpatient day [25,30]. Germany has protected the following people from increased cost sharing: co-payment for hospitalizations after 28 days [44], pregnant women, children less than 18 years of age [44], and individuals are excluded from cost sharing if they spent annually more than 2% of their gross household income on cost sharing, or 1% of their gross household income if they have a serious chronic disease [25] or lost 60% of their capacity to work [25,44]. Certain chronic diseases as defined by the Ministry of Health [30] also have reduced cost sharing.

3.4.3. Japan

Japan increased the level of cost sharing from 20% in 2000 to 30% in 2010 [15]. Japan has protected certain people from increased cost sharing by exempting certain categories of people. Since 2003, people >75 years and children below 3 years had their rate lowered to 20%. The rate is 10% for low and moderate income people >75 years of age and 20% for high-income persons above age 75 [15]. Rates for people 65-74 increased to 30% in 2008 and cost sharing was reduced for certain low-income individuals [15]. For example, Japan excludes people from cost sharing if they have one of 56 chronic diseases and who participate in research studies [19].

3.4.4. United Kingdom

Almost all of the covered inpatient health services operate without cost sharing [30]. The NHS also covers services that limit access to necessary medical care. For example, coverage without cost sharing may be available for travels to receive consultant services under coverage of NHS, depending on age or medical need [16,45].

3.4.5. United States

In the Medicare program, the level of cost sharing has continually increased with the hospital deductible increasing from $776 in 2000 to $1112 in 2010 [18]. Co-insurance after 60 days and before 90 days increased from $194/day in 2000 to $275/day in 2010, and co-insurance for 60 lifetime reserve days increased from $388/day to $550/day [22].

The federal government has many different programs for protecting beneficiaries from these increases and almost 90% of Medicare beneficiaries have some form of public or private coverage that covers their cost sharing [46]. These include Government Programs (Medicaid/QMB/SLMB), Group Retirement Policies (Non-Standardized), Non-Standardized Individual Medigap Policies, and Standardized Individual Medigap Policies [41,42].

In the standardized individual Medigap polices there is variation in what out-of-pocket services are covered. Plan A contains only basic benefits and other plans contain the basic benefits and one or more additional benefits. For example, plan K covers all cost sharing for hospital services once an individual has reached annual out-of-pocket limit expenditures of $4620 in 2010 [42].

There are several exemptions for low-income groups; if the person has Medicaid coverage, the Medicaid program covers the co-insurance amount. The states determine who is eligible for Medicaid coverage so the level of protection varies from state to state. The Tax Relief and Health Care Act of 2006 (TRHCA) limits the cost sharing and premium to 5% of family income for Medicaid beneficiaries [48].

3.5. Cost sharing and for providers of ambulatory care

Countries have adopted different mechanisms for decreasing the cost of ambulatory care. These include

Comparing per capita ambulatory care expenditures3 in selected countries: 2000-2010.

Japan France Germany UKc USA

Per capita ambulatory care expendituresb

2000 $549 $677 $756 NA $1712

2010 $810d $1082 $1278 NA $2851

% Change 47.5% 59.8% 69.0% NA 66.5%

Per capita out-of-pocket payment (PPPa)

2000 $93 $71e $73 NA $329f

2010 $136g $110 $167 NA $396

% Change 46.2% 54.9% 128.8% NA 20.4%

Source: OECD Heath Data, last updated 10 August 2012: OECD Health Data, Database: Health Expenditure and Financing; Access: 02 May 2013: http://stats.oecd.org. a Values reported by international dollar (Purchasing power parity; PPP).

b Based on OECD SHA Manual, these institutions provide health care services directly to out-patients who do not require in-patient services. Pediatric and geriatric conditions except for services provided by health practitioners in ambulatory health care [A System of Health Accounts (SHA 2011)]. c The UK does not report these data to the OECD. d Japan, 2009. e France, 2003. f USA, 2003. g Japan, 2009.

developing pay-for-performance systems [14,25] which promote direct negotiations between providers and insurers [14,15,25], designating certain doctors as the first point of contact in health networks [14]; using patient-centered medical homes [30]; implementing lifelong learning for general practitioners (GPs) [14]; paying bonuses for meeting specified performance targets [16]; using referral systems; having waiting time for controlling access to specialist services [16,25]; developing highly specialized hospital outpatient clinics; providing ambulatory surgery [25]; and substituting nurses for physicians to provide certain services [4,14-16,25]. We will again focus only on cost sharing provisions in these selected countries.

In 2010, the level of per capita out-of-pocket spending for ambulatory care varied from $396 in the US and $110 in France (Table 4). Between 2000 and 2010, the largest annual percentage increase occurred in Germany (12.9%) and the smallest percentage increase occurred in the US (3.4%). Table 4 provides the changes in outpatient services between 2000 and 2010, based on the System of Health Accounts (SHA) classification for outpatient services that includes physician's private offices, hospital out-patient centers or ambulatory-care centers.

