Value-Based Insurance Design: Clinically Nuanced Consumer Cost-Sharing for Mental Health Services.

BACKGROUND: While consumer cost-sharing is a widely used strategy to mitigate health care spending, numerous studies have demonstrated that even modest levels of out-of-pocket cost are associated with lower use of medical care, including clinically necessary, high-value services. Within mental health care, increases in cost-sharing are associated with reductions in use of mental health care and psychotropic medication use. Further, these reductions in mental health services and treatments can lead to downstream consequences including worsening of psychiatric illness and increased need for acute care and psychiatric hospitalization. Thus, there is a need for clinically informed solutions that explicitly balance the need for appropriate access to essential mental health services and treatments with growing fiscal pressures faced by public and private payers. Value-Based Insurance Design (VBID) describes a model where consumer cost-sharing is based on the potential clinical benefit rather than the price of a specific health care service or treatment. AIMS OF THE STUDY: Describe value-based insurance design and applications in mental health care. RESULTS, DISCUSSION AND IMPLICATIONS FOR HEALTH POLICIES: For over two decades, clinically nuanced VBID programs have been implemented in an effort to optimize the use of high-value health services and enhance equity through reduced consumer cost-sharing. Overall, the evidence suggests that VBID has demonstrated success in reducing consumer out-of-pocket costs associated with specific, high value services. By reducing financial barriers to essential clinical services and medications, VBID has potential to enhance equity. However, the impact of VBID on overall mental health care spending and clinical outcomes remains uncertain.

Cost-Sharing Increase, Medication Adherence, and Hospitalizations in Schizophrenia Patients: A Natural Experiment.

Increases in medication cost-sharing rates remain a controversial system-wide cost-containment measure for chronic mental health patients. The objective was to investigate the effects of cost-sharing increases on adherence to prescribed antipsychotic medication and psychiatric hospitalizations among patients with schizophrenia. In July 2012, a Spanish National Law raised the cost-sharing rate from 0 to 10% for pensioner outpatient medication while cost-sharing remained at 0% for other socioeconomic groups. To estimate the effects of the reform, we analyzed the prevalent adult schizophrenic population of Valencia, Spain, followed up 1 year before and after the Law took effect. We used a quasi-experimental design with a patient fixed-effects difference-in-differences regression to evaluate the reform effects on antipsychotic medication adherence, prescription, and hospitalization rates. A total of 5,672 included patients were exposed to the reform, whereas 5,545 were not. There were no differences in adherence, prescription, or hospitalization rates between exposed and nonexposed patients prior to its implementation. The odds ratio of exposed patients remaining adherent to issued prescriptions after the reform took effect were 0.70 99% confidence interval (CI 0.66-0.75), in relation to the nonexposed group. Additionally, the reform was associated with a reduction in exposure to antipsychotic medication (odds ratio (OR) 0.85, 99%CI 0.83-0.88) and an increase in hospitalization risk (OR 1.13, 99% CI 1.05-1.23) during the first year after implementation. Policies raising the cost-sharing rate of medication for patients with schizophrenia are simultaneously associated with unintended effects. We report decreases in antipsychotic exposure and increases in hospitalization rates that lasted for 1 year after follow-up.

Cost sharing for breast cancer hormone therapy: How do dual eligible patients' copayment impact adherence.

