Abstract
Co-payments for prescription drugs are a common feature of many healthcare systems, although often with exemptions for vulnerable population groups. International evidence demonstrates that cost-sharing for medicines may delay necessary care, increase use of other forms of healthcare and result in poorer health outcomes. Existing studies concentrate on adults and older people, particularly in the US, with relatively less attention afforded to paediatric and European populations. In Ireland, prescription drug co-payments were introduced for the first time for medical cardholders (i.e. those with public health insurance) in October 2010, initially at a cost of €0.50 per item, rising to €1.50 in January 2013, and further increasing to €2.50 in December 2013. Using data from the Growing Up in Ireland longitudinal study of children, and a difference-in-difference research design, we estimate the impact of the introduction (and increase) of these co-payments on health, healthcare utilisation and household financial wellbeing. The introduction of modest co-payments on prescription items was not estimated to impinge on the health of children and parents from low-income families. For the younger Infant Cohort, difference-in-difference estimates indicated that the introduction (and increase) in co-payments was associated with a decrease in GP visits and hospital nights, and a decrease in the proportion of households reporting ‘difficulties with making ends meet’. In contrast, for the older cohort of children (the Child Cohort), co-payments were associated with an increase in GP visiting, and an increase in household deprivation. While the parallel trends assumption for difference-in-difference analysis appeared to be satisfied, further investigation revealed that there were other time-varying observable factors (such as exposure to the economic recession over the period) that affected the treatment and control groups, as well as the two cohorts of children differentially, that may partly explain these divergent results. For example, while the analysis suggests that the introduction of the €0.50 co-payment in 2010 was associated with an increase in the probability of treated families in the Child Cohort being deprived by 9.4 percentage points, the proportion of treated families experiencing unemployment and reductions in household income also increased significantly around the time of the co-payment introduction. This highlights the difficulty in identifying the effect of the co-payment policy in an environment in which assignment to the treatment (i.e. medical cardholder status) was not randomly assigned.
Similar content being viewed by others
Notes
Child benefit is a universal monthly payment made to parents or guardians of children under 16 years.
Yes response to question: does the study child have any on-going chronic physical or mental health problem, illness or disability?
Yes response to question to caregiver: do you have any on-going chronic physical or mental health problem, illness or disability?
References
Drummond, M., Towse, A.: Is it time to reconsider the role of patient co-payments for pharmaceuticals in Europe? Eur. J. Health Econ. 13(1), 1–5 (2012)
Lexchin, J., Grootendorst, P.: Effects of prescription drug user fees on drug and health services use and on health status in vulnerable populations: a systematic review of the evidence. Int. J. Health Serv. 34(1), 101–122 (2004)
Gemmill, M.C., Thomson, S., Mossialos, E.: What impact do prescription drug charges have on efficiency and equity? Evidence from high-income countries. Int. J. Equity Health 7, 13–16 (2008)
Goldman, D.P., Joyce, G.F., Zheng, Y.: Prescription drug cost sharing: associations with medication and medical utilization and spending and health. J. Am. Med. Assoc. 298(1), 61–69 (2007)
Selden, T.M., Kenney, G.M., Pantell, M.S., Ruhter, J.: Cost sharing in medicaid and CHIP: how does it affect out-of-pocket spending? Health Aff. 28(4), 607–619 (2009)
