Medical Tuesday Blog

Cost Sharing

Oct 22

Written by: Del Meyer
10/22/2015 2:16 AM 

Of the 28 OECD countries that share Canada’s goal of providing care on the basis of need and not ability to pay, 23 have some form of cost sharing program for patients covering hospital and physician services, and in many cases emergency room visits. All of these countries have realized what economic experiments and international evidence have shown for years: making patients responsible for some of the cost of their care leads to more informed decisions about when and where the health care system is accessed.

Two nations have, in fact, expanded their cost sharing programs over the last year in order to take better advantage of the benefits generated by such reforms. Beginning just last month, the German cost sharing program has been expanded to include physician services in addition to hospital services. The Slovak Republic has taken an even larger step and gone from no cost sharing for hospital and physician services, to a full range of co-payments. The Slovak reforms have been remarkably successful at controlling costs: just six months after the new Slovak program, the government witnessed a 30 percent reduction in the number of visits to general practitioners and a 25 percent reduction in the number of hospital stays.

Put another way, implementing a cost sharing policy as is done in France, Sweden, Japan, and Australia—all of whom do better on health care outcomes than Canada while spending less than we do [in Canada]—would have profound effects on the efficiency and cost of health care in Alberta. First, access to family physicians and clinics would be improved for those in need as some patients (25 to 30 percent in the case of Slovakia) will opt to save the charge and not seek medical attention. Second, remarkably long waiting times for emergency care would fall as patients requiring attention for non-critical conditions would seek care in more cost-effective settings. Third, resources freed up as a result of the first two effects could be used to treat the real health care problems that reside on the province’s waiting lists or allow for tax relief that would benefit the economy as a whole.


Cost sharing appears to be a more acceptable concept, which is gaining acceptance in a number of countries with dramatic reductions in cost, than having the system of yearly deductibles and copayments on every service. However, the concept is identical. This has been the modus operendi in HealthPlanUSA, our research endeavor as the ideal HealthPlan for our country to counterman the enormous costs of Obamacare that we are now experiencing. We have shown up to 60 percent anticipated reduction in Emergency Care and a 40 percent reduction in Hospital Care with the HPUSA proposal—similar to the “cost sharing” concept which is teaching socialized countries that cost sharing (deductibles and co-payments) makes health care more efficient and saves huge amounts of costs.

However, in the United States we still have health plans that have no deductions and no copayments offered which are highly popular. What isn’t understood in these plans, that every significant cost has to be pre-approved by the insurance carrier and physicians are expected to be the medical policemen for utilization to keep costs low. Physicians are already experiencing administrative review the past several years with more stringent reviews promised in 2017. Doctors are experiencing reduced payments if their panel of patients exceeds a certain expected norm. This will become a severe cost reduction starting next year when additional penalties will be levied.  Doctors are leaving the HMO panels, the Obamacare Medicaid panels, and now even the Medicare panels in droves. We know of some physicians who have closed their practice and have become hospital and corporate employees and a few have joined the ranks of the skilled labor union type of job fearing serious retribution in medicine. We are in the process of closing our practice. We are unable to afford the costs of review, denials, rebilling, denials, and just giving up the entire process to bill Medicare for it is too expensive to finesse.


What has been recommended for years is to have a high deductible health insurance policy to cover hospitalizations and surgery and then pay for the yearly small items such as physician visits and medications on a cash basis.

HealthPlanUSA, an Incubator Endeavor, proposes to have a yearly deductible equal to the average yearly cost of routine care with a graduated cost sharing mechanism such as a 10 percent copayment for hospitalization and major surgery, 20 percent copayment for Emergency and Surgical center care and a 30 percent copayment for outpatient care.

Our informal study on our patients have found approximately a 70 percent reduction in Emergency Visits when a 20 percent copayment was requested on registration, and a 30 percent reduction in hospital admissions when a 10 percent copayment was requested at the time of registration, which could be placed on a credit card. This is such a simple straight forward solution to our health care corundum, that no further health care reform would be required. Such a plan could replace standard health insurance, high deductible health insurance, and no health insurance because it would now be affordable to everyone.

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Our data is strictly on an individual interview base, e.g. “If you had to pay the 20% of the average $600 fee for an ER visit, would you have gone?” More than two-thirds of the respondents say they would not have gone to the ER but made alternate arrangements such as an office visit the next morning.

“If you had to pay 10% of the average $2,000 a day hospital charge, would you have come to the hospital or made other arrangements.” Outside of a heart attack, stroke, or emergency, one-third stated that they would have made arrangements with members of their family to assist in their care, bringing them to the doctor, assisting them in their home, and follow up with their doctor. Thus only those that required hospital care would have come to the hospital. Thus on an average 5-day stay, $9,000 would have been saved.

These are huge savings not comprehended by the promoters of universal health care managed by a government which 80% of Americans don’t trust.

This data is now supported by several socialized medicine countries that now see a huge savings in cost by just such a cost sharing plan, which we call a yearly deductible and co-payment on each service. What is so difficult to comprehend that Hillary and Bernie don’t understand?

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

–Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

Why would American’s want this type of a costly system?

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