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Australian Health Review Australian Health Review Society
Journal of the Australian Healthcare & Hospitals Association
RESEARCH ARTICLE

Australia's pharmaceutical cost sharing policy: reducing waste or affordability?

Evan Doran and Jane Robertson

Australian Health Review 33(2) 231 - 240
Published: 2009

Abstract

In this paper we argue that Australia?s pharmaceutical cost sharing policy has been applied as if cost sharing is unproblematic for medicine affordability and good health outcomes. Australian and international experience with pharmaceutical cost sharing strongly suggests a negative impact on affordability and quality use of medicines, disproportionately affecting low income patients. We argue that Australia?s use of cost sharing reflects the currency of a cognitively powerful and morally charged idea ? moral hazard. Moral hazard refers to the change in behaviour induced by insurance coverage. Applied to pharmaceuticals, this means that low out-of-pocket cost will lead to waste. Moral hazard mixes the explanatory power of price with the intuitively cogent notion that if people do not experience consequences they will behave irresponsibly. Cost sharing policy has gone unscrutinised and uncontested not because cost sharing is unproblematic, but because in the light of the idea of moral hazard it has all the question-deadening weight of common sense.

https://doi.org/10.1071/AH090231

© AHHA 2009

Committee on Publication Ethics

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