Cost Sharing for Emergency Surgical Conditions—The Moral, Clinical, and Financial Hazards

Abstract

The fundamental purpose of health insurance is to reduce risk against potential financial losses incurred owing to health care use. It is well established that consumers use more of both high and low value medical services when their insurance plans allow them to pay less out of pocket. This tendency means that overly generous health insurance will lead some patients to consume unnecessary care—the so-called moral hazard of health insurance coverage.1 The primary aim of cost sharing in the form of deductibles, co-insurance, and copayments is to reduce this moral hazard by shifting more of the point-of-care costs of health care use to patients. However, there are significant unintended consequences of using moral hazard as a justification for “blunt” cost-sharing strategies, such as deductibles that necessitate high out-of-pocket costs for both nonessential and essential clinical services. In the case of emergency surgical disease or acute traumatic injuries, individuals would not be driven to overconsume surgery if their out-of-pocket expenses were eliminated. As a result, consumer cost sharing likely has minimal effect on reducing the moral hazard of unnecessary health care use for common and costly conditions, such as acute appendicitis or acute diverticulitis. Instead, the potential hazards associated with increased cost sharing for emergency surgical conditions are more complex clinical presentation and worse financial strain for patients. The finding by Loehrer and colleagues2 of a significant association between cost sharing and patient presentation for emergency surgical conditions suggests that cost sharing is not only hazardous to patients’ clinical health but also to their financial well-being. Specifically, their findings show that individuals with higher cost sharing were more likely to present with more complex acute surgical disease than those with lower cost sharing. The higher out-of-pocket spending among these patients presenting with more complex disease highlights the double burden of cost sharing for access-sensitive conditions. This double jeopardy functions to considerably reduce overall quality of life because worse disease may lead to longer recovery, a slower return to work, a higher risk of lost income, and a higher risk of unaffordable medical debt. This is an all-too-common outcome in the United States, where significant out-of-pocket spending for medical care may be catastrophic for millions of individuals. A recent analysis of the Medical Expenditures Panel Survey showed that the Affordable Care Act resulted in 2 million fewer individuals experiencing catastrophic health care spending.3 However, these gains were due to a decrease in the number of uninsured individuals and to the majority of the nearly 12 million individuals who continue to experience catastrophic health care expenditures each year having private health insurance.3 The findings by Loehrer and colleagues2 also add important nuance to our understanding of the association between insurance coverage and clinical disease complexity at presentation. Analyses of the Affordable Care Act’s expansion of Medicaid eligibility have repeatedly shown that decreases in the uninsured rate were associated with more timely presentation across a variety of diseases ranging from earlier stage of cancer presentation to less complex presentation for emergency surgical and acute vascular conditions.4 In previous studies, however, it is difficult to determine whether earlier presentation is due to gains in access to ambulatory care or due to a reduction in patients’ delaying care owing to an inability to pay. The finding by Loehrer and colleagues that patients with higher cost sharing are more likely to present with more complex disease suggests that affordability concerns are likely a key factor associated with more complex disease at presentation + Related article