Deductibles and other forms of cost-sharing have been creeping up in the United States since the late 1990s. A typical employer health plan now asks an individual to pay more than $1,000 out of pocket before coverage kicks in for most services. The most popular plans on the Affordable Care Act exchanges require customers to pay several times as much. Even Medicare charges deductibles.
People tend to hate these features, but they were not devised to be cruel. Rather, they were fashioned with economic theory in mind. Deductibles and co-payments are intended to make patients behave more like consumers in other parts of the economy.
New research suggests that high deductibles in particular may not work as intended. A team of researchers at the University of California, Berkeley, and Harvard recently published a working paper on what happened when a large (unnamed) employer switched from a more generous health plan to one with a high deductible.
Spending fell by about 12%, a remarkable decline. But the way workers achieved those savings gave the researchers pause. There was no evidence that workers were comparing prices or making wise choices on where to cut, even after two years in the new plan. They visited the same doctors and hospitals they always had.