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The effect of increased cost‐sharing on low‐value service use
Author(s) -
Gruber Jonathan,
Maclean Johanna Catherine,
Wright Bill,
Wilkinson Eric,
Volpp Kevin G.
Publication year - 2020
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.4127
Subject(s) - cost sharing , business , public health insurance , price elasticity of demand , health care , health services , health insurance , actuarial science , value (mathematics) , service (business) , marketing , medicine , economics , microeconomics , nursing , environmental health , computer science , population , economic growth , machine learning
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.