Value-based Insurance Design Research Articles

Does targeted information impact consumers’ preferences for value-based health insurance? Evidence from a survey experiment

Abstract Objectives Value-based insurance design (VBID) aims to direct consumers’ preferences by incentivizing the use of high-value care and discouraging the use of low-value care. However, consumers often have limited knowledge of health insurance and the health insurance system, possibly distorting their preferences. In this study, we aim to investigate the impact of specific information treatments on consumers’ preferences for VBID. Methods We implemented an information experiment as part of a representative survey on health insurance literacy and preferences for VBID within Switzerland’s choice-based health insurance system. Preferences for VBID were measured through a discrete choice experiment. Cross-sectional data on 6,033 respondents aged 26–75 were analyzed using descriptive statistics and mixed logit regressions. Results Respondents showed strong preferences for their current health insurance instead of VBID alternatives. A general description of current regulations on cost-sharing, drug disbursement, and monthly premiums significantly increased preferences for VBID (p < 0.01). Pointing respondents specifically to VBID further reduced the opposition against VBID plans. At the same time, there is evidence for anchoring effects in copayments after receiving the information treatments, irrespective of the value of the care. Conclusions The results of this study highlight that individuals are susceptible to provided information about health insurance when building their preferences for VBID. One potential explanation is limited health insurance literacy, implying that tailored communication strategies may be needed to improve insurance decision-making. JEL Classification I11, I13.

The Role of Ethics Committees in Charity Care Allocation.

Hospital ethics committees (HECs) traditionally focus on clinical ethics but are increasingly recognized for their potential role in addressing organizational ethics, particularly in the allocation of charity care resources. This commentary explores the expanded role of HECs in charity care allocation, emphasizing the core ethical principles of justice, transparency, and accountability. We discuss the need for HECs to develop expertise in organizational ethics, differentiate between emergency and chronic resource allocation, and apply value-based insurance design principles to set service boundaries. By adopting an egalitarian approach to justice, HECs can help reduce health disparities and ensure equitable access to charity care. Enhanced transparency and accountability through clear criteria, regular audits, and public reporting are also vital. This paper underscores the importance of integrating these ethical principles into healthcare resource allocation to promote health equity and maintain the financial sustainability of healthcare institutions.

Hospice Administrators' and Providers' Perspectives on Providing Upstream Palliative Care: Facilitators, Barriers, and Policy Prescriptions.

Background: Among patients with serious illness, palliative care before hospice enrollment is associated with improved quality of life, reduced symptom burden, and earlier transitions to hospice. However, fewer than half of eligible patients receive specialty palliative care referrals. As most hospice clinicians and administrators have experience in specialty palliative care, several emerging programs propose engaging hospice clinicians to provide early palliative care. Objective: We sought to identify barriers and facilitators to upstream palliative care. Design: We conducted a key informant qualitative study among hospice administrators and clinicians. Setting/Subjects: We conducted semi-structured interviews with 23 hospice administrators and clinicians in eight states from March to August 2022. We identified participants using snowball and purposive sampling using states that participate in Medicare Advantage's value-based insurance design Model. Results: Respondents indicated that barriers to early palliative care included inadequate staffing and reimbursement. Hospice clinicians providing community-based palliative care can address access barriers and improve transitions to hospice. Respondents expressed desire for payer guidance in identifying eligible patients but were cautious about payers acting as direct palliative care providers. However, payers could facilitate uptake by broadening and specifying coverage of services to include goals of care conversations and symptom management. Routine referrals initiated by objective measures could potentially increase access. Conclusions: Utilizing hospice providers to provide upstream palliative care can increase access, improve outcomes, and ease the transition to hospice.

Association of Participation in a Value-Based Insurance Design Program With Health Care Spending and Utilization

