USER FEES AND COST-SHARING

IN OECD COUNTRIES

3rd Annual Meeting of the Joint Network on Fiscal Sustainability of Health Systems Paris, OECD, 25 April 2014

Organisation of health care coverage

Main source of basic health care coverage

Countries

Tax-funded health system

Australia, Canada, Denmark, Finland, Iceland, Ireland, Italy, New Zealand, Norway, Portugal, Spain, Sweden, United Kingdom

Health insurance system

Single payer Greece, Korea, Luxembourg, Poland, Slovenia, Turkey, Hungary

Multiple insurers, with automatic affiliation

Austria, Belgium, France, Japan

Multiple insurers, with choice of insurer

Chile, Czech Republic, Germany, Israel, Mexico, the Netherlands, Slovak Republic, Switzerland, United States

Section 4. Comprehensiveness of basic health care coverage

Section 4 aims to assess the level of basic health care coverage to which “typical”

working-age adults are entitled to. Responses should not consider children, seniors

and other categories of population which may be entitled to higher levels of benefits

(e.g. people with serious illnesses). In countries with multiple insurers allowed to offer

different levels of benefits, responses should refer to the most frequent or most typical

situation.

Question 13. Is there a general deductible* that must be met before basic health

coverage pays a share of the cost or the full cost of covered services?

□ Yes

If so, what is the amount of the deductible that must be met before basic primary

health coverage pays/reimburses? (national currency units) ______

What is the period in which the deductible applies (e.g. year, lifetime, episode of illness,

etc.)?

□ No

Information collected in the Health Systems

Characteristics survey

Information collected in the Health

Systems Characteristics survey

Outpatient primary

care physician*

contacts

Examples:

- Free at the point of care;

- Copayment of €2 per visit;

- Copayment of €10 for the first of each semester;

- Co-insurance of 20%;

- Not reimbursed if not referred

Pharmaceuticals Examples:

- Copayment per prescription item ($5 for generics and $20-25 for brandname

drugs);

- Cost-sharing: 10% of cost with a min of €5 and a max of 10€ per item;

- Cost-sharing of 0%, 35%, 65% or 85% depending on drug category + €0.50

per item

- Deductible of SEK 900 beyond which cost-sharing diminishes by step as

spending increases (from 50%, 25%, 10% and 0%).

- Any difference between actual price and reference price for medicines subject

to reference price

Question 14. Are patients required to share the costs of health care for the

services and goods listed below?

Please indicate the type and level of cost-sharing left at the charge of users by basic

primary health coverage, in the case of an adult with no specific exemption of user

charge. If there is no cost-sharing, please indicate "no cost-sharing".

Different types of cost-sharing

Co-insurance: cost-sharing requirement whereby the insured person pays a share of the

cost of the medical service (e.g. 10%).

Copayment: fixed sum (e.g. USD 15) paid by an insured individual for the consumption

of itemized health care services (e.g. per hospital day, per prescription item). User fee,

prescription fee sometimes used as synonymous.

Deductible: lump sum threshold below which an insured person must pay out-of-pocket

for health care before insurance coverage begins. It is defined for a specific period of

time: one year, one quarter or one month. Deductibles can apply to a specific category of

care (e.g. physicians’ visits, pharmaceutical spending) or to all health expenditures

(general deductible).

Extra-billing: refers to any difference between the price charged and the price used as a

basis for reimbursement purpose. In the pharmaceutical sector, where “reference prices”

are often used, a fixed reimbursement amount is determined for a cluster of products,

while sellers remain free to set a higher price. The patient pays out-of-pocket any

difference between the price of a medicine and the reference price.

Out-of-pocket payments

(System of health account)

Spending by people without health

coverage

Cost-sharing for health care goods

and services which are partially covered

Cost-sharing and user charges left by basic

health coverage

(potentially covered by PHI in some countries)

+

Potential extra-billing

Payment for goods and services which

are not covered

Informal payments

User fees and cost-sharing: what are we talking about?

From « entitlements » to actual coverage

Entitlements: Who is covered? for what (benefit basket)? At what level? (with or without cost-sharing)

Health spending level and financing structure

Availability of health care supply

Affordability of health care services and goods

Cost-sharing exemptions and caps

• Canada and Hungary indicated that patients can access primary care services for free.