OBJECTIVE: To examine the different levels of copayment assistance and treatment adherence among Medicare and Medicaid dual eligible beneficiaries with breast cancer in the U.S. RESEARCH DESIGN: Propensity Score methodology was adopted to minimize potential selection bias from the nonrandom allocation of the treatment group (i.e., full Medicaid beneficiaries) and control group (i.e., Medicare Savings Programs [MSPs] beneficiaries). Longitudinal hierarchical model and Cox proportional-hazard model were adopted to examine patients' adherence over their full five-year course of adjuvant hormone therapy. RESULTS: Our study cohort consisted of 1,133 dual eligible beneficiaries diagnosed with hormone receptor-positive early stage breast cancer in years 2007 -mid 2009. About 80.5% of them received MSPs benefits, while the rest received full Medicaid benefits. On average for a standardized 30-day hormone therapy medication, full Medicaid beneficiaries spent $0.5-$2.0 and MSP beneficiaries spent $1.4-$4.8 in copayment. After adjusting for other factors, this copayment reduction wasn't associated with a significantly better adherence. However, when the catastrophic coverage threshold was reached (copayments reduced to zero), significant improvement in adherence was found in both groups. CONCLUSIONS: Our study found that small amount of cost-sharing reduction did not affect Medicare and Medicaid dual eligible patients' medication treatment adherence, however, the elimination of cost-sharing (even a minimal amount) was associated with improved adherence. Future legislative and advocacy efforts should be paid on eliminating cost sharing for dual eligibles, and possibly even a broader group of financially vulnerable patients.

An investigation of health insurance policy and behavior in a virtual environment.

We introduce a new experimental approach to measuring the effects of health insurance policy alternatives on behavior and health outcomes over the life course. In a virtual environment with multi-period lives, subjects earn virtual income and allocate spending, to maximize utility, which is converted into cash payment. We compare behavior across age, income and insurance plans-one priced according to an individual's expected cost and the other uniformly priced through employer-implemented cost sharing. We find that 1) subjects in the employer-implemented plan purchased insurance at higher rates; 2) the employer-based plan reduced differences due to income and age; 3) subjects in the actuarial plan engaged in more health-promoting behaviors, but still below optimal levels, and did save at the level required, so did realize the full benefits of the plan. Subjects had more difficulty optimizing choices in the Actuarial treatment, because it required more long term planning and evaluating benefits that compounded over time. Contrary, to model predictions, the actuarial priced insurance plan did not increase utility relative to the employer-based plan.

Does Medicaid coverage of Medicare cost sharing affect physician care for dual-eligible Medicare beneficiaries?

OBJECTIVE: To assess changes in physicians' provision of care to duals (low-income individuals with Medicare and Medicaid) in response to a policy that required Medicaid to fully pay Medicare's cost sharing for office visits with these patients. This policy-a provision of the Affordable Care Act-effectively increased payments for office visits with duals by 0%-20%, depending on the state, in 2013 and 2014. DATA SOURCES: Fee-for-service claims for a 5% random sample of Medicare beneficiaries in 2010-2016. STUDY DESIGN: We conducted a difference-in-differences analysis to compare changes in office visits among Qualified Medicare Beneficiaries (QMBs)-the largest subpopulation of duals for whom payment rates were affected by this policy-to changes among other low-income Medicare beneficiaries for whom payment rates were unaffected (pooled across all states). Next, we conducted a triple-differences analysis that compared changes between QMBs and other low-income beneficiaries in 33 states with payment rate increases of approximately 20% to analogous changes in 14 states without payment increases. DATA COLLECTION: The study included administrative Medicare enrollment and claims data for QMBs and a comparison group of other low-income Medicare beneficiaries (1 914 073 beneficiary-years from 2010 to 2016). PRINCIPAL FINDINGS: Nationally, we did not find a differential increase in office visits among QMBs versus other low-income beneficiaries that coincided with this payment change. In the triple-differences analysis, we did not observe a greater increase in visits among QMBs vs other low-income beneficiaries in states where the policy resulted in large (approximately 20%) increases in payment rates vs states where payment rates were unaffected (triple-differences estimate: -0.12 annual visits, 95% CI: -0.28, 0.04; P = 0.15). CONCLUSIONS: Physicians' provision of care to low-income Medicare beneficiaries may not be responsive to short-run payment changes.

Savings or Selection? Initial Spending Reductions in the Medicare Shared Savings Program and Considerations for Reform.