Value-based insurance design (VBID) has mostly been used in improving medication use and adherence for certain conditions or patients, but its outcomes remain uncertain when applied to other services and to all health plan enrollees. To determine the association of participation in a California Public Employees' Retirement System (CalPERS) VBID program with its enrollees' health care spending and utilization. A retrospective cohort study with difference-in-differences propensity-weighted 2-part regression models was performed in 2021 to 2022. A VBID cohort was compared with a non-VBID cohort both before and after VBID implementation in California in 2019 with 2 years' follow-up. The study sample included CalPERS preferred provider organization continuous enrollees from 2017 through 2020. Data were analyzed from September 2021 to August 2022. The key VBID interventions include (1) if selecting and using a primary care physician (PCP) for routine care, PCP office visit copayment is $10 (otherwise, PCP office visit copayment is $35 as for specialist visit); and (2) annual deductibles reduced by a half through completion of the following 5 activities: annual biometric screening, influenza vaccine, nonsmoking certification, second opinion for elective surgical procedures, and disease management participation. The primary outcome measures included annual per member total approved payments for multiple inpatient and outpatient services. The 2 compared cohorts of 94 127 participants (48 770 were female [52%]; 47 390 were younger than 45 years old [50%]) had insignificant baseline differences after propensity-weighting adjustment. The VBID cohort had significantly lower probabilities of inpatient admissions (adjusted relative odds ratio [OR], 0.82; 95% CI, 0.71-0.95), and higher probabilities of receiving immunizations (adjusted relative OR, 1.07; 95% CI, 1.01-1.21) in 2019. Among those with positive payments, VBID was associated with higher mean total allowed amounts for PCP visits in 2019 and 2020 (adjusted relative payments ratio, 1.05; 95% CI, 1.02-1.08). There were no significant differences for inpatient and outpatient combined totals in 2019 and 2020. The CalPERS VBID program achieved desired goals for some interventions with no added total costs in its first 2 years of operation. VBID may be used to promote valued services while containing costs for all enrollees.

Why Are Some Value-Based Programs Successful?

Original Investigation Participation in a Value-Based Insurance Design Program and Health Care Spending and Utilization Hui Zhang, PhD; David W. Cowling, PhD

The Diabetes Health Plan and Healthcare Utilization Among Beneficiaries with Low Incomes

BackgroundThe socioeconomic status (SES) gradient in hospital and emergency room utilization among adults with type 2 diabetes (T2DM) is partially driven by cost-related non-adherence.ObjectiveTo test the impact of the Diabetes Health Plan (DHP), a diabetes-specific health plan incorporating value-based insurance design principles on healthcare utilization among low-income adults with T2DM.DesignTo examine the impact of the DHP on healthcare utilization, we employed a difference-in-differences (DID) study design with a propensity-matched comparison group. We modeled count and dichotomous outcomes using Poisson and logit models, respectively.ParticipantsCohort of adults (18–64) with T2DM, with an annual household income <$ 30,000, and who were continuously enrolled in an employer-sponsored UnitedHealthcare plan for at least 2 years between 2009 and 2014.InterventionsThe DHP reduces or eliminates out-of-pocket costs for disease management visits, diabetes-related medicines, and diabetes self-monitoring supplies. The DHP also provides access to diabetes-specific telephone case management as well as other online resources.Main MeasuresNumber of disease management visits (N = 1732), any emergency room utilization (N = 1758), and any hospitalization (N = 1733), within the year.Key ResultsDID models predicting disease management visits suggested that DHP-exposed beneficiaries had 1.7 fewer in-person disease management visits per year (− 1.70 [95% CI: − 2.19, − 1.20], p < 0.001), on average, than comparison beneficiaries. Models for emergency room (0.00 [95% CI: − 0.06, 0.06], p = 0.966) and hospital utilization (− 0.03 [95% CI: − 0.08, − 0.01], p = 0.164) did not demonstrate statistically significant changes associated with DHP exposure.ConclusionsWhile no relationship between DHP exposure and high-cost utilization was observed in the short term, fewer in-person disease management visits were observed. Future studies are needed to determine the clinical implications of these findings.

Does the diabetes health plan have a differential impact on medication adherence among beneficiaries with fewer financial resources?

