The NEJM had an interesting study this month on managing health care expenditures.  The prevailing wisdom has been that cost-sharing (making people more reponsible for the cost of their care) reduces expenditures while not harming health in the general population.  This study looked at a population of Medicare recipients and found otherwise.

When you raise the copays for Medicare enrollees, you end up making a little more money off of copays, and you reduce the total number outpatient visits.  This saves Medicare money.  This is good.  Unfortunately, you also increase the number of hospital admissions and the length of those admissions, with the end result being that you spend much more money than you save or bring in.  This is bad.

This is a prime example of why studies like this are crucial when deciding how to spend healthcare dollars.  The interplay of economics, health, and human behavior are so complex that there’s no predicting which way an intervention will take you.  Great study.