“When done right, insurance design is perhaps one of the most impactful tools we have to engage patients in their care,” says Niteesh Choudhry, founding Executive Director of the Center for Healthcare Delivery Sciences at Brigham and Women’s Hospital. Out-of-pocket costs are intended to make us think before we consume, says Choudhry, and therefore reduce our use of low-value services. This is effective, but there is an unintended consequence: being unable to determine which service is more important reduces the use of valuable services.
An alternative approach? Value-based insurance design. Through this model, cost sharing is low for services of high clinical value and high for services of low clinical value, explicitly creating incentives for patients to use valuable services. To show how well this can work, Choudhry describes a study conducted by his group in which heart-attack patients were randomized to receive evidence-based medications for free, or through their usual insurance coverage. Changing this benefit design — and nothing else — improved medication adherence and reduced clinical events and patient out-of-pocket spending.
“Perhaps one of the more important findings of this study was its impact on racial and ethnic disparities,” says Choudhry. His group divided study results based on whether patients reported their race or ethnicity as white or nonwhite. They found that the intervention had little impact for those who self-reported as white, but it had a major impact on those of nonwhite race or ethnicity, “so much so that the very large disparities in cardiovascular outcomes almost went away by doing something as simple as making evidence-based medications free.”
From the NEJM Catalyst event Patient Engagement: Behavioral Strategies for Better Health at the University of Pennsylvania, February 25, 2016. Watch Part 2 of Niteesh Choudhry’s talk: Value-Based Insurance Design: Theory vs. Practice.