Policy Points Concerns have been raised about risk selection in the Medicare Shared Savings Program (MSSP). Specifically, turnover in accountable care organization (ACO) physicians and patient panels has led to concerns that ACOs may be earning shared-savings bonuses by selecting lower-risk patients or providers with lower-risk panels. We find no evidence that changes in ACO patient populations explain savings estimates from previous evaluations through 2015. We also find no evidence that ACOs systematically manipulated provider composition or billing to earn bonuses. The modest savings and lack of risk selection in the original MSSP design suggest opportunities to build on early progress. Recent program changes provide ACOs with more opportunity to select providers with lower-risk patients. Understanding the effect of these changes will be important for guiding future payment policy. CONTEXT: The Medicare Shared Savings Program (MSSP) establishes incentives for participating accountable care organizations (ACOs) to lower spending for their attributed fee-for-service Medicare patients. Turnover in ACO physicians and patient panels has raised concerns that ACOs may be earning shared-savings bonuses by selecting lower-risk patients or providers with lower-risk panels. METHODS: We conducted three sets of analyses of Medicare claims data. First, we estimated overall MSSP savings through 2015 using a difference-in-differences approach and methods that eliminated selection bias from ACO program exit or changes in the practices or physicians included in ACO contracts. We then checked for residual risk selection at the patient level. Second, we reestimated savings with methods that address undetected risk selection but could introduce bias from other sources. These included patient fixed effects, baseline or prospective assignment, and area-level MSSP exposure to hold patient populations constant. Third, we tested for changes in provider composition or provider billing that may have contributed to bonuses, even if they were eliminated as sources of bias in the evaluation analyses. FINDINGS: MSSP participation was associated with modest and increasing annual gross savings in the 2012-2013 entry cohorts of ACOs that reached $139 to $302 per patient by 2015. Savings in the 2014 entry cohort were small and not statistically significant. Robustness checks revealed no evidence of residual risk selection. Alternative methods to address risk selection produced results that were substantively consistent with our primary analysis but varied somewhat and were more sensitive to adjustment for patient characteristics, suggesting the introduction of bias from within-patient changes in time-varying characteristics. We found no evidence of ACO manipulation of provider composition or billing to inflate savings. Finally, larger savings for physician group ACOs were robust to consideration of differential changes in organizational structure among non-ACO providers (eg, from consolidation). CONCLUSIONS: Participation in the original MSSP program was associated with modest savings and not with favorable risk selection. These findings suggest an opportunity to build on early progress. Understanding the effect of new opportunities and incentives for risk selection in the revamped MSSP will be important for guiding future program reforms.

Timely Postpartum Visits for Low-Income Women: A Health System and Medicaid Payer Partnership.

A health care system and a Medicaid payer partnered to develop an educational intervention and payment redesign program to improve timely postpartum visits for low-income, high-risk mothers in New York City between April 2015 and October 2016. The timely postpartum visit rate was higher for 363 mothers continuously enrolled in the program than for a control group matched by propensity score (67% [243/363] and 56% [407/726], respectively; P < .001). An innovative partnership between a health care system and Medicaid payer improved access to health care services and community resources for high-risk mothers.

Reduced Cost-sharing for Preventive Drugs Preferentially Benefits Low-income Patients With Diabetes in High Deductible Health Plans With Health Savings Accounts.

