Cost-Sharing in Medical Care Can Increase Adult Mortality Risk in Lower-Income Countries

Patient cost-sharing in medical care constrains total health spending, presumably with little harm to underlying patient health. This paper re-evaluates the link between cost-sharing and health, studying Colombia’s entire formal sector workforce with individual-level health care utilization records linked to payroll data and vital statistics. Given discrete breaks in outpatient cost-sharing imposed at multiple income thresholds by Colombia’s national health system, we use a regression discontinuity design and find that outpatient cost-sharing reduces use of outpatient care, resulting in fewer diagnoses of common chronic diseases and increasing subsequent emergency room visits and hospitalizations. Ultimately, these effects measurably increase mortality, and disproportionately so among the poor – raising the absolute difference in 7-year mortality risk by 0.80 and 0.23 deaths per 1,000 individuals at lower- and higher-income thresholds, respectively. To the best of our knowledge, this study is the first to show a relationship between cost-sharing and adult mortality risk in lower-income countries, a relationship important to incorporate into social welfare analyses of cost-sharing policies.One Sentence SummaryOutpatient cost-sharing in medical care discourages use – but over time, also increases costly hospital service use and raises mortality risk.