This document discusses user fees and cost-sharing in OECD countries. It finds that most countries require patients to share costs for outpatient primary care through copayments or deductibles. Inpatient care is more often free or subject to small daily copayments. Pharmaceutical costs are usually shared through coinsurance rates or prescription fees. Exemptions from cost-sharing are often provided for vulnerable groups like children, seniors, disabled, and low-income individuals. While fees can potentially increase revenues and reduce moral hazard, they may also reduce access to essential care and disproportionately burden the ill and poor. Alternatives to fees include benefit refinement, reference pricing, and promotion of self-care.

1. USER FEES AND COST-SHARING
IN OECD COUNTRIES
3rd Annual Meeting of the Joint Network on Fiscal
Sustainability of Health Systems
Paris, OECD, 25 April 2014

2. Organisation of health care coverage
Main source of basic health
care coverage
Countries
Tax-funded
health system
Australia, Canada, Denmark, Finland,
Iceland, Ireland, Italy, New Zealand,
Norway, Portugal, Spain, Sweden,
United Kingdom
Health
insurance
system
Single payer Greece, Korea, Luxembourg, Poland,
Slovenia, Turkey, Hungary
Multiple insurers,
with automatic
affiliation
Austria, Belgium, France, Japan
Multiple insurers,
with choice of
insurer
Chile, Czech Republic, Germany, Israel,
Mexico, the Netherlands, Slovak
Republic, Switzerland, United States

3. Section 4. Comprehensiveness of basic health care coverage
Section 4 aims to assess the level of basic health care coverage to which “typical”
working-age adults are entitled to. Responses should not consider children, seniors
and other categories of population which may be entitled to higher levels of benefits
(e.g. people with serious illnesses). In countries with multiple insurers allowed to offer
different levels of benefits, responses should refer to the most frequent or most typical
situation.
Question 13. Is there a general deductible* that must be met before basic health
coverage pays a share of the cost or the full cost of covered services?
□ Yes
If so, what is the amount of the deductible that must be met before basic primary
health coverage pays/reimburses? (national currency units) ______
What is the period in which the deductible applies (e.g. year, lifetime, episode of illness,
etc.)?
□ No
Information collected in the Health Systems
Characteristics survey

4. Information collected in the Health
Systems Characteristics survey
Outpatient primary
care physician*
contacts
Examples:
- Free at the point of care;
- Copayment of €2 per visit;
- Copayment of €10 for the first of each semester;
- Co-insurance of 20%;
- Not reimbursed if not referred
Pharmaceuticals Examples:
- Copayment per prescription item ($5 for generics and $20-25 for brandname
drugs);
- Cost-sharing: 10% of cost with a min of €5 and a max of 10€ per item;
- Cost-sharing of 0%, 35%, 65% or 85% depending on drug category + €0.50
per item
- Deductible of SEK 900 beyond which cost-sharing diminishes by step as
spending increases (from 50%, 25%, 10% and 0%).
- Any difference between actual price and reference price for medicines subject
to reference price
Question 14. Are patients required to share the costs of health care for the
services and goods listed below?
Please indicate the type and level of cost-sharing left at the charge of users by basic
primary health coverage, in the case of an adult with no specific exemption of user
charge. If there is no cost-sharing, please indicate "no cost-sharing".

5. Different types of cost-sharing
Co-insurance: cost-sharing requirement whereby the insured person pays a share of the
cost of the medical service (e.g. 10%).
Copayment: fixed sum (e.g. USD 15) paid by an insured individual for the consumption
of itemized health care services (e.g. per hospital day, per prescription item). User fee,
prescription fee sometimes used as synonymous.
Deductible: lump sum threshold below which an insured person must pay out-of-pocket
for health care before insurance coverage begins. It is defined for a specific period of
time: one year, one quarter or one month. Deductibles can apply to a specific category of
care (e.g. physicians’ visits, pharmaceutical spending) or to all health expenditures
(general deductible).
Extra-billing: refers to any difference between the price charged and the price used as a
basis for reimbursement purpose. In the pharmaceutical sector, where “reference prices”
are often used, a fixed reimbursement amount is determined for a cluster of products,
while sellers remain free to set a higher price. The patient pays out-of-pocket any
difference between the price of a medicine and the reference price.

6. Out-of-pocket
payments
(System of health
account)
Spending by people
without health
coverage
Cost-sharing for
health care goods
and services which
are partially covered
Cost-sharing and user
charges left by basic
health coverage
(potentially covered by
PHI in some countries)
+
Potential extra-billing
Payment for goods
and services which
are not covered
Informal payments
User fees and cost-sharing: what are we talking about?

