I Pay, You Pay, Variable Co-Pay
The Next Generation of Health Insurance Design

One tool to mitigate health-care spending is increased cost sharing, which requires that patients pay a larger portion of the cost of a physician office visit, a hospitalization, or a prescription. According to the Kaiser Family Foundation, consumer co-pays for physician visits and prescription drugs have been rising rapidly. While making out-of-pocket payments for substantive health services may both reduce the likelihood of unnecessary health services and save money, it may also increase the chance that a patient chooses not to fill an important prescription.

Is there a better approach than across-the-board increases in cost sharing? Can plans be designed effectively with cost-sharing structures that vary based on medical evidence of cost-effectiveness? Would such a change lead to better outcomes, lower costs, both, or neither? What can public health programs learn from the private-sector health insurance experience with cost sharing?

A. Mark Fendrick, M.D., co-director of the Center for Value-Based Insurance Design at the University of Michigan, and Mark Cullen, M.D., professor at Yale University School of Medicine and medical director for Alcoa, will each present recent research on the effects of variable or differential cost sharing. Mark V. Pauly, an economist at the University of Pennsylvania, and AEI visiting fellow Bill Thomas, former chairman of the House Ways and Means Committee will discuss this research from economic and political perspectives. Alex Brill, a research fellow at AEI, will moderate. The conference will begin with opening remarks by Peter R. Orszag, director of the Congressional Budget Office, who will discuss evidence on comparative effectiveness of medical treatment.

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About the Author

 

Bill
Thomas
  • Bill Thomas, a former chairman of the House Ways and Means Committee, served in the U.S. House of Representatives from 1978 to 2007. During his six-year chairmanship, he guided the enactment of $2 trillion in tax relief, including the Economic Growth and Tax Reconciliation Act of 2001, which reduced all ordinary income tax rates; the Jobs and Growth Tax Reconciliation Act of 2003, which reduced the tax rate on dividends and capital gains; and the Job Creation Act of 2004, which provided significant reforms for corporate tax policy.
  • Phone: 2028625830
    Email: bill.thomas@aei.org

 

Alex
Brill
  • Alex Brill is a research fellow at the American Enterprise Institute (AEI), where he studies the impact of tax policy on the US economy as well as the fiscal, economic, and political consequences of tax, budget, health care, retirement security, and trade policies. He also works on health care reform, pharmaceutical spending and drug innovation, and unemployment insurance reform. Brill is the author of a pro-growth proposal to reduce the corporate tax rate to 25 percent, and “The Real Tax Burden: More than Dollars and Cents” (2011), coauthored with Alan D. Viard. He has testified numerous times before Congress on tax policy, labor markets and unemployment insurance, Social Security reform, fiscal stimulus, the manufacturing sector, and biologic drug competition.

    Before joining AEI, Brill served as the policy director and chief economist of the House Ways and Means Committee. Previously, he served on the staff of the White House Council of Economic Advisers. He has also served on the staff of the President's Fiscal Commission (Simpson-Bowles) and the Republican Platform Committee (2008).

    Brill has an M.A. in mathematical finance from Boston University and a B.A. in economics from Tufts University.

  • Phone: 202-862-5931
    Email: alex.brill@aei.org
  • Assistant Info

    Name: Brittany Pineros
    Phone: 202-862-5926
    Email: brittany.pineros@aei.org

 

Mark V.
Pauly

  • Mark V. Pauly is the Bendheim Professor in the Department of Health Care Management;  professor of health care management, insurance and risk management, and business and public policy at the Wharton School; codirector of the Roy and Diana Vagelos Life Sciences and Management Program; and professor of economics in the School of Arts and Sciences at the University of Pennsylvania. A former commissioner on the Physician Payment Review Commission, Mr. Pauly has served on the advisory committee to the Agency for Health Care Research and Quality and on the Medicare Technical Advisory Panel. He currently serves on the National Advisory Council for the National Institutes of Health National Center for Research Resources, the National Academy of Sciences' Committee to Study the Veterinary Workforce, and its Committee on the Biomedical Workforce. He has been a consultant to the Congressional Budget Office, the Office of the Secretary of the US Department of Health and Human Services (which supported some of his work on individual health insurance), and health trade associations. Mr. Pauly is a coeditor-in-chief of the International Journal of Health Care Finance and Economics and an associate editor of the Journal of Risk and Uncertainty.  


  • Phone: 2158986861
    Email: pauly@wharton.upenn.edu

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Join us at AEI as the Right Honorable Liam Fox sits down with Marc Thiessen to discuss and debate whether America’s intelligence agencies have infringed on the personal privacy of US citizens.

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