Evidence that value-based insurance can be effective

Michael E. Chernew, Harvard Medical School
Iver A. Juster, Health Informatics
Mayur R. Shah, Health Economics
Arnold Wegh, Active Health Management
Stephen N. Rosenberg, Health Informatics
Allison B. Rosen, University of Massachusetts Medical School
Michael C. Sokol, GlaxoSmithKline
Kristina Yu-Isenberg, GlaxoSmithKline
A. Mark Fendrick, University of Michigan Health Systems

Abstract

Value-based insurance design reduces patient copayments to encourage the use of health care services of high clinical value. As employers face constant pressure to control health care costs, this type of coverage has received much attention as a cost-savings device. This paper's examination of one value-based insurance design program found that the program led to reduced use of nondrug health care services, offsetting the costs associated with additional use of drugs encouraged by the program. The findings suggest that value-based insurance design programs do not increase total systemwide medical spending.