The dilemmas of co-payment and moral hazard in the context of an NHI

The use of ‘co-payments’ to deal with possible ‘over-utilisation’ of health care services is a key point of contention in policy debates related to South Africa’s National Health Insurance proposals.

Over-utilisation occurs when health care provision (in instances when it is free at the point of service), leads to inappropriate and excessive utilisation.  Co-payments mean users still receive health services that are heavily subsidised (from public funds in the case of the proposed NHI), but have to pay something towards the cost of services – this aims to curb the frivolous use of services and avoid over-utilisation.

But what does empirical evidence say about the link between co-payments and user behaviour? If co-payments influence utilisation patterns, exactly how does it do this and what is the impact?  Are there other methods of trying to avoid over-utilisation and how effective are they?

The Health Economics Unit (HEU) has released a report documenting the findings of a review titled ‘the dilemmas of co-payment and moral hazard in the context of an NHI’, authored by Dr Maylene Shung-King (PhD student, Oxford University / part-time researcher, HEU).