BACKGROUND: The Diabetes Health Plan (DHP), a value-based insurance plan that reduces cost sharing, was previously shown to modestly increase employer-level medication adherence. It is unclear how the DHP might impact individuals with different incomes. OBJECTIVE: To examine the impact of the DHP on individual-level medication adherence, by income level. METHODS: This is a retrospective, quasiexperimental study. An employer-level propensity score match was done to identify suitable control employers, followed by individual-level propensity score weighing. These weights were applied to difference-in-difference models examining the effect of the DHP and the effect of income on changes in adherence to metformin, statins, and angiotensin-converting enzymes/angiotensin receptor blockers. The weights were then applied to a differences-in-differences-in-differences model to estimate the differential impact of DHP status on changes in adherence by income group. RESULTS: The study population included 2,065 beneficiaries with DHP and 17,704 matched controls. There were no significant differences in changes to adherence for any medications between beneficiaries enrolled in the DHP vs standard plans. However, adherence to all medications was higher among those with incomes greater than $75,000 (year 1: metformin: +7.3 percentage points; statin +4.3 percentage points; angiotensin-converting enzymes/angiotensin receptor blockers: +6.2 percentage points; P < 0.01) compared with those with incomes less than $50,000. The differences-in-differences-in-differences term examining the impact of income on the DHP effect was not significant for any comparisons. CONCLUSIONS: We did not find significant associations between the DHP and changes in individual-level medication adherence, even for low-income beneficiaries. New strategies to improve consumer engagement may be needed to translate value-based insurance designs into changes in patient behavior. DISCLOSURES: Drs Ettner and Moin received grants from the Centers for Disease Control and Prevention and National Institute of Diabetes and Digestive and Kidney Diseases (Principal Investigator: Carol Mangione). Mr Luchs received support for attending meetings and/or travel (minimal-mileage and hotel on 2 occasions). Mr Chan has an employee benefit to purchase stock for UnitedHealth Group.

Value-Based Insurance Design: Clinically Nuanced Consumer Cost Sharing to Increase the Use of High-Value Medications.

Consumer cost sharing is widely employed by payers in the United States in an effort to control spending. Most cost-sharing strategies set patient contributions on the basis of costs incurred by payers and often do not consider medical necessity as a coverage criterion. Available evidence suggests that increases in cost sharing worsen health disparities and adversely affect patient-centered outcomes, particularly among economically vulnerable individuals, people of color, and those with chronic conditions. A key question has been how to better engage consumers while balancing appropriate access to essential services with increasing fiscal pressures. Value-based insurance design (VBID) is a promising approach designed to improve desired clinical and financial outcomes, in which out-of-pocket costs are based on the potential for clinical benefit, taking into consideration the patient's clinical condition. For more than two decades, broad multistakeholder support and multiple federal policy initiatives have led to the implementation of VBID programs that enhance access to vital preventive and chronic disease medications for millions of Americans. A robust evidence base shows that when financial barriers to essential medications are reduced, increased adherence results, leading to improved patient-centered outcomes, reduced health care disparities, and in some (but not most) instances, lower total medical expenditures.

Can Alternative Payment Models And Value-Based Insurance Design Alter The Course Of Diabetes In The United States?

Diabetes process and outcome measures are common quality measures in payment reform models, including Alternative Payment Models (APMs) and value-based insurance design (VBID). In this commentary we review evidence from selected research to examine whether these payment models can improve the value of diabetes care. We found that higher-risk APMs yielded greater improvements in diabetes process measures than lower-risk APMs, and that VBID models appeared to improve medication adherence but not other quality measures. We argue that these models are promising first steps in redesigning the payment system to improve diabetes care. However, greater coordination and alignment across models is needed to enhance their impact on providers' behavior, diabetes care processes, and patient health outcomes.

CO28 Impact of Value-Based Insurance Design on Medication Adherence in Patients with Asthma and/or COPD in an Employee Health Plan: An Interrupted Time Series Analysis

Value-Based Insurance Design (VBID) is intended to incentivize the use of services that are most cost-effective for patient care. One strategy is to reduce patient cost-sharing of medications that are crucial for chronic disease, such as inhalers for asthma and/or chronic obstructive pulmonary disease (COPD). Recently, several benefit changes have been introduced into an employee health plan for a large health system in Texas, including co-pay reductions, deductible elimination, and income-based premium subsidies. This study evaluated the impact of these interventions.

HPR47 Impact of Zero-Dollar Copayment and Premium Changes on Medication Adherence in Diabetic Patients in an Employee Health Group

Value-based insurance design (VBID) lowers out-of-pocket costs for drugs known to improve medical outcomes. Previous studies have evaluated VBID programs that only reduced copays for select medications. The objective of this study was to assess the impact of a zero-dollar copayment policy and lower premiums on adherence in an employee group.

