Cost sharing: Do employees understand cost sharing and do increases in cost sharing really have an impact on the utilization of health care services

Employers have recently moved to greater cost sharing to constrain health care costs through increased consumer cost-consciousness. Little information exists regarding patient knowledge and perception of costs and how it relates to utilization. This dissertation explores the following questions: (1) Are employees aware of their cost sharing responsibilities, and does that knowledge play a role regarding decisions to seek care?(2) Does perception of cost play a role regarding decisions to seek care? (3) What is the impact of increased cost sharing on utilization of health care services?; This study merged claims data with survey responses resulting in a database including actual and perceived levels of cost sharing and utilization, and information on consumers' price sensitivity. The study included increases to cost sharing for physician, emergency department, outpatient surgery, hospitalization and mental health services. Both difference-in-difference and trend models were used.; Two-thirds of respondents accurately reported the percent of the premium they paid and the co-payment for a doctor's visit. About half of respondents knew the co-payment for an emergency department visit. Knowledge of premium wasn't related to family size or use of health services; however, knowledge of co-payment for a doctor's visit was better among families with two or more people. Younger, less educated, and lower-income people reported their co-payments more accurately. Respondents more knowledgeable about costs used more office visits and had fewer visits to the emergency department. In addition, accurate and over-estimation of co-payments was associated with higher self-reported reductions and delays of office visits. Finally, increases in co-payments did not deter utilization with the exception of mental health and office visits. The decrease in office visits was almost entirely explained by decreases in visits for children.; These results provide evidence that people more knowledgeable about costs use care in a manner that might be characterized as "more efficient." Middle-income workers may prefer increases in co-payments over increases to monthly premiums. If employers use increased cost sharing to reduce unnecessary health care utilization, they should couple it with a strong educational campaign. Policymakers struggling with these questions are provided with guidance in this regard.