Little decrease seen in medical spending with value-based design, research shows

Patients are more likely to fill prescriptions that treat costly, chronic diseases when health insurers offer them a financial incentive to do so through value-based insurance design. That's the good news in a research review just published by the journal Health Affairs.

The bad news? Research has yet to show any significant drop in overall medical spending, wrote authors of the review, which examined prior studies of value-based design and proper medication use.

This isn't necessarily surprising given that experts say it often takes time for improved drug treatment and care to stabilize patients' chronic conditions and reduce their healthcare costs. And by then the patient may have switched insurers.

Value-based insurance design uses financial incentives to promote healthy choices and effective treatments. An example is lower co-payments for drugs to manage chronic conditions that can get worse if poorly treated, the review authors wrote. Those incentives rely heavily on discounts on the price patients must pay at the pharmacy for effective medications, rather than raising the cost of less-effective prescriptions.

For patients, the incentives appear to work. Patients spend less and more often filled needed prescriptions, at least temporarily, wrote Drs. Niteesh Choudhry and William Shrank of Harvard University; Matthew Maciejewski and Dr. Shveta Raju of Duke University and Joy Lee, doctoral student at Johns Hopkins University. But payers did not appear to financially benefit, according to the analysis of 13 published research studies.

After one year, filled prescriptions increased 3% on average across the reviewed research. One study found drug adherence continued to improve after the first year of reduced co-pays, though patients were also enrolled in a disease management program. During the second year, adherence increased 6.5% after a gain of 3.7% the inaugural year.

“Our review suggests that although value-based insurance design might not significantly reduce health spending in the short-term—that is, within one to three years—some VBID plans improve medication adherence and reduce patients' out of pocket costs,” they wrote.

Savings to patients were $5 to around $12 for each prescription. Value-based benefit designs often target drugs for heart disease and diabetes.

But insurers saw drug spending climb as patients filled more prescriptions. Colorado's diabetes drug spending on state employees increased by 61%; other increases were not as dramatic, the authors noted. Non-drug spending did not change significantly in two studies that looked solely at costs other than drugs.

Finally, the authors noted promising results in two of the reviewed studies: Lower co-payments for necessary medications were associated with a drop in visits to the doctor, hospital and emergency room.

More study to see whether value-based insurance can deliver hoped-for quality and savings results over time is needed, they wrote.

The cost and medical complications from medication misuse are a potentially significant target for industrywide efforts to reduce waste and improve quality. One recent estimate from the IMS Institute for Healthcare Informatics said better medication adherence and more appropriate prescribing by physicians could have saved $200 billion in 2012.

Follow Melanie Evans on Twitter: @MHmevans