What happens when we make patients pay more?

The answer comes from Japan, where the elderly become eligible for significantly lower cost sharing when they turn 70 (co-payment rates go down by 60-80%, and there are no deductibles in Japan).  Here is what happens:

1.  They consume more (for inpatient admissions and  office visits the elasticity=-0.2); but

2.  Their health status does not change; and

3.  They pay less out-of-pocket (smaller co-payments more than offsets the bigger consumption).

BOTTOM LINE:  Bigger co-payments can reduce utilization without adversely affecting health.

OK, here is the science, where are the politicians?