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The American Journal of Managed Care May 2019
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Evaluation of Value-Based Insurance Design for Primary Care
Qinli Ma, PhD; Gosia Sylwestrzak, MA; Manish Oza, MD; Lorraine Garneau; and Andrea R. DeVries, PhD
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Evaluation of Value-Based Insurance Design for Primary Care

Qinli Ma, PhD; Gosia Sylwestrzak, MA; Manish Oza, MD; Lorraine Garneau; and Andrea R. DeVries, PhD
The removal of cost sharing increased primary care access and did not negatively affect total cost of care.

Objectives: To evaluate the impact of value-based insurance design (VBID), which removed patient cost sharing for primary care visits, on healthcare spending in a large, geographically diverse employer.

Study Design: Quasi-experimental, difference-in-differences (DID) design, administrative claims–based study.

Methods: Healthcare spending during the preintervention period (2008 and 2009) was compared with the postintervention period (2011 through 2014) to measure the impact of removing primary care cost sharing. The study population included Anthem commercially insured enrollees with continuous medical eligibility from 2008 to 2014 who were younger than 65 years. The VBID cohort included health plan enrollees from a national large employer that implemented the benefit change. The comparison cohort included other Anthem enrollees who did not have a similar benefit change and were propensity score–matched to the VBID cohort. Utilization of various types of healthcare services was also examined.

Results: The VBID cohort experienced a $12.0 per member per month relative reduction in overall spending compared with the comparison cohort (P = .02). The trend was driven by reductions in expenditures for emergency department (ED) visits ($1.3 relative reduction; DID, –10.0%; P = .03) and other outpatient services ($7.6 relative reduction; DID, –5.8%; P = .02), which aligned with reduced utilization of ED visits (DID, –4.5%; P = .07) and other outpatient services (DID, –4.1%; P = .004). For physician office visits, the VBID cohort did not experience a significant relative increase compared with the comparison cohort (DID, 0.9%; P = .25).

Conclusions: The attempt to increase primary care access by reducing cost sharing did not produce a negative outcome in terms of total spending for healthcare.

Am J Manag Care. 2019;25(5):221-227

View an infographic of this abstract here.
Takeaway Points

Our study evaluated the impact of removing cost sharing for primary care on healthcare spending and utilization among commercially insured children and adults in a large employer group over a 6-year period.
  • Previous research demonstrates that increased cost sharing reduces use of low-value services, but it has not demonstrated an increase in use of high-value services.
  • Patients included in value-based insurance design (VBID) in this study did not experience significantly increased use of primary care.
  • VBID patients in this study experienced a lower total healthcare spending trend through decreases in medical utilization, driven by reduced utilization of the emergency department.
Recent reports suggest that healthcare expenditures in the United States will continue to grow by 5% to 6% per year, creating additional pressure on employers and insurers to contain spending.1 One approach widely adopted by insurers and employers has been to shift financial responsibility to consumers through higher premiums, co-pays, and deductibles. Based on the RAND Health Insurance Experiment, cost-sharing provisions seem especially promising in curbing “excessive” or potentially unnecessary healthcare utilization without any repercussions for patient health.2,3 Increasing cost-sharing provisions resulted in ballooning out-of-pocket payments for patients, which grew by 94% between 2012 and 2015.4

Another promising approach has been the use of value-based insurance design (VBID), in which cost sharing is removed or reduced for high-value services and retained or increased for low-value services.5 The idea behind VBID is that some healthcare encounters are beneficial in detecting and treating negative health events at an early stage, events that could become compounded later, and they therefore reduce down-the-road hospitalizations and other costly healthcare encounters. So far, VBID has been implemented relatively widely in the area of prescription medications—mostly in managing chronic conditions. One exception is the Mayo Clinic, which coupled cost-sharing reductions in the primary care setting and for general preventive services with increased cost sharing for specialty care and outpatient procedures.6 Other examples include Connecticut, which provided substantial incentives to state employees to lower their out-of-pocket costs for medications and office visits associated with chronic disease.7 More recently, in January 2017, CMS began testing a VBID model in the Medicare Advantage population by offering reduced cost sharing for enrollees falling into specific clinical categories, such as those with diabetes, congestive heart failure, or chronic obstructive pulmonary disease.8

Several studies have identified access and continuity of care in the primary care setting as promising high-value opportunities that improve health outcomes while lowering total healthcare expenditures. Primary care utilization improves care continuity, intensifies the patient–provider relationship, emphasizes potential disease prevention, and improves the management of existing conditions, which can reduce unnecessary specialist care, hospitalizations, and emergency department (ED) visits.9-16

In this study, we evaluated the impact of a large national employer’s decision to remove cost sharing for primary care physician (PCP) office visits. Previously, Sepulveda et al evaluated this initiative on the employees’ children during the 2 years following implementation and found a significant increase in PCP visits and a reduction in ED visits while total healthcare expenditures per child were unchanged.17 Our study, intending to examine the long-term impacts of the initiative on a comprehensive population, evaluated how the removal of cost sharing in primary care affects healthcare spending and utilization among commercially insured children and adults over a 6-year period.


Data Source

This quasi-experimental study with difference-in-differences (DID) design used 6 years of administrative medical claims data from the HealthCore Integrated Research Environment, which links medical claims and eligibility files from 14 commercial health plans across the United States. All data were accessed as a limited data set in a manner compliant with the Health Insurance Portability and Accountability Act of 1996.

Study Population

The study population consisted of Anthem commercially insured members with continuous medical eligibility from 2008 to 2014, with 2008 and 2009 designated as the preintervention period (before the cost sharing was removed) and 2011 through 2014 designated as the postintervention period. The year 2010 was excluded because it represents the transition period when the benefit change was implemented.

Members 65 years or older were excluded from the study. Members with very complex health scenarios or conditions (eg, organ transplantation, hemophilia, cystic fibrosis, end-stage renal disease, and long-term respiratory failure; detailed list in eAppendix A [eAppendices available at]) were also excluded, as these members were more likely to have their care coordinated by a specialist.

The study subjects were divided into 2 cohorts. The VBID cohort consisted of employees and their family members from the single large national employer that made the decision to remove PCP cost sharing. Other aspects of benefit design remained unchanged over the study period for the VBID cohort. The comparison cohort was selected from the population of other Anthem enrollees who did not undergo a similar benefit change, using 1:1 propensity score matching. To evaluate whether there was a difference in impact by age group, the study population was stratified to subgroups of individuals aged 18 years or younger, 19 to 50 years, and 51 to 64 years.

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