American health & drug benefits
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Am Health Drug Benefits · Jul 2010
Expect the unexpected: a role for behavioral economics in understanding the impact of cost-sharing on emergency department utilization.
AS EMPLOYERS AND PAYERS ADDRESS INCREASING HEALTHCARE COSTS, THEY RESORT TO THE TENETS OF CLASSICAL ECONOMICS: if one increases the price for a service (defined as an individual's cost-sharing), then that individual's demand for services should decrease. This, however, may not necessarily be true, and raises the question of whether increased cost-sharing for emergency department services will lead to decreased utilization of those services as would be expected in classical economics. ⋯ When assessing the need for emergency department services, many factors besides cost play a role in choosing to obtain emergency department care, including individual assessments of the probability of a given illness and the financial or temporal implications for the care sought in terms of "gains" or "losses" relative to a reference point. Behavioral economics can therefore play a role in understanding why healthcare consumers behave as they do. The implications of behavioral economics need to be factored in when considering a healthcare benefit design.