Williams, A.J., Henley W., Frank, J.: Impact of abolishing prescription fees in Scotland on hospital admissions and prescribed medicines: an interrupted time series evaluation, 1–10 (2018)
Cohen, D., Alam, M.F., Dunstan, F.D.J., Myles, S., Hughes, D.A., Routledge, P.A.: Abolition of prescription copayments in Wales: an observational study on dispensing rates. Value Health 13(5), 675–680 (2010)
Thomson, S., Jowett, M., Mladovsky, P., Evetovits, T., Figueras, J., Nolan, A.: Health System Responses to Financial Pressures in Ireland: Policy Options in an International Context. European Observatory on Health Systems and Policy, World Health Organisation, Geneva (2014)
Sinnott, S.J., Buckley, C., O’Riordan, D., Bradley, C., Whelton, H.: The effect of copayments for prescriptions on adherence to prescription medicines in publicly insured populations; a systematic review and meta-analysis. PLoS One. 8, 5 (2013)
Chandra, A., Gruber, J., McKnight, R.: Patient cost-sharing and hospitalization offsets in the elderly. Am. Econ. Rev. 100(1), 193–213 (2011)
Gaynor, M., Li, J., Vogt, W.: Substitution, spending offsets, and prescription drug benefit design. Forum Health Econ. Policy. 10(2), 4 (2007)
Tamblyn, R., Hanley, J.A., Abrahamowicz, M., Scott, S., Mayo, N., Hurley, J.: Prescription drug cost-sharing among poor and elderly persons. J. Am. Med. Assoc. 285(4), 421–429 (2001)
Department of Health: Health in Ireland. Key Trends 2018. Government of Ireland, Dublin (2018)
Brown, C., Barron, T.I., Bennett, K., MacDonald, D., Dwane, F., Sharp, L.: Generalisability of pharmacoepidemiological studies using restricted prescription data. Ir. J. Med. Sci. 185(3), 723–727 (2016)
Connolly, S., Nolan, A., Walsh, B., Wren, M.A.: Universal GP care in Ireland: potential cost implications. Econ. Soc. Rev. (Irel). 49(1), 93–109 (2018)
Barry, M., Usher, C., Tilson, L.: Public drug expenditure in the Republic of Ireland. Expert Rev. Pharmacoecon. Outcomes Res. 10(3), 239–245 (2010)
Hong, S., Shepherd, M.D.: Outpatient prescription drug use by children enrolled in five drug benefit plans. Clin. Ther. 18, 3 (1996)
Sturkenboom, M.C.J.M., Verhamme, K.M.C., Nicolosi, A., et al.: Drug use in children: cohort study in three European countries. Br. Med. J. 337, a2245 (2008)
Madsen, H., Andersen, M., Hallas, J.: Drug prescribing among Danish children: a population-based study. Eur. J. Clin. Pharmacol. 57(2), 159–165 (2001)
Schirm, E., Van den Berg, P., Gebben, H., Sauer, P., De Jong-van den Berg, L.: Drug use of children in the community assessed through pharmacy dispensing data. Br. J. Clin. Pharmacol. 50(5), 473–478 (2000)
Fernández-Liz, E., Modamio, P., Catalán, A., Lastra, C.F., Rodríguez, T., Mariño, E.L.: Identifying how age and gender influence prescription drug use in a primary health care environment in Catalonia, Spain. Br. J. Clin. Pharmacol. 65(3), 407–417 (2008)
Barry, E., Smith, S.M.: Potentially inappropriate prescribing in children. Fam. Pract. 32(6), 603–604 (2015)
Pichichero, M.E.: Dynamics of antibiotic prescribing for children. J. Am. Med. Assoc. 287(23), 3133–3135 (2002)
Keogh, C., Motterlini, N., Reulbach, U., Bennett, K., Fahey, T.: Antibiotic prescribing trends in a paediatric sub-population in Ireland. Pharmacoepidemiol. Drug Saf. 21, 945–952 (2012)
Albert, P.R.: Drugs for kids: good or bad? J. Psychiatry Neurosci. 37(5), 293–295 (2012)
Boland, F., Galvin, R., Reulbach, U., et al.: Psychostimulant prescribing trends in a paediatric population in Ireland: a national cohort study. BMC Pediatr. 15, 1 (2015)
Luiza, V.L., Chaves, L.A., Silva, R.M., et al.: Pharmaceutical policies: Effects of cap and co-payment on rational use of medicines. Cochrane Database Syst. Rev. 2015, 5 (2015)
Reuveni, H., Sheizaf, B., Elhayany, A., et al.: The effect of drug co-payment policy on the purchase of prescription drugs for children with infections in the community. Health Policy (New York). 62(1), 1–13 (2002)
Karaca-Mandic, P., Jena, A.B., Joyce, G.F., Goldman, D.P.: Out-of-pocket medication costs and use of medications and health care services among children with asthma. J. Am. Med. Assoc. 307(12), 1284–1291 (2012)
