The effect of increased cost‐sharing on low‐value service use. (20th July 2020)

• Record Type: Journal Article
• Authors: Gruber, Jonathan; Maclean, Johanna Catherine; Wright, Bill; Wilkinson, Eric; Volpp, Kevin G.
• Is Part Of: Health economics. Volume 29:Number 10(2020)
• Page Start: 1180
• Page End: 1201
• Publication Date: 2020-07-20
• Subjects: healthcare -- low value -- value‐based insurance design -- cost‐sharing; Medical economics -- Periodicals; Economics, Medical -- Periodicals; Health Care Costs -- Periodicals; Health Policy -- economics -- Periodicals; Health Services -- economics -- Periodicals; 362.1
• DOI: 10.1002/hec.4127
• Languages: English
• ISSNs: 1057-9230

Abstract

Abstract: 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.