Can broader diffusion of value-based insurance design increase benefits from US health care without increasing costs? Evidence from a computer simulation model.

Background: Evidence suggests that cost sharing (i.e.,copayments and deductibles) decreases health expenditures but also reduces essential care. Value-based insurance design (VBID) has been proposed to encourage essential care while controlling health expenditures. Our objective was to estimate the impact of broader diffusion of VBID on US health care benefits and costs.

Methods And Findings: We used a published computer simulation of costs and life expectancy gains from US health care to estimate the impact of broader diffusion of VBID. Two scenarios were analyzed: (1) applying VBID solely to pharmacy benefits and (2) applying VBID to both pharmacy benefits and other health care services (e.g., devices). We assumed that cost sharing would be eliminated for high-value services (<$100,000 per life-year), would remain unchanged for intermediate- or unknown-value services ($100,000-$300,000 per life-year or unknown), and would be increased for low-value services (>$300,000 per life-year). All costs are provided in 2003 US dollars. Our simulation estimated that approximately 60% of health expenditures in the US are spent on low-value services, 20% are spent on intermediate-value services, and 20% are spent on high-value services. Correspondingly, the vast majority (80%) of health expenditures would have cost sharing that is impacted by VBID. With prevailing patterns of cost sharing, health care conferred 4.70 life-years at a per-capita annual expenditure of US$5,688. Broader diffusion of VBID to pharmaceuticals increased the benefit conferred by health care by 0.03 to 0.05 additional life-years, without increasing costs and without increasing out-of-pocket payments. Broader diffusion of VBID to other health care services could increase the benefit conferred by health care by 0.24 to 0.44 additional life-years, also without increasing costs and without increasing overall out-of-pocket payments. Among those without health insurance, using cost saving from VBID to subsidize insurance coverage would increase the benefit conferred by health care by 1.21 life-years, a 31% increase.

Conclusion: Broader diffusion of VBID may amplify benefits from US health care without increasing health expenditures.