BACKGROUND: High deductible health plans linked to Health Savings Accounts (HSA-HDHPs) must include all care under the deductible except for select preventive services. Some employers and insurers have adopted Preventive Drug Lists (PDLs) that exempt specific classes of medications from deductibles. OBJECTIVE: The objective of this study was to examine the association between shifts to PDL coverage and medication utilization among patients with diabetes in HSA-HDHPs. RESEARCH DESIGN: A natural experiment comparing pre-post changes in monthly and annual outcomes in matched study groups. SUBJECTS: The intervention group included 1744 commercially-insured HSA-HDHP patients with diabetes age 12-64 years switched by employers to PDL coverage; the control group included 3349 propensity-matched HSA-HDHP patients whose employers offered no PDL. MEASURES: Outcomes were out-of-pocket (OOP) costs for medications and the number of pharmacy fills converted to 30-day equivalents. RESULTS: Transition to the PDL was associated with a relative pre-post decrease of $612 (-35%, P<0.001) per member OOP medication expenditures; OOP reductions were higher for key classes of antidiabetic and cardiovascular medicines listed on the PDL; the policy did not affect unlisted classes. The PDL group experienced relative increases in medication use of 6.0 30-day fills per person during the year (+11.2%, P<0.001); the increase was more than twice as large for lower-income (+6.6 fills, +12.6%, P<0.001) than higher-income (+3.0 fills, +5.1%, P=0.024) patients. CONCLUSION: Transition to a PDL which covers important classes of medication to manage diabetes and cardiovascular conditions is associated with substantial annual OOP cost savings for patients with diabetes and increased utilization of important classes of medications, especially for lower-income patients.

Power of 1 Malaysian Ringgit: A Low-Cost Prescription Cost-Sharing Model in Malaysia.

OBJECTIVES: To calculate the total revenue under a hypothetical 1 Malaysian Ringgit (MYR) prescription cost sharing model in government healthcare facilities in Pahang, Malaysia. METHODS: A cross-sectional study was conducted at outpatient pharmacy in all government healthcare facilities in Pahang from year 2013 to 2017. Each dispensed medication was calculated as 1 MYR and contributed to the total revenue. RESULTS: A total of 11 hospitals and 81 health clinics were recruited into the study. A hospital could generate 0.311 million MYR per year, and a district health department could generate 0.623 million MYR per year, giving a total of 10.268 million MYR revenue every year in Pahang, Malaysia. Under the prescription medicines cost sharing scheme, it was shown that an average of 9.4% of the total pharmaceutical spending could be recovered. The recovery percentage was approximately fourfold higher in health clinics (16.5%-21.7%) when compared with that in hospitals (4.3%-5.2%). CONCLUSION: An estimated 10 million MYR or 10% from the total Ministry of Health pharmaceutical spending could be collected under the proposed 1 MYR prescription cost sharing model.

Preventive drug lists as tools for managing asthma medication costs.

OBJECTIVES: 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. STUDY DESIGN: Qualitative interview study. METHODS: 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. RESULTS: 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. CONCLUSIONS: 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.

Physician and Patient Adjustment to Reference Pricing for Drugs.

Importance: Reference pricing has been shown to reduce drug spending in Europe and has been adopted by some employers and labor unions in the United States. Its association with patient cost sharing depends on whether and how quickly physicians adjust their prescribing patterns to favor the least costly alternatives within each therapeutic class. Objective: To examine whether the implementation of reference pricing is associated with physicians and patients shifting to lower-cost drugs, thereby reducing consumer cost sharing and the prices paid by employers. Design, Setting, and Participants: This economic evaluation included employees of Catholic organizations who purchased health insurance through the Reta Trust and a random sample of employees of public sector organizations who purchased insurance through the California Public Employees' Retirement System (CalPERS) as a comparison group between July 1, 2010, and December 31, 2017. Data analysis was performed from January 1, 2019, to September 1, 2019. Exposures: The Reta Trust implemented reference pricing in July 2013; CalPERS did not adopt reference pricing during the study period. Main Outcomes and Measures: Probability that the drug prescribed was the least costly alternative within its therapeutic class, price paid per prescription, and patient cost sharing per prescription. Multivariable, difference-in-differences regression analysis of drug insurance claims was performed for patients before and after implementation of reference pricing, adjusted for patient characteristics, each drug's therapeutic class, and the month and year of the prescription. Results: During the study period, a total of 1.2 million prescriptions were submitted by 34 319 individuals covered by Reta Trust and 2.1 million prescriptions were submitted by 738 159 individuals covered by CalPERS. In the first 2.5 years after implementation of reference pricing, the percentage of prescriptions made for the low-priced drug within each therapeutic class increased by 5.1 percentage points (95% CI, 1.8 to 8.4 percentage points), patient cost sharing increased by 10.3% (95% CI, -1.6% to -23.6%; this difference was not statistically significant), and prices paid decreased by 19.1% (95% CI, -30.2% to -6.2%) for Reta Trust patients compared with CalPERS patients. During the subsequent 2-year postimplementation period, the percentage of prescriptions made for the low-priced drug increased an additional 6.2 percentage points (95% CI, 2.3 to 10.1 percentage points), patient cost sharing decreased by 21.3% (95% CI, -31.2% to -9.9%), and prices paid increased by 7.2% (95% CI, -12.6% to 31.4%; this difference was not statistically significant). Relative to the change experienced by the CalPERS population, during the study period, the share of prescriptions for lower-priced drugs increased by 6.3 percentage points (8.9% relative increase), the mean prescription drug price decreased by $9.5 (12.1% relative decrease), and the mean patient cost sharing decreased by $1.8 (4.3% relative decrease). Conclusions and Relevance: In this study, reference pricing was associated with a combination of lower prices paid by employers and lower cost sharing by employees but with a time lag in prescribing habits by physicians.