Fung, V., Graetz, I., Galbraith, A., et al.: Financial barriers to care among low-income children with asthma: health care reform implications. JAMA Pediatr. 168(7), 649–656 (2014)
Ungar, W.J., Kozyrskyj, A., Paterson, M., Ahmad, F.: Effect of cost-sharing on use of asthma medication in children. Arch. Pediatr. Adolesc. Med. 162(2), 104–110 (2008)
Galbraith, A.A., Fung, V., Li, L., et al.: Impact of copayment changes on children’s albuterol inhaler use and costs after the clean air act chlorofluorocarbon ban. Health Serv. Res. 53(1), 156–174 (2018)
Huskamp, H.A., Deverka, P.A., Epstein, A.M., et al.: Impact of 3-tier formularies on drug treatment of attention-deficit/hyperactivity disorder in children. Arch. Gen. Psychiatry. 62(4), 435–441 (2005)
Kozyrskyj, A.L., Mustard, C.A., Cheang, M.S., Simons, F.E.R.: Income-based drug benefit policy: impact on receipt of inhaled corticosteroid prescriptions by Manitoba children with asthma. Can. Med. Assoc. J. 165(7), 897–902 (2001)
Sen, B., Blackburn, J., Morrisey, M.A., et al.: Did copayment changes reduce health service utilization among CHIP enrollees? Evidence from Alabama. Health Serv. Res. 47(4), 1603–1620 (2012)
Sen, B., Justin Blackburn, J., Morrisey, M., et al.: Can increases in CHIP copayments reduce program expenditures on prescription drugs? Med. Med. Res. Rev. 4(2), E1–E18 (2014)
Murray, A., McCrory, C., Thornton, M., et al.: Growing up in Ireland: Design, Instrumentation and Procedures for the Child Cohort (at 9 Years). Department of Health and Children, Dublin (2014)
Thornton, M., Williams, J., McCrory, C., Murray, A., Quail, A.: Growing up in Ireland: Design, Instrumentation and Procedures for the Infant Cohort at Wave One (9 Months). Department of Children and Youth Affairs, Dublin (2013)
McCrory, C., Williams, J., Murray, A., Quail, A., Thornton, M.: Growing up in Ireland: Design, Instrumentation and Procedures for the Infant Cohort at Wave Two (3 Years). Department of Children and Youth Affairs, Dublin (2013)
Thornton, M., Williams, J., McCrory, C., Murray, A., Quail, A.: Growing up in Ireland: Design, Instrumentation and Procedures for the Child Cohort at Wave Two (13 Years). Department of Children and Youth Affairs, Dublin (2016)
Cleemput, I., Devos, C., Devriese, S., Farfan-Portet, M.-I., Van de Voorde, C.: Principles and Criteria for the Level of Patient Cost-Sharing: Reflections on Value-Based Insurance. Health Services Research, Brussels (2012)
Mack, J., Lansley, S.: Poor Britain. Allen and Unwin, London (1985)
Commission, European: Measuring Material Deprivation the EU—Indicators for the Whole Population and Child-Specific Indicators. European Commission, Luxembourg (2012)
Halleröd, B.: Sour grapes: relative deprivation, adaptive preferences and the measurement of poverty. J. Soc. Policy. 35(3), 371–390 (2006)
Winkelmann, R.: Health care reform and the number of doctor visits—an econometric analysis. J. Appl. Econom. 19(4), 455–472 (2004)
Hsu, J., Price, M., Huang, J., et al.: Unintended consequences of caps on medicare drug benefits. N. Engl. J. Med. 354(22), 2349–2359 (2006)
Ayyagari, P., Shane, D.M.: Does prescription drug coverage improve mental health? Evidence from Medicare Part D. J. Health Econ. 41, 46–58 (2015)
Sinnott, S.J., Charles, N., Byrne, S., Woods, N., Whelton, H.: Copayments for prescription medicines on a public health insurance scheme in Ireland. Pharmacoepidemiol. Drug Saf. 25, 695–704 (2016)
Ai, C., Norton, E.C.: Interaction terms in logit and probit models. Econ. Lett. 80(1), 123–129 (2003)
Karaca-Mandic, P., Norton, E.C., Dowd, B.: Interaction terms in nonlinear models. Health Serv. Res. 47(1), 255–274 (2012)
Bertrand, M., Duflo, E., Mullainathan, S.: How much should we trust differences-in-differences estimates? Q. J. Econ. 119(1), 249–275 (2004)
Wing, C., Simon, K., Bello-gomez, R.A.: Designing difference in difference studies: best practices for public health policy research. Annu. Rev. Public Health 39, 453–469 (2018)
