The Value of Value Based Insurance Design

With the cost of health care expenditures continuing to rise in the United States, one proposed solution has been the implementation of a non-traditional model of insurance coverage termed Value Based Insurance Design (VBID). The principle idea behind VBID is to encourage patients to utilize what are deemed “high value” services and reduce certain “low value” services in an attempt to reduce the cost of care by focusing on better health outcomes. 

In a recent study, researchers set out to determine whether introducing VBID to a population in the form of removing cost-sharing for primary care office visits would increase the utilization rate of this high value service. Subsequently, they evaluated whether or not there was a net reduction in health care expenditure attributable to the introduction of VBID in the population. To evaluate these possibilities, a quasi-experimental study with difference-in-differences (DID) was performed using 6 years of medical claims data from a large insurance provider. Two cohorts (VBID and control) of 25,725 individuals each were established and propensity score matched, with the experimental VBID cohort arising from the decision of a large employer to remove cost sharing for physician office visits for its employees. 

The results were mixed. When evaluating the frequency with which patients utilized physician office visits, there was a 2.6% increase in the VBID cohort compared to a 1.7% increase in utilization in the control cohort (DID 0.9%). However, this finding did not rise to an adequate level of statistical significance. Upon evaluation of health care costs, VBID constrained total medical spending compared to the control group as spending only increased 12.2% compared to the 17.3% annual increase the control experienced (DID -5.1%). Other results of the study found a significant increase in the utilization of office visits and a significant decrease in ED visits (a low value service when used for primary care treatable events). However, these favorable results were only found among the 51 to 64-year-old cohort. 

Overall, it appears that although VBID was not successful in producing a discernible increase in physician office visits, a benefit in health care cost reduction was determined to be present. Precisely how VBID reduces overall costs remains a mystery. 

This Health Policy Journal Club review is written by Ryan Nowrouzi as part of our collaboration with the Health Policy Journal Club at Baylor College of Medicine where he is a medical student.

Abstract

OBJECTIVES: To evaluate the impact of value-based insurance design (VBID), which removed patient cost sharing for primary care visits, on healthcare spending in a large, geographically diverse employer.

STUDY DESIGN: Quasi-experimental, difference-in-differences (DID) design, administrative claims-based study.

METHODS: Healthcare spending during the preintervention period (2008 and 2009) was compared with the postintervention period (2011 through 2014) to measure the impact of removing primary care cost sharing. The study population included Anthem commercially insured enrollees with continuous medical eligibility from 2008 to 2014 who were younger than 65 years. The VBID cohort included health plan enrollees from a national large employer that implemented the benefit change. The comparison cohort included other Anthem enrollees who did not have a similar benefit change and were propensity score-matched to the VBID cohort. Utilization of various types of healthcare services was also examined.

RESULTS: The VBID cohort experienced a $12.0 per member per month relative reduction in overall spending compared with the comparison cohort (P = .02). The trend was driven by reductions in expenditures for emergency department (ED) visits ($1.3 relative reduction; DID, -10.0%; P = .03) and other outpatient services ($7.6 relative reduction; DID, -5.8%; P = .02), which aligned with reduced utilization of ED visits (DID, -4.5%; P = .07) and other outpatient services (DID, -4.1%; P = .004). For physician office visits, the VBID cohort did not experience a significant relative increase compared with the comparison cohort (DID, 0.9%; P = .25).

CONCLUSIONS: The attempt to increase primary care access by reducing cost sharing did not produce a negative outcome in terms of total spending for healthcare.

PMID: 31120716

Ma, Q, et al. Am J Managed Care. 2019; 25 (5): 221-227.