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Can Health Insurance Features Prevent Overuse in Healthcare? It's Complicated, Authors Say in AJMC® Study


Health insurance benefit designs have long tried to prevent overuse of health services, with tools like prior authorization and high deductibles. But a new study in The American Journal of Managed Care® that looked at how benefit design affected overuse finds there’s no simple answer to the problem.

First, health maintenance organizations (HMOs) were going to eliminate waste in healthcare with prior authorization and gatekeeping primary care doctors. Then, high-deductible health plans, or HDHPs, were expected to do the trick by making consumers more conscious of what services cost.

It’s not that simple, according to a new study in The American Journal of Managed Care.® Researchers from the Harvard T.H. Chan School of Public Health and the Dartmouth Institute for Health Policy and Clinical Practice examined overuse of six services, identified in the Choosing Wisely campaign, that occurred across three large commercial health plans from 2009 to 2013. They found that neither HMOs nor HDHPs could entirely eliminate overuse.

What stood out? High fragmentation in primary care was a much better indicator of unnecessary healthcare than either plan design. And, the idea that more consumer cost sharing, in the form of higher deductibles or co-payments, would reduce waste is false, the researchers found. In the study, health plans with lower cost sharing did not consistently experience more overuse.

The best intervention for health insurance companies, they suggest, would be to carefully target co-payments or deductibles to directly address overuse of specific services, rather than put downward pressure on all services. This idea of “value-based insurance design,” which ties cost sharing to the value of the healthcare service, is a challenge in HDHPs.

“Although relying on higher cost sharing may achieve reductions in spending, it carries risks, and co-payment amounts and deductible sizes should be set carefully,” the authors wrote.

About The American Journal of Managed Care®:

The American Journal of Managed Care® (AJMC®) is a peer-reviewed, MEDLINE-indexed journal that keeps readers on the forefront of health policy by publishing research relevant to industry decision makers as they work to promote the efficient delivery of high-quality care. AJMC.com is the essential website for managed care professionals, distributing industry updates daily to leading stakeholders. Other titles in the AJMC® family include The American Journal of Accountable Care®, and two evidence-based series, Evidence-Based Oncology™ and Evidence-Based Diabetes Management™. These comprehensive offerings bring together stakeholder views from payers, providers, policymakers and other industry leaders in managed care. To order reprints of articles appearing in AJMC® publications, please contact Jeff Prescott at 609-716-7777, ext. 331.


AJMC® Media:

Theresa Burek, 609-716-7777



Surabhi Verma


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