The Effects of Value-Based Insurance on Medication Adherence
Written by Nihar Patel HS'20, MBA'21
Published on November 5, 2018
Affordability is a significant factor in patients’ non-adherence to their medication regimen. High medication costs may deter a patient from filling their prescription or even completing the full course of therapy. Recently, insurance plans have engineered the idea of implementing value-based insurance to increase medication adherence rates. The value-based insurance design brings select drug copay costs down to zero or nearly zero for patients covered by the insurance plan. With the insurance covering the major cost of the medications, the patient would incur low to no out-of-pocket costs for filling prescriptions. Value-based insurance plans can have a significant positive impact on medication adherence rates of the individuals as compared to plans with copays or other out-of-pocket costs. Additionally, the value-based insurance design provides significant value to the insurance companies themselves. Medication adherence rates will be significantly higher for patients with zero out-of-pocket costs, which lead to better health outcomes. This will overall decrease the need for future health care for the same medical issue.
The study titled, “The Value of Value-Based Insurance Design” conducted by Dr. Maeng, PhD et al. determined the effectiveness of the value-based insurance design on a sample of Geisinger Health System employees. In the study, the researchers eliminated pharmacy copays for employees covered by the health system insurance. Then, they observed the monthly claims accumulated by the insured employees for medications and medical care. The total claims were compared to those of the control group of non-employee patients that used Geisinger Health Insurance. The employees’ total health care spending, including medical and prescription services, was significantly lower during the duration of this study as compared to the control group. The study concluded that the value-based insurance design is a “cost saving strategy”, which essentially “changed the patient behavior and engagement with their medications”.
A similar research project, “Value-Based Insurance Design Improves Medication Adherence Without An Increase In Total Health Care Spending” conducted by Agrawal et al. produced a systematic review of studies researching the effectiveness of reducing the patient’s out-of-pocket cost on medication adherence. In addition, they observed the cost savings from the expected improved health outcomes. All the studies that were evaluated presented increased PDC (proportion of days covered) and MPR (medication possession ratio), which translates into increased medication adherence in at least one drug category. Overall, the systematic review concluded that the decreased out-of-pocket costs improved medication adherence by a range of 0.8%-14.3% in MPR and 0.1%-11% in PDC for each drug class. Unlike the previous study, improvement of health outcomes was not analyzed. The study concluded that the total health care spending remained the same for the insurance companies. The insurance companies spent more funds on medications, but this cost was neutralized from a decrease in spending for additional medical care.
The value-based insurance model is an effective way of fulfilling the needs of both the consumers and the insurance companies. It lowers the out-of-pocket costs of medications to as little as zero. This is very beneficial to consumers since one of the biggest issues for improving medication adherence is the high drug prices that discourage patients from filling their prescriptions or even completing their course of treatment. The insurance company putting money forward to allow patients easy access to drugs will in turn better their health outcomes. This will lead to less emergency room and physician visits since all patients, especially those with chronic conditions, will take better care of their medical conditions. With the value-based insurance model, the insurance company will benefit in the long term while taking optimal care for their insured patients.