PCR98 The Continued Success of Value-Based Insurance Design (VBID): Blue Cross and Blue Shield of Louisiana's $0 Drug Co-Pay Program

Blue Cross and Blue Shield of Louisiana (BCBSLA) implemented the $0 Drug Co-pay (ZDC) program in 2014 for members with certain chronic conditions (diabetes, chronic heart disease, hypertension, chronic kidney disease, chronic obstructive pulmonary disease and asthma). Designed to reduce financial barriers by offering $0 copay for select drugs commonly prescribed to treat cardiovascular, diabetes, cholesterol, depression, and respiratory conditions, the program has achieved savings and improved medication adherence for these targeted members.

The diabetes health plan and medication adherence among individuals with low incomes.

To test the impact of the Diabetes Health Plan (DHP), a diabetes-specific insurance plan that lowers out-of-pocket costs for diabetes-related medications and clinical visits, on adherence to oral hypoglycemic medications among low-income adults with Type 2 Diabetes (T2DM). Cohort of adults (18-64) with T2DM, an annual household income <USD 30,000, and who were continuously enrolled in an employer-sponsored UnitedHealthcare plan for at least two years between 2009 and 2014. We employed a linear regression Difference-In-Differences (DID) approach with a matched comparison group. To assess for differential DHP effects across adherent versus non-adherent patients, we ran a Difference-in-Difference-in-Differences (DDD) analysis by including an interaction term that included indicators for DHP exposure status and time, and low versus high baseline medication adherence. The analytic data set is limited to employer groups that purchased the DHP and standard benefit plans from UnitedHealthcare, had internal pharmacy contracts; complete pharmacy claims data, and sufficient medical claims and lab data to identify employees and their dependents with T2DM. Our DID analysis did not show improved medication adherence associated with employer DHP adoption. However, the DDD model suggested a difference between DHP-exposed and comparison beneficiaries when comparing the relative effect on individuals who were adherent versus non-adherent at baseline, as suggested by the significant three-way interaction term (10.2,p=0.028). This effect was driven by the 8.2 percentage point increase in medication adherence for the DHP subsample that was non-adherent at baseline. The DHP may benefit low-income patients with low baseline medication adherence. Value-based insurance design may be an important strategy for mitigating income disparities in T2DM outcomes.

Association between medication adherence and non-drug healthcare utilisation and costs: a retrospective longitudinal cohort study among US women age 65 and older

ObjectivesTo explore the association between hormone therapy (HT) adherence and non-drug healthcare utilisation and healthcare costs among patients with breast cancer.DesignRetrospective longitudinal cohort study.SettingThe US Medicare beneficiaries in the SEER-Medicare-linked...

Navigating the high costs of cancer care: opportunities for patient engagement.

Over the past decade, the financial burden of cancer care on patients and their families has garnered increased attention. Many of the potential solutions have focused on system-level interventions such as adopting value-based payment models and negotiating drug prices; less consideration has been given to actions at the patient level to address cancer care costs. We argue that it is imperative to develop and support patient-level strategies that engage patients and consider their preferences, values and individual circumstances. Opportunities to meet these aims and improve the economic experience of patients in oncology are discussed, including: shared decision-making and communication, financial navigation and treatment planning, digital technology and alternative care pathways, and value-based insurance design.

The effect of increased cost-sharing on low-value service use.

We examine the effect of a value-based insurance design (VBID) program implemented at a large public employer in the state of Oregon. The program substantially increased cost-sharing for several healthcare services likely to be of low value for most patients: diagnostic services (e.g., imaging services) and surgeries (e.g., spinal surgeries for pain). Using a difference-in-differences design coupled with granular, administrative health insurance claims data over the period 2008-2012, we estimate the change in low-value service use among beneficiaries before and after program implementation relative to a comparison group not exposed to the VBID. Our findings suggest that the VBID significantly reduced the use of targeted services, with an implied elasticity of demand of -0.22. We find no evidence that the VBID led to substitution to non-targeted services or increased overall healthcare costs. However, we also observe no evidence that the program led to cost-savings.

Incorporating Value-Based Care Into Oncology.

Value-based care within insurance design utilizes evidence-based medicine as a means of defining high-value versus low-value diagnostics and treatments. The goals of value-based care are to shift spending and coverage toward high-value care and reduce the use of low-value practices. Within oncology, several value-based methods have been proposed and implemented. We review value-based care being used within oncology, including defining the value of oncology drugs through frameworks, clinical care pathways, alternative payment models including the Oncology Care Model, value-based insurance design, and reducing low-value care including the Choosing Wisely initiatives.

