Cost-Sharing in Medical Care Can Increase Adult Mortality: Evidence from Colombia

There is substantial evidence that cost-sharing in medical care constrains total health spending. However, there is relatively little (and unclear) evidence on its health effects, particularly in low- and middle-income countries. This paper re-evaluates the link between outpatient cost-sharing and health, studying Colombia’s entire formal sector workforce observed monthly between 2011 and 2018 with individual-level health care utilization records linked to payroll data and vital statistics. Because Colombia’s national health system imposes discrete breaks in outpatient cost-sharing requirements across the earnings distribution, we estimate a dynamic regression discontinuity model, finding that greater outpatient cost-sharing initially reduces use of outpatient care (including consultations and drugs), resulting in fewer diagnoses of common chronic diseases—and over time, increases the prevalence and severity of chronic diseases as well as use of inpatient care. Ultimately, greater outpatient cost-sharing measurably increases mortality, raising 8-year mortality by four deaths per 10,000 individuals. To the best of our knowledge, this study is the first to show a relationship between cost-sharing and adult mortality risk in a low- or middle-income country, a relationship important to incorporate into social welfare analyses of cost-sharing policies.