Offset Effects of Outpatient Cost-sharing for the Poor in Korea.

OBJECTIVE: The objective of this study was to evaluate the impacts of the implementation of patient cost-sharing for an outpatient visit and prescription drugs for poor and nonable bodied Koreans in 2007. DATA SOURCES/STUDY SETTINGS: Nationally-representative longitudinal data sets (Korea Welfare Panel Study and the Korean Longitudinal Study of Ageing) in 2006, 2008, and 2010. RESEARCH DESIGN: Propensity score matching with difference-in-differences framework exploiting within-person variation in cost-sharing. RESULTS: Decreases in the probability of outpatient visit are offset by increases in the likelihood of hospitalization after the policy change. Cost-sharing also decreases drug adherence by 20%, particularly among chronically-ill persons. CONCLUSION: Because the costs of increased hospitalization among Medical Aid enrollees accrue to the government, the introduction of outpatient cost-sharing does not achieve the goal of cost control.

Impacts of shifting responsibility for high-cost individuals on Health Insurance Exchange plan premiums and cost-sharing provisions.

Insurance companies can respond to increases in expected per-capita healthcare expenditures by adjusting premiums, cost-sharing requirements, and/or plan generosity. We use a Difference-in-Difference model with Plan-level Fixed Effects to estimate the impacts of increases in expected expenditures generated by closure of state-operated High Risk Pools (HRPs). For Silver plans, we find that issuers responded to HRP closures by increasing both premiums and deductibles, and by increasing the ratios of premiums to deductibles. This adjustment to the structure of plan prices is consistent with the hypothesis that issuers will be reluctant to adjust deductibles, because consumers tend to overweight changes in deductibles over changes in premiums. The increase in the ratio of premiums to deductibles indicates that the increase in expected expenditures triggered an increase in the share of total risk-pool healthcare expenditures paid by low healthcare utilizers, and a decrease in the share paid by high utilizers.

Determining the Comparative Value of Pharmaceutical Risk-Sharing Policies in Non-Small Cell Lung Cancer Using Real-World Data.