Value-based insurance design in Louisiana: Blue Cross Blue Shield's Zero Dollar Co-pay program.

To determine whether a program that eliminated pharmacy co-pays, the Blue Cross Blue Shield of Louisiana (BCBSLA) Zero Dollar Co-pay (ZDC) program, decreased health care spending. Previous studies have found that value-based insurance designs like the ZDC program have little or no impact on total health care spending. ZDC included an expansive set of medications related to 4 chronic diseases rather than a limited set of medications for 1 or 2 chronic diseases. Additionally, ZDC focused on the most at-risk patients. ZDC began in 2014 and enrolled patients over time based on (1) when a patient answered a call from a nurse care manager and (2) when a patient or their employer changed the benefit structure to meet the program criteria. During 2015 and 2016, 265 patients with at least 1 chronic condition (asthma, diabetes, hypertension, mental illness) enrolled in ZDC. Observational study using within-patient variation and variation in patient enrollment month to identify the impact of the ZDC program on health spending measures. We used 100% BCBSLA claims data from January 2015 to June 2018. Monthly level event studies were used to test for differential spending patterns prior to ZDCenrollment. We found that total spending decreased by $205.9 (P = .049) per member per month, or approximately 18%. We saw a decrease in medical spending ($195.0; P = .023) but did not detect a change in pharmacy spending ($7.59; P = .752). We found no evidence of changes in spending patterns prior to ZDC enrollment. The ZDC program provides evidence that value-based insurance designs that incorporate a comprehensive set of medications and focus on populations with chronic disease can reduce spending.

What happens to drug use and expenditure when cost sharing is completely removed? Evidence from a Canadian provincial public drug plan

ObjectivesThe role of cost-sharing for medicines is under active policy discussion, including in proposals for value-based insurance design. To inform this debate, we estimated the impact of completely removing cost-sharing on medication use and expenditure using a quasi-experimental approach. MethodsFair PharmaCare, British Columbia’s income-based public drug plan, includes a household out-of-pocket limit. Therefore, when one household member starts a long-term high-cost drug surpassing this maximum, cost-sharing is completely removed for other family members. We used an interrupted time series design to estimate monthly prescriptions and expenditures of other household members, 24 months before and after cost-sharing removal. ResultsWe studied 2191 household members newly free of cost-sharing requirements, most of whom had lower incomes. R emoving cost-sharing increased the level of drug expenditure and prescription numbers by 16 and 19%, respectively (i.e. $2659.43 (95%$1507.27–$3811.59, p < 0.001); 50.0 (95%CI 25.1–74.9, p < 0.001)) relative to prior expenditures and utilization without changing pre-existing trends. Much of this change was driven by 533 individuals initiating medication for the first time after cost-sharing removal. This initiation substantially increased average expenditure, especially for antiviral agents. ConclusionsCompletely removing cost-sharing, independent of health status, significantly increased medication use and expenditure particularly due to medicine initiation by new users. While costs may be preventing use, the appropriateness of additional use, especially among new users, is unclear.

Preventive drug lists as tools for managing asthma medication costs.

Preventive drug lists (PDLs) are a value-based insurance design intended to help high-deductible health plan (HDHP) members by covering preventive medications at lower or no cost before deductibles are met. Because little is known about members' experiences using this new tool, we sought to evaluate benefits and challenges of using PDLs to manage asthma costs. Qualitative interview study. In 2018, we conducted telephone interviews with US adults (n = 22) who (1) were in HDHPs with PDLs and (2) had asthma and/or a child with asthma. We analyzed data using thematic content analysis. Some members reported that PDLs provided financial benefit and facilitated adherence to preventive medications. Others experienced barriers to using PDLs. Notably, some PDLs did not include members' asthma medications or provided only modest cost coverage due to restrictions in underlying formulary structures. Members who were aware of having a PDL sometimes worked with their providers to switch to listed medications. However, many members were not aware of having a PDL. Finally, because PDLs did not cover nonmedication costs, some members still struggled to afford asthma care. PDLs are a promising tool for helping families in HDHPs manage their medication costs and, in turn, their asthma. However, given current limitations in coverage, members must be aware of the benefit to seek out listed medications, and they may still struggle with the remaining cost sharing. Attention to implementation, including member outreach and education, is likely needed to realize the full potential of PDLs.