This may be a health care sort of a day around these parts, so settle in. There's an interesting new study out of the journal Circulation showing that when you increase drug copays, adherence to the cholesterol-lowering statin drugs drops. This is, economically, what you'd expect: Increase the marginal cost of something, and people will use less of it.
The problem is, statins are among the most cost-effective medications on earth. They cheaply and effectively prevent very costly conditions. Health policy types like to joke that we should just lace the tap water with them, throw in some hypertensive medications for good measure, and we'd cut spending by a third. The downside is, when you decrease their use among populations that need them, you increase the population's risk of heart attacks. When you increase the risk of heart attacks, you increase the risk of expensive interventions from ambulance visits to angioplasties to emergency bypasses to carotid catheterization. And all this increases spending dramatically.
This is the general problem for policies like HSAs, which impose cost-sharing without guiding preferences. Patients are very bad at understanding what care they do and do not need. So you can get them to cut back by increasing exposure to price, but you run the risk of getting them to cut back indiscriminately, thus raising total cost when they end up collapsing a few months down the road. I'll have a piece on this coming out probably tomorrow, but there's something of a compromise to be struck on cost-sharing, in which it's eliminated for treatments we know to be wildly cost-effective and increased for interventions we're less sure about. Just doing it randomly through mechanisms like higher co-pays, however, creates effects like this one, which both degrade health and increase total spending.
