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.