Can Value-Based Insurance Impose Societal Costs?

Sep 1, 2014, 00:00 AM
Section Title : Brief Reports
Section Order : 12
First Page : 749


Among policy alternatives considered to reduce health care costs and improve outcomes, value-based insurance design (VBID) has emerged as a promising option. Most applications of VBID, however, have not used higher cost sharing to discourage specific services. In April 2011, the state of Oregon introduced a policy for public employees that required additional cost sharing for high-cost procedures such as total knee arthroplasty (TKA).


Our objectives were to estimate the societal impact of higher co-pays for TKA using Oregon as a case study and building on recent work demonstrating the effects of knee osteoarthritis and surgical treatment on employment and disability outcomes.


We used a Markov model to estimate the societal impact in terms of quality of life, direct costs, and indirect costs of higher co-pays for TKA using Oregon as a case study.


We found that TKA for a working population can generate societal benefits that offset the direct medical costs of the procedure. Delay in receiving surgical care, because of higher co-payment or other reasons, reduced the societal savings from TKA.


We conclude that payers moving toward value-based cost sharing should consider consequences beyond direct medical expenses.
HEOR Topics :
  • Health Policy & Regulatory
  • Insurance Systems & National Health Care
  • Musculoskeletal Disorders
  • Reimbursement & Access Policy
  • Specific Diseases & Conditions
Tags :
  • cost sharing
  • societal benefits
  • total knee replacement
  • value-based insurance design
Regions :
  • North America