Kwak, S.Y., Yoon, S.J., Oh, I.H., Kim, Y.E.: An evaluation on the effect of the copayment waiver policy for Korean hospitalized children under the age of six. BMC Health Serv. Res. 15, 1 (2015)
Linnet, K., Halldórsson, M., Thengilsdóttir, G., Einarsson, Ó.B., Jónsson, K., Almarsdóttir, A.B.: Primary non-adherence to prescribed medication in general practice: lack of influence of moderate increases in patient copayment. Fam. Pract. 30(1), 69–75 (2013)
Whelan, C.T.: Economic stress and the great recession in Ireland: the erosion of social class advantage. Econ. Soc. Rev. (Irel). 49(3), 259–286 (2018)
Hoadley, J., Alker, J.: How Medicaid and CHIP Shield Children from the Rising Costs of Prescription Drugs. Georgetown University Health Policy Institute, Georgetown (2017)
Vernacchio, L., Kelly, J., Kaufman, D., Mitchell, A.: Medication use among children < 12 years of age in the United States: results from the Slone Survey. Pediatrics 124(2), 446–454 (2009)
Sinnott, S.J., Guinane, M., Whelton, H., Byrne, S.: Is 50 cent the price of the optimal copayment? A qualitative study of patient opinions and attitudes in response to a 50 cent charge on prescription drugs in a publicly funded health system in Ireland. BMC Health Serv. Res. 13, 1 (2013)
Norris, P., Ph, D., Tordoff, J., et al.: Impact of prescription charges on people living in poverty: a qualitative study. Res. Soc. Adm. Pharm. 12(6), 893–902 (2016)
Winkelmann, R.: Co-payments for prescription drugs and the demand for doctor visits: evidence from a natural experiment. Health Econ. 13(11), 1181–1189 (2004)
Murawski, M.M., Abdelgawad, T.: Exploration of the impact of preferred drug lists on hospital and physician visits and the costs to Medicaid. Am. J. Manag. Care. 11, SP35–SP42 (2005)
Department of Public Expenditure and Reform: Budget 2018 Primary Care Reimbursement Service Trend Analysis. Department of Public Expenditure and Reform, Dublin (2017)
Health Service Executive: Primary Care Reimbursement Service Statistical Analysis of Claims and Payments 2017. Health Service Executive, Dublin (2017)
Morgan, S.G., Lee, A.: Cost-related non-adherence to prescribed medicines among older adults: a cross-sectional analysis of a survey in 11 developed countries. BMJ Open. 2017, 1–7 (2017)
World Health Organization: Tracking Universal Health Coverage: 2017 Global Monitoring Report. World Health Organization, Geneva (2017)
Yu, H.: Universal health insurance coverage for 1.3 billion people: What accounts for China’s success? Health Policy (New York). 119(9), 1145–1152 (2015)
Van Den, Heever A.M.: South Africa’s universal health coverage reforms in the post-apartheid period. Health Policy (New York). 120(12), 1420–1428 (2016)
Alshamsan, R., Leslie, H., Majeed, A., Kruk, M.: Financial hardship on the path to Universal Health Coverage in the Gulf States. Health Policy (New York). 121(3), 315–320 (2017)
Government of Ireland: Sláintecare Implementation Strategy. Government of Ireland, Dublin (2018)
Acknowledgements
This research is supported by Ireland’s Health Research Board ‘Inequalities in Access to GP Care in Ireland’ project (HRA-PHR-2014-508). The authors are grateful to Growing Up in Ireland and the Central Statistics Office for access to the data and feedback. The authors benefitted from feedback from participants at the 2018 Growing Up in Ireland conference.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Electronic supplementary material
Below is the link to the electronic supplementary material.
Rights and permissions
About this article
Cite this article
Mohan, G., Nolan, A. The impact of prescription drug co-payments for publicly insured families. Eur J Health Econ 21, 261–274 (2020). https://doi.org/10.1007/s10198-019-01125-3
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10198-019-01125-3
Keywords
- Analysis of health care markets
- Health behavior
- Health insurance, public and private
- Health and inequality
- Government policy, regulation, public health