Cost-sharing

Definition

Health Economics

  • Usually used to refer to a method of financing health care that involves some portion of the expenditure falling directly on the user. The cost is then shared between user and employer, government, taxpayer, insurance agency and so on. This is also sometimes referred to as ' demand -side cost-sharing'. It is viewed both as a means of deterring relatively 'trivial' consumption (and of course assumes a non-zero price elasticity of demand) and as a means of enlarging the financial bases from which health services are financed. What is meant by 'trivial' is anyone's guess. The term ' supply -side cost-sharing' is a term occasionally used to describe a situation where the provider receives from a third party payer less than the full costs of providing a given service.
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