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Value-Based Health Insurance Design: How Much Does Socioeconomic Status Matter?

Bruce W. Sherman, MD, and Carol Addy, MD, MMSc
Socioeconomic status may significantly influence enrollee response to value-based benefit design approaches. Evaluating the association of wage status with claims experience may yield actionable insights.
ABSTRACT

Socioeconomic status (SES), an important determinant of individual health status, has not been widely incorporated into employer benefits strategies. Recent research has characterized significant differences in healthcare utilization patterns and cost among workers in different wage categories, raising the possibility that SES does influence individual healthcare utilization behaviors. In particular, SES may have appreciable impact on the effectiveness of benefits tactics, including value-based insurance design (VBID).

This paper sets forth a hypothesis that low wage status negatively influences individual receptivity to VBID offerings, which may blunt the impact of current VBID initiatives. In contrast, high-wage earners may already be compliant with recommended care, and implementation of a VBID design may not yield incremental increases in their treatment compliance. As a result, wage status may be a significant predictor of a favorable response to VBID.

Based on these considerations, the authors offer suggestions for employer actions, including evaluation of benefits enrollee response to VBID tactics by employee wage band as an initial step. Employers may also wish to engage benefits enrollees via survey or focus group activities to understand barriers to a more impactful VBID response and consider some of the included benefits design considerations that may result in more equitable and impactful use of VBID. Further research is needed to better understand the relationship between SES and response to VBID offerings.

Am J Manag Care. 2018;24(7):318-321

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