• Japan indicated a 30% co-insurance rate for these services.

• The share of PHI and OOP payments in spending for basic medical and diagnostic care is:

Examples

0%

10%

20%

30%

40%

50%

Canada Hungary Japan

OOP

PHI

User charges: where are we?

Cost-sharing on outpatient

medical care Primary care Specialised care Free of charge for all Canada, Denmark, Hungary, Italy,

Poland, United Kingdom

Canada, Denmark, Hungary, New Zealand,

Poland, Spain, United Kingdom

Free of charge for some Australia (≈80% of GP services)

Chile (public-public)

Germany (SHI-85% pop)

Greece (public provider)

Ireland (40% of pop)

Mexico (public-public)

Australia,

Germany (SHI)

Greece (public providers),

Ireland (public-public)

Mexico (public-public)

Deductible Austria (specific)

Netherlands (general)

Austria, Israel (specific)

Netherlands (general)

Copayment Belgium, Czech Republic, Finland,

Iceland, Israel

Belgium, Czech Republic, Finland, Italy,

Portugal

Co-insurance Chile (provider choice)

Japan, Korea, Luxembourg

Chile, Japan, Korea, Luxembourg,

Slovenia

Copayment+co-insurance France France, Iceland

Deductible + co-insurance Switzerland Switzerland

Full price Ireland (60% of pop)

• Inpatient care is more often free of charge or only subject to small daily copayments, except in a few countries with co-insurance rates (France, Japan, Korea, etc)

• In a few countries, inpatient care is free for patients admitted as public patients in public hospital but subject to copayments for patients admitted as private patients (Australia, Italy)

• User charges are the common rule for pharmaceuticals, with a few exceptions. They most often take the form of co-insurance (with differentiated rates) or fixed prescription charges. Several countries also have deductibles

User charges: where are we?

Chronically ill

and/or disabled Low-income

Entitled to

social

benefits

Seniors Children Pregnant

women

Beyond an

absolute cap on

cost-sharing

Beyond a

cap related to

income

Australia

Austria

Belgium

Canada

Chile

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Israel

Italy

Japan

Korea

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Slovenia

Spain

Sweden

Switzerland

United Kingdom

Reductions or exemptions of copayments for specific population

Note:

Source: OECD Health Statistics 2013

What do patients pay for?

Shares of out-of-pocket medical spending by services and

goods, 2011 (or nearest year)

• They can potentially increase revenues to finance health care

• They can potentially reduce excessive demand for health care (moral hazard), i.e. reduce spending related to this fraction of demand

Arguments in favour of cost-sharing

• More than 130 studies on the impact of copayments on pharmaceutical consumption:

– They reduce the consumption of non-essential but also essential medicines

– The impact on health is not well evaluated… but what are « essential medicines » if we can live without them without any impact on health?

– Short term impact on spending

• Studies on other types of care (physicians visits, emergency, etc)

– Reduction in utilisation in some cases, sometimes only temporary

– Substitutions with other types of care is not well known

– The impact on total spending in not well known

Arguments against copayments: impact on demand,

spending and health

• Copayments target patients while more than 4/5 of spending is generated by physicians’ prescriptions. Do we think patients are better placed to make clinical decisions? Do we want these decisions to be influenced by ability to pay?

• Copayments are inequitable

– “Tax on the ill seeking care”

– They disproportionally affect low-income population

• Copayments generate administration costs

• Copayments are politically difficult to introduce, relatively easy to increase

• Copayments are limited in their capacity to raise resources because of concentration of spending

Arguments against copayments

• Make sure they are based on value and provide appropriate incentives

– Incentives to use cheaper alternatives where available ( Reference prices for medicines, Differentiated copayments)

– Remove copayments from cost-effective treatments you want people to take and comply with

– Use them to encourage virtuous patient’s pathways, use of medical records (France, Belgium)

– Present lower copayments as a bonus rather than higher copayments as a penalty

• Protect low-income groups against copayments

• Do not neglect alternative measures such as HTA-based updating of the benefit package, promotion of self-care (including access to OTC medicines).

If you really want to keep or introduce cost-sharing