As health-care costs have soared in recent years, insurers and employers have sharply increased co-payments for prescription drugs to shift more of that expense to workers.

Now, a new study indicates that when co-payments rise, the health of patients with certain chronic illnesses can suffer. Even modest increases in co-payments can lead to health setbacks for these people, according to the study, to be published today in the Journal of the American Medical Association.

Early research into the effects of efforts to shift health-care costs, such as a study late last year by Harvard Medical School and Medco Health Solutions Inc., has shown that increasing co-pays can lead patients to move away from higher-price drugs or to stop taking some medicines altogether. What hasn't been clear, though, is whether such changes simply cut the overuse of some drugs, such as heartburn and nondrowsy allergy pills -- or actually thwart patients in getting medicines critical to their health.

The latest findings underscore what many health experts already have begun to suspect: That simply raising drug co-pays across the board is a fairly blunt instrument in the effort to control rising health-care costs. In the long term, some worry that tactic could actually increase health-care costs for certain patients, if cutting back on medicine leads to expensive complications.

The study, by researchers at Rand Corp., a think tank in Santa Monica, Calif., found that when co-payments doubled, the use of prescription drugs fell between 17% and 23% among patients with diabetes, asthma and gastric acid disease. Meanwhile, visits to emergency rooms rose 17% for people with those conditions, and hospital stays increased 10%.

The study comes amid a huge rise in co-payments for employees at companies big and small. From 2000 to 2003, the average co-payment for a preferred prescription drug rose 46% to $19, while the average for a nonpreferred drug climbed 71% to $29, according to a 2003 survey of employers by Kaiser Family Foundation. 

In less than a decade, many employer health plans have moved from a standard co-pay of about $5 for most medicines, to three separate tiers of co-payments. In a typical tiered system, a patient will pay a lower amount, say $10, for generic drugs, perhaps $20 for branded drugs on the company's preferred-drug list, and $40 for nonpreferred branded drugs.


Experiments under way at some companies suggest that higher co-payments don't necessarily have to result in barriers to necessary medicines for employees. A handful of companies, for example, have eliminated or reduced co-payments for treatments for a few chronic conditions. Pitney Bowes Inc., for example, cut the amount that people in its health plans pay for diabetes and asthma drugs to 10% of the retail price (compared with 30% and 50% for some drugs) in 2002. Less than two years later, the number of emergency-room visits and hospital stays fell among those patients, lowering their medical costs in some cases.

Other companies have offered incentives to people who are more attentive to their chronic conditions, including taking long-term medications regularly. Worthington Industries, a Columbus, Ohio, metal-processing company, offers employees a full rebate on their $25 to $50 monthly premiums if they join the company's new health-management program. Employees in the program set goals such as lowering cholesterol levels or high blood pressure.

The Rand study shows how different kinds of patients respond to higher co-payments, and which are most at risk of stopping medicines vital to their well-being. People were less likely to reduce their use of a medication for a chronic condition than for other illnesses. For instance, when co-pays were doubled, patients diagnosed with high blood pressure cut back use of all other drugs by an average 27%, but only by 10% for their antihypertensive drugs.

Patients also were more likely to stop or reduce their use of drugs for which there were over-the-counter alternatives. People suffering from allergies, for example, cut back on prescription antihistamines such as Allegra or Zyrtec by 31% after co-pays doubled.

The study's findings don't suggest that charging higher co-payments for drugs is a bad thing. In fact, researchers mostly agree that a tiered co-pay system can reduce excess use of drugs for which there are cheaper, effective generic or over-the-counter alternatives, such as many prescription allergy or arthritis treatments. "We have to work on [refining co-pay plans], not condemn them, and that's the challenge," says Joe Martingale, national leader for health-care strategy at Watson Wyatt, an employee benefits consultancy.

Health economists say that is critical that a variety of drugs are available at each tier. If only one in a class of not-so-interchangeable drugs, such as antidepressants, is offered at the lower price, people may stop taking the medication, says Geoffrey Joyce, a Rand health economist and the other principal investigator on the study.

The study looked at three years of data on 530,000 people at 30 different employers, and examined what happened when co-pays rose, on average, to $12.62 from $6.31 for generic drugs and to $25.70 from $12.85 for brand-name drugs.