Smaller Co-pays Could Improve Patient Outcomes


Smaller co-payments for prescription drugs leaves individuals less likely to visit the hospital.

A recent study discovered that after Australia lessened co-payments for prescription drugs, individuals were less likely to visit the hospital.

The Australian government provided an incentive to lower co-payments for drugs, and hospital utilization for chronic conditions declined by 40% in 2 years, according to a study published by the Journal of General Internal Medicine.

These findings do not show that lower co-pays were the only reason hospitalizations decreased, but the program’s goal was to reduce hospitalizations, and it did just that.

The Closing the Gap Pharmaceutical Benefit Scheme (PBS) was a part of multiple programs that aimed to improve the 13-year lifespan difference between indigenous and non-indigenous individuals. The program provided $1.6 billion in funding for initiatives that improve treatment for chronic conditions, including diabetes, heart failure, asthma, and chronic obstructive pulmonary disease.

PBS was implemented in 2010, and indigenous individuals were assessed by a physician to determine if they had, or were at risk, of developing a chronic condition. These individuals were eligible to have their co-pays for prescription drugs lowered from $33.30 to $5.40 per prescription, according to the study.

Individuals who were already receiving drugs for a co-pay of $5.40 due to subsidies could then receive the treatment for free. Additionally, these reductions applied to all drugs rather than just those that treated chronic conditions.

Researchers in the study examined data on participation in the program and hospitalizations by region for both indigenous and non-indigenous individuals, both before and after the implementation of PBS. They discovered that rate of hospitalizations among indigenous participants decreased from 82.3 per 1000 in 2009 to 61.2 per 1000 in 1000.

This benefit was largely seen in regions where there was a higher uptake of the PBS benefit, according to the study. In these regions specifically, the hospitalization rate decreased from 103.4 per 1000 to 60 per 1000, which is approximately 40%.

Researchers found that the large drop in the hospitalization rate was mostly among indigenous patients with chronic conditions, and non-indigenous patients with chronic conditions only had a reduced hospitalization rate of 12.9% during this time.

In regions with high uptake of the benefit, hospitalizations for acute condition decreased 13.5% in indigenous patients during 2009 and 2011, according to the study.

Investigators said they were surprised by the dramatic decline in hospitalization, but previous studies have shown that lowering co-pays may help improve access and adherence to medications, which then reduces hospital utilization.

Other studies have shown that hospitalization can be less costly than lowering copayments, and many have shown the numerous benefits of preventing hospitalizations.

Hospitalizations can be detrimental for patients with chronic diseases, especially in elderly patients since they may be weaker and more susceptible to hospital-acquired infections.

The investigators in the current study plan to continue the research, and investigate medical claims and other data to determine if these patients were more likely to adhere to their medications. They believe that these findings could strengthen the evidence for policies like this across the world.

“I think it’s encouraging news for public health in Australia that there were reductions for this high-risk population in the areas that had higher uptake of the incentive,” said investigator Amal Trivedi, MD. “By whatever mechanism this occurred, it’s good news that there were fewer hospitalizations for chronic conditions.”

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