Executive summary

In high-income countries, co-payments — fixed fees that people pay when they use certain healthcare services — are not a major source of funding. Governments keep them low, limit how much a person can pay each year, and often remove them entirely for essential care. The main purpose is to guide how people use services, such as encouraging first contact with a family doctor or discouraging non-urgent use of emergency departments, while protecting access to necessary care.

Some lower-income countries rely heavily on patient payments to fund services. This approach is not appropriate for high-income systems, as it risks delaying needed care and can worsen health outcomes without delivering significant additional funding.

The overall picture

Across high-income health systems, patients either pay nothing for first-contact services such as visits to a family doctor, or they pay a small fixed fee. Where co-payments are used, governments typically set annual limits and create broad exemptions so that people are not prevented from getting necessary care. These policies limit the amount of revenue co-payments can generate.

The main role of co-payments is to encourage more efficient use of services. This can include:

  • Choosing a family doctor or primary care clinic instead of a hospital emergency department for non-urgent needs

  • Choosing a lower-cost but equally effective treatment, such as a generic medicine instead of a brand-name version

What the evidence shows (2015–2025)

Co-payments are a small share of total health spending In high-income OECD (Organisation for Economic Co-operation and Development) countries, household out-of-pocket spending (which includes co-payments) is a small proportion of total health spending. Most of this spending is for medicines, dental care, or vision care, not for core services such as visits to a doctor or hospital stays.

Zero or near-zero co-payments for essential care are common In many systems, people pay nothing to see a family doctor. Some systems also make hospital care free at the point of use, or charge only a small daily fee with a strict annual limit.

Design choices show the main goal is behaviour change Where co-payments exist, they are usually small, capped, and applied selectively. Common exemptions include children, pregnant women, people with chronic illness, and low-income households. Fees are often used in specific situations where they are likely to influence choices, such as for non-urgent emergency visits or when a generic medicine is available.

Country examples

France

  • Family doctor or specialist visit: €2 per visit, capped at €50 per year per person

  • Emergency room (not admitted): €19.61 per visit

  • Hospital stay: €20 per day; €15 per day in psychiatric units

  • Small prescription charge: €1 per box, capped at €50 per year (separate from the visit cap)

  • Most coinsurance is covered by complementary insurance. The €2 and €1 charges remain with the patient but are capped. Revenue from these fixed co-payments is very small.

Germany

  • Family doctor and specialist visits: No co-payment

  • Hospital stay: €10 per day, maximum 28 days per year

  • Prescriptions: €5–€10 per item, with many generics at zero cost; annual household cap on all statutory co-payments is 2% of income (1% for chronic illness)

  • Children are exempt from co-payments. This ensures access to routine care without cost.

Netherlands

  • Family doctor and preventive services: No co-payment at the point of use

  • An annual deductible of €385 applies to other services, but GP and preventive care are excluded from it

  • Medicines have a separate annual own-contribution cap of €250 per person

  • This design guarantees cost-free first contact with the healthcare system.

Australia

  • Family doctor visits: Many are bulk billed to Medicare (no patient charge). Where a patient pays a gap, national safety nets limit annual costs.

  • Prescriptions (Pharmaceutical Benefits Scheme): A$25.00 (reduced from A$31.60 in January 2026) for general patients; A$7.70 for concession card holders; after annual safety net thresholds (A$1,694 general; A$277.20 concessional) medicine costs drop further.

  • Co-payments are mainly used for medicines, with strong protections against high yearly spending.

Japan

  • Adults: 30% of the service cost, but with monthly caps based on income (e.g., for a typical working-age adult: ¥80,100 plus 1% of costs above ¥267,000 per month)

  • Older adults: Lower rates (10% or 20%) for most, depending on income

  • Children: Many municipalities reduce or remove co-payments entirely

  • The caps prevent excessive costs, and local subsidies further reduce financial barriers.

Countries that use co-payments as a main source of funding

In some lower-income and lower-middle-income countries, especially where public budgets are tight and insurance coverage is low, co-payments and other user fees account for a large share of total health spending. In parts of sub-Saharan Africa and south-east Asia, households have at times paid more than half of all health spending directly. These fees were often introduced to keep facilities operating and stocked with medicines when no other funding sources were available. They were not a strategic system-financing decision.

Evidence shows that high reliance on user fees can reduce use of essential care and increase financial hardship. Many countries have since reduced or removed fees for services such as maternal and child healthcare. For high-income countries, such models are neither necessary nor advisable, as they risk harming access without delivering significant budget gains.

Testing the hypothesis

If co-payments were designed to raise substantial revenue, they would be higher, uncapped, and have few exemptions. In practice, high-income countries set them low or zero for essential care, cap them tightly, and exempt people likely to be harmed by charges. This supports the hypothesis that their primary role is to influence how people use services, not to finance them.

Practical design rules for high-income countries

  1. Ensure first-contact care is easy to access Keep family doctor visits and preventive services free or very low cost to encourage early treatment and reduce pressure on emergency departments.

  2. Use co-payments selectively Apply small fees where they are likely to reduce unnecessary use, such as non-urgent emergency visits or when lower-cost medicines are available.

  3. Limit total exposure Set a clear annual cap on what households can pay, with a lower cap for people with chronic illness. Exempt children, pregnancy, and long-term conditions.

  4. Keep the system simple Use few types of fees, explain them clearly, and track patients’ total payments automatically to apply caps without extra administration.

  5. Pilot, monitor, and adjust Introduce small fees in targeted areas, measure the effects, and adjust quickly if necessary care is being delayed.

  6. Beware unintended consequences See my previous writings on how the commercialising the relationship between patients and health care providers can backfire

Conclusion

In high-income systems, co-payments are a tool for guiding patient behaviour, not a major funding source. Countries that keep co-payments low, capped, and targeted protect access to care while encouraging efficient use of services. The experience of lower-income countries that have relied heavily on patient fees shows the risks of treating co-payments as a primary revenue source — risks that high-income countries can and should avoid.