BACKGROUND: Risk-sharing arrangements (RSAs) can be used to mitigate uncertainty about the value of a drug by sharing the financial risk between payer and pharmaceutical company. We evaluated the projected impact of alternative RSAs for non-small cell lung cancer (NSCLC) therapies based on real-world data. METHODS: Data on treatment patterns of Dutch NSCLC patients from four different hospitals were used to perform "what-if" analyses, evaluating the costs and benefits likely associated with various RSAs. In the scenarios, drug costs or refunds were based on response evaluation criteria in solid tumors (RECIST) response, survival compared to the pivotal trial, treatment duration, or a fixed cost per patient. Analyses were done for erlotinib, gemcitabine/cisplatin, and pemetrexed/platinum for metastatic NSCLC, and gemcitabine/cisplatin, pemetrexed/cisplatin, and vinorelbine/cisplatin for nonmetastatic NSCLC. RESULTS: Money-back guarantees led to moderate cost reductions to the payer. For conditional treatment continuation schemes, costs and outcomes associated with the different treatments were dispersed. When price was linked to the outcome, the payer's drug costs reduced by 2.5% to 26.7%. Discounted treatment initiation schemes yielded large cost reductions. Utilization caps mainly reduced the costs of erlotinib treatment (by 16%). Given a fixed cost per patient based on projected average use of the drug, risk sharing was unfavorable to the payer because of the lower than projected use. The impact of RSAs on a national scale was dispersed. CONCLUSIONS: For erlotinib and pemetrexed/platinum, large cost reductions were observed with risk sharing. RSAs can mitigate uncertainty around the incremental cost-effectiveness or budget impact of drugs, but only when the type of arrangement matches the setting and type of uncertainty.

Health insurance literacy: A mixed methods study of college students.

Objective: This study examines the health insurance literacy, or the ability to use health insurance effectively, of college students. Participants: A total of 455 students from a large, public university completed an online questionnaire in November 2016. Methods: A questionnaire examined students' knowledge of commonly encountered health insurance terms and ability to apply that knowledge to determine cost-sharing in a clinical setting. Results: The majority of students were able to correctly identify the most commonly encountered terms, but could not identify terms related to plan types and options. Eighty-eight percent of students could not determine their cost-sharing for two presented scenarios. Approximately half of the students indicated they had been confused about their health insurance plan, with one-quarter of students stopping or delaying medical care due to confusion. Conclusions: Outreach and education for students should target specific deficits in knowledge such as those identified in this study.

Cost Sharing of Disease-Modifying Treatments (DMTs) as Policy Lever to Improve DMTs' Access in Multiple Sclerosis.

OBJECTIVES: To understand the nonlinear relationship between out-of-pocket (OOP) payments and disease-modifying treatment (DMT) use and adherence, primarily to pinpoint the threshold at which the use of DMTs becomes price sensitive. METHODS: Individuals with more than two multiple sclerosis (MS) diagnoses (International Classification of Diseases, Ninth Revision code 340) were identified from the MarketScan database (2006-2009). Heterogeneity in treatment was normalized by calculating an annual OOP payment as the average OOP payment for purchasing a fixed basket of DMTs at the insurance plan level. A local linear regression with a model-based recursive partitioning algorithm was applied to explore the relationship between OOP and consequently lower DMT use and adherence as measured by days covered by DMT. RESULTS: We identified the inflection points in annual OOP payments as $442 for DMT use and $890 for DMT adherence. For patients with annual OOP payments of more than $442, a $100-increase in OOP payment was associated with a decline of 0.6% in DMT use; for annual OOP payments of more than $890, a $100-increase in OOP payment was associated with two fewer days of DMT treatments. CONCLUSIONS: Although the use of DMTs and DMT adherence appeared unassociated with OOP payment below $442 and $890, respectively, an excessive OOP payment was a barrier to DMT access. This information can inform maximum monthly and yearly payment caps when designing valued-based insurance plans.

Firm responses to targeted consumer incentives: Evidence from reference pricing for surgical services.

This paper examines how health care providers respond to a reference pricing insurance program that increases consumer cost sharing when consumers choose high-priced surgical providers. We use geographic variation in the population covered by the program to estimate supply-side responses. We find limited evidence of market segmentation and price reductions for providers with baseline prices above the reference price. Finally, approximately 75% of the reduction in provider prices is in the form of a positive externality that benefits a population not subject to the program.