3.5.1. France

France did not change the co-insurance rate for GPs and specialists from 2000 to 2010; it remained at 30%, but it added a flat rate co-payment of D18 in 2006 [14,30]. Since 2005, on every physician visit, biological test, or radiology procedure, D 1 is charged with a ceiling of D 4 per day and D50 per year. In early 2008 patients requiring transportation for ancillary care services paid D 2 for the services up to D 50 for the year and after that no payment was needed [14].

France has protected certain people by exempting certain individuals from cost sharing. Exams conducted during pregnancy, flu vaccines for people over 65 years, MMR vaccines for children less than 13 years of age and some forms of cancer screening are exempted from cost sharing [44]. There is also a maximum out-of-pocket payment for outpatient services provided by doctors, medical auxiliaries,

or laboratories. If the tariff is more than D91, there is no cost sharing [14]. In recent years approximately 88% of the French population purchases Voluntary Health Insurance (VHI). This supplemental insurance coverage fills the gap between what NHI pays and the total bill or pays for some medical goods and services that are not covered or have poor coverage under NHI. These supplemental insurances usually provide full coverage for patient's copayment for medical tests, health professionals' up to official NHI tariff [14,22]. Because of VHI most of coinsurance paid by patients is reimbursed by the supplemental health insurance.

3.5.2. Germany

The reform in 2004 (Statutory Health Insurance Modernization Act [GMG]) introduced D10 user fees for first visits to an outpatient provider and for visits for any other physician in the same quarter except by referral [31]. Germany has protected certain people from this increased cost sharing including: pregnant women, children and adolescents up to 18 years of age [44]. Certain services are also exempt from cost sharing for specific services such as preventive care [31,44].

3.5.3. Japan

Japan increased the level of cost sharing from 20% in 2000 to 30% in 2010 for all ambulatory services [15]. Japan protected certain people from these increases: Children less than 3 years of age pay only a 10% co-payment; people over 74 years of age have co-insurance of 10% for low- and middle-income individuals and 20% for high-income individuals. There is also a maximum of 10,000 yen (approximately US$127) per month for patients undergoing renal dialysis [15].

3.5.4. United Kingdom

Although most ambulatory services are free-of-charge, some services are not covered by the NHS [16]. For some of these services there is financial assistance for some individuals[16]. For example, ophthalmic services are not available in NHS facilities, but vision tests, cost of glasses

Comparing groups excluded from cost sharing payments in selected countries.

Country Pharmaceuticals

Outpatient care

Inpatient care

France (a) Cap on annual out-of-pocket payments at €50

(b) Children under 16 years

(c) Patients with complementary universal health coverage

(d) People with 30 defined chronic diseases

(e) People with work related accidents

(f) Pregnant women after their 5th month of pregnancy

(g) Disabled children and pensioners

Germany (a) Cap on gross annual household income 1% for people with chronic disease and 2% for all other

(b) Children less than 18 years

(b) Low-income groups

(c) Individuals with chronic diseases

Japan (a) Cap based on income (a) 10% less

co-payment for children under 7 years old

(b) 20% less co-payment for elderly people with 70 years old and over

(c) Considering the co-payment and number of drug for cost sharing: Zero for one drug, $0.85 for 6 and more certain categories of drugs, $0.4 (one) and 1.2 (three) for other categories of drugs

UK 86% of drugs are free of charge. For the

other drugs the following groups are excluded:

(a) Children under 16 years

(b) Full time students 16-19 years

(c) Pregnant women

(d) Women who have given birth during the past 12 months.

(e) People aged 60 years and above

(f) People with specific medical conditions

(g) Low-income groups

(h) People with large number of drugs

USA (a) Cost sharing decreased to 5% after

$6440 cap

(b) Low-income groups eligible for Medicaid

(c) Some of the privately purchased Medigap plans (plans G and J) coverall of the out-of-pocket payments

(a) Pregnant women for exams during pregnancy

(b) Flu vaccines for people over 65 years

(c) MMR vaccines for children less than 13 years

(d) Some forms of cancer screening

(e) Cap for tariffs more than $91

(f) More than 88% of people have Voluntary Health Insurance (VHI). VHI provides coverage by filling gap between NHI and overall cost

(a) Pregnant women

(b) Children and adolescents up to 18 years

(c) Certain groups for preventive care

(a) Children less than 3 years pay 10%

(b) People over 74 years old pay 10% if they are in low-income level and 20% in high-income level

(c) Cap 10,000 yen (US$127) per month for renal diseases

Most ambulatory services are free-of-charge. For services not covered by NHS individuals requiring a vision test, cost of glasses and contact lenses who are in these categories are covered (a) Children under 16 years full-time students 16-19 years, people aged 60 years and older, low-income groups, people with diabetes or people who have or at risk of glaucoma

(a) Medigap provides some or all of the cost sharing based on the plan

(b) Low-income eligible people for Medicaid

(a) Cap for payment after 31st day of hospitalization

(b) Pregnant woman in last 4 months of pregnancy

(c) Low-income people covered by Universal Health Insurance Law

(d) Disabled children and pensioners

(e) Services with tariff over D 91

(f) VHI covers all of the co-payments

(a) Cap for payment after 28th day of hospitalization

(b) Pregnant women

(c) Children less than 18 years old

(d) Cap on gross annual household income 1% for people with chronic disease and 2% for all other or people who lost 60% of their capacity to work

