Dr. Allison Rosen travels to Israel to address copayment policies and health care value

Dr. Allison Rosen travelled to Israel in March to speak on copayment policies and value in health care at the 4th Annual Conference of the Israeli Society for Phamacoeconomics and Outcomes Research. Each year, the Society invites and hosts one distinguished speaker from abroad to address a topic of interest. As the 2011 distinguished speaker, Dr. Rosen presented, “Value-Based Insurance Design: Returning Health to the Health Care Cost Debate,” to a packed room and remained afterwards to discuss applications of value-based insurance design in Israel. Rosen’s talk was well attended by officials from the Ministry of Health, the four HMOs covering all Israelis, academia, and industry.

Abstract from talk

As health care costs continue to increase at unsustainable rates, payers are searching for innovative interventions that strike a balance between containing costs and improving health outcomes, particularly for those with costly chronic diseases. Medication cost sharing – a key element of health care benefit design – plays a critical role in these efforts. Cost containment efforts centered on increasing patient cost-sharing are typically untargeted –copayments are based on the acquisition costs of drugs (i.e., the cheaper the drug, the lower the co-pay), without regard to their therapeutic benefits. Ideally, if patients were discerning consumers of health care, they would curb only the use of low value services. Yet, studies from heterogeneous populations and settings show that cost-sharing is an exceedingly blunt tool, reducing health service utilization substantially even when the services are of great clinical necessity or benefit (i.e., high-value services); medication expenditures may decrease in the short run but, in the long run, reductions in the use of high value medications may harm health and actually increase overall costs of care. To address these shortcomings, value-based insurance design (VBID) has been proposed as a ‘clinically sensitive’ refinement to benefit design which links patient cost-sharing to therapy value; the more clinically beneficial a therapy is for a patient, the lower that patient’s co-payment would be. By explicitly aligning financial incentives, VBID programs can encourage the use of high-value care while discouraging the use of low-value or unproven services. Over the past decade, multiple private and public sector payers in the U.S. have implemented VBID programs with the primary aim of increasing the use of high value services. While VBID can also target low value services, far fewer such interventions have been implemented to date. This session provides an overview of the VBID concept, describes its potential to increase the health gained from every health care dollar spent, and reviews the results of ongoing research quantifying the impact of VBID programs in practice.