There is an old expression–“It is the cheap man who pays the most.”–that best explains why the higher co-payments for drug prescriptions or to see a doctor that took effect January 1, for many people, may actually cost a company more money.

The University of Michigan and Harvard University researchers studied the concept called “value based insurance design (VBID).” The idea of VBID is that the fewer barriers standing between a chronically ill person and the medications they need helps them to avoid a health crises or disease related complications.

As in the case of co-payment for medication even a $2 increase can create a small financial barrier. If a person doesn’t take their medication, then costly health crises looms in the distance.

The researchers compared to companies that were relative in the number of employees. One company significantly reduced the co-payments by half in most cases. Prescription drug co-payments originally ranged from $5 to $45, but were reduced to $0 to $22.50. The other company’s prescription co-payment ranged from $16 to $29. The difference in range was based on whether generic or brand-name drugs were prescribed.

Patient compliance in taking the prescribed medication increased significantly with the company who reduced their co-payment fees. The company that did not reduce their co-pays did not show any change in the patient’s compliance with prescribed medication.

The intent of the study was to determine patient compliance in taking prescribed medication, not the impact on employee productivity. However, employers like Pitney Bowes and the city of Asheville, NC have used the VBID approach and report a decreased use of health services among chronically ill employees who had their co-payments reduced.