(f) Certain chronic diseases

All of the groups need to pay co-payment. Certain groups have lower coinsurance amounts:

(a) People 75 years old or above 10%

(b) Children below 3 years old 10%

(c) Low and moderate income people with 75 years or above 10% and high income persons above age 75-20%

(d) People with 56 chronic diseases that participate in research studies

(a) Free-of-charge in point of service plans in NHS centers

(a) Low-income groups with Medicaid eligibility under the state rules

(b) Some Medigap plans cover some or all of the cost sharing

(c) Children under age 18 are covered by Medicaid except up to 20% cost sharing for some drugs

(d) Cap for cost sharing and premium for 5% offamily income

Source: OECD, WHO, Medicare, European Observatory sites.

and contact lenses for children under 16 years of age, fulltime students 16-19 years of age, people >60 years of age, low-income groups, people with diabetes, or people who have or at risk of glaucoma are covered [16,30].

3.5.5. United States

In the Medicare program the level of cost sharing has not increased, but the deductible has increased from $100 in 2000 to $162 in 2010 [18]. As mentioned earlier, many people purchase Medigap coverage privately or get public assistance that pays their cost sharing. In the U.S., low-income people covered by the Medicaid program are generally exempt from Medicare cost sharing; however, the rules vary by state.

4. Discussion

All of the selected countries have experienced increases in the level of cost sharing for one, two, or all three services during the 2000-2010 period. At the same time, the percentage of total out-of-pocket spending as a percentage of total health expenditures has declined. One main reason is that the countries have eliminated cost sharing for some specific groups. While each country has taken its approach, there appears to be similar approaches to cost sharing, similar approaches to protecting people from cost sharing, and a general trend toward convergence of the cost sharing systems.

Pharmaceutical services: There is considerable commonality across the countries. In all of selected countries the levels of cost sharing have increased, with fixed payment for each prescription the most common way for increasing the level of cost sharing. Clinical effectiveness criteria are commonly used for determining the level of cost sharing [33] or making the person pay entirely out-of-pocket for inefficient drugs [49]. Countries have protected certain people from high drug costs by capping their out-of-pocket payments [14,15,35] orby exempting or reducing the level of cost sharing for low-income groups, children, people with specific chronic diseases, pregnant women, and older people [14-16,18,25].

Inpatient services: In each of the selected countries (except for the UK, which still does not have any cost sharing), cost sharing for inpatient services increased during the 2000-2010 period. Generally, the level of cost sharing for hospital services represents a small percentage of the total cost compared to other health care services. The most common approach is protecting individuals from any type of hospital cost sharing to exclude low-income persons, the elderly, and people with selected chronic diseases, pregnant women, and children. Another approach is to cap out-of-pocket payments and reduce cost sharing for long-term hospital stays.

Outpatient care: In all of the selected countries, cost sharing for ambulatory costs increased from 2000 to 2010, with increasing the co-payment rate or deductibles as the most common way of implementing this change. Countries have tried to protect special groups from this increased cost sharing by defining out-of-pocket maximums or by protecting certain defined groups of people.The most common

exclusions are children, people in certain age bands, and pregnant women.

4.1. Are countries moving toward convergence?

In Table 5 we compared all of exclusions for these three health expenditure sub-groups in the selected countries.

While the countries began the 21st century with very different approaches to cost sharing, they are converging both in their approaches to cost sharing and their protection for people from cost sharing. While most counties are increasing the level of cost sharing, the highest rates of increase tend to be in countries that began the decade with the lowest rates of cost sharing. However, there is only minimal convergence on the percentage of the total bill that a person has to pay or exactly how cost sharing should be structured. Each country seems to retain their own philosophy about cost sharing in spite of a general approach of increasing the level of cost sharing. There is considerably more consensus on who should be excluded from cost sharing. The groups most commonly excluded from cost sharing include people with chronic conditions, people in certain age groups, low-income groups, and pregnant women.

4.1.1. Implications for policy

When out-of-pocket spending increased during the 2000-2010 period, policy makers initiated plans to protect vulnerable groups or services commonly used by these groups. Among international policymakers, spending more than 10% [50] of total expenditures on health care is often considered as a threshold for catastrophic payment. Countries should examine what other countries are doing in terms of cost sharing arrangements and protections. Countries need to evaluate their level of cost sharing in relation to their overall health care programs and how they are organized in relation to other industrialized countries. Countries with limited cost sharing should examine whether certain types of cost sharing could be increased without adversely impacting access. This needs to be done in conjunction with efforts to protect certain groups that may have greater levels of financial burden or are more likely to use health care services because of medical need. Countries can learn from the experiences of other countries while still maintaining their own unique health care systems.

Conflicts of interest

There are no sponsors or conflicts of interests. Acknowledgement

This research paper was conducted at the Health Policy and Management Department, Johns Hopkins Bloomberg School of Public Health.

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