7. From « entitlements » to actual coverage
Entitlements: Who is covered? for what (benefit basket)?
At what level? (with or without cost-sharing)
Health spending level and financing structure
Availability
of health
care supply
Affordability of
health care
services and
goods
Cost-
sharing
exemptions
and caps

8. • Canada and Hungary indicated that patients can access primary
care services for free.
• Japan indicated a 30% co-insurance rate for these services.
• The share of PHI and OOP payments in spending for basic medical
and diagnostic care is:
Examples
0%
10%
20%
30%
40%
50%
Canada Hungary Japan
OOP
PHI

9. User charges: where are we?
Cost-sharing on outpatient
medical care Primary care Specialised care
Free of charge for all Canada, Denmark, Hungary, Italy,
Poland, United Kingdom
Canada, Denmark, Hungary, New Zealand,
Poland, Spain, United Kingdom
Free of charge for some Australia (≈80% of GP services)
Chile (public-public)
Germany (SHI-85% pop)
Greece (public provider)
Ireland (40% of pop)
Mexico (public-public)
Australia,
Germany (SHI)
Greece (public providers),
Ireland (public-public)
Mexico (public-public)
Deductible Austria (specific)
Netherlands (general)
Austria, Israel (specific)
Netherlands (general)
Copayment Belgium, Czech Republic, Finland,
Iceland, Israel
Belgium, Czech Republic, Finland, Italy,
Portugal
Co-insurance Chile (provider choice)
Japan, Korea, Luxembourg
Chile, Japan, Korea, Luxembourg,
Slovenia
Copayment+co-insurance France France, Iceland
Deductible + co-insurance Switzerland Switzerland
Full price Ireland (60% of pop)

10. • Inpatient care is more often free of charge or only subject
to small daily copayments, except in a few countries with
co-insurance rates (France, Japan, Korea, etc)
• In a few countries, inpatient care is free for patients
admitted as public patients in public hospital but subject
to copayments for patients admitted as private patients
(Australia, Italy)
• User charges are the common rule for pharmaceuticals,
with a few exceptions. They most often take the form of
co-insurance (with differentiated rates) or fixed
prescription charges. Several countries also have
deductibles
User charges: where are we?

11. Chronically ill
and/or disabled
Low-income
Entitled to
social
benefits
Seniors Children
Pregnant
women
Beyond an
absolute cap on
cost-sharing
Beyond a
cap related to
income
Australia      
Austria    
Belgium      
Canada
Chile     
Czech Republic    
Denmark    
Finland     
France    
Germany   
Greece     
Hungary  
Iceland    
Ireland     
Israel     
Italy     
Japan    
Korea    
Luxembourg     
Mexico 
Netherlands  
New Zealand   
Norway    
Poland 
Portugal    
Slovak Republic 
Slovenia    
Spain  
Sweden   
Switzerland   
United Kingdom    
Reductions or exemptions of copayments for specific population

12. Note:
Source: OECD Health Statistics 2013
What do patients pay for?
Shares of out-of-pocket medical spending by services and
goods, 2011 (or nearest year)

13. • They can potentially increase revenues to finance health
care
• They can potentially reduce excessive demand for health
care (moral hazard), i.e. reduce spending related to this
fraction of demand
Arguments in favour of cost-sharing

14. • More than 130 studies on the impact of copayments on
pharmaceutical consumption:
– They reduce the consumption of non-essential but also essential
medicines
– The impact on health is not well evaluated… but what are
« essential medicines » if we can live without them without any
impact on health?
– Short term impact on spending
• Studies on other types of care (physicians visits, emergency, etc)
– Reduction in utilisation in some cases, sometimes only
temporary
– Substitutions with other types of care is not well known
– The impact on total spending in not well known
Arguments against copayments: impact on demand,
spending and health

15. • Copayments target patients while more than 4/5 of spending is
generated by physicians’ prescriptions. Do we think patients are
better placed to make clinical decisions? Do we want these decisions
to be influenced by ability to pay?
• Copayments are inequitable
– “Tax on the ill seeking care”
– They disproportionally affect low-income population
• Copayments generate administration costs
• Copayments are politically difficult to introduce, relatively easy to
increase
• Copayments are limited in their capacity to raise resources because
of concentration of spending
Arguments against copayments

17. • Make sure they are based on value and provide appropriate
incentives
– Incentives to use cheaper alternatives where available (
Reference prices for medicines, Differentiated copayments)
– Remove copayments from cost-effective treatments you want
people to take and comply with
– Use them to encourage virtuous patient’s pathways, use of
medical records (France, Belgium)
– Present lower copayments as a bonus rather than higher
copayments as a penalty
• Protect low-income groups against copayments
• Do not neglect alternative measures such as HTA-based updating
of the benefit package, promotion of self-care (including access to
OTC medicines).
If you really want to keep or introduce cost-sharing