Featured Research

from universities, journals, and other organizations

Charging less for more effective treatments could reduce health care costs while improving health

Date:
February 16, 2010
Source:
Public Library of Science
Summary:
Value-based insurance design in which consumer payments are waived for highly effective treatments, but are raised for less effective ones, could increase the benefits of healthcare in the US without increasing expenditures.

Value-based insurance design (VBID) in which consumer payments are waived for highly effective treatments, but are raised for less effective ones, could increase the benefits of healthcare in the US without increasing expenditures, according to research published in PLoS Medicine. The costs saved by VBID could be used to subsidize coverage for the currently uninsured, providing a substantial improvement in health outcomes.

Related Articles


Strategies that influence the quantity of health care consumed are essential to controlling healthcare costs. Such strategies can target health care providers (for example, requiring primary care physicians to provide referrals or to go through cumbersome administrative procedures before their patients' insurance will cover specialist care) or can target consumers by charging co-payments and out-of-pocket deductibles (cost sharing). Cost sharing decreases health expenditure but it can also reduce demand for essential care and thus reduce the overall quality of care.

Consequently, some experts have proposed VBID, an approach in which the amount of cost sharing is set according to the ''value'' of an intervention -- the additional health benefit it adds per dollar spent -- rather than its cost. Under VBID, cost sharing could be waived for office visits necessary to control blood pressure in people with diabetes, which constitute high-value care, but could be increased for high-tech scans ordered to diagnose chronic dementia.

In the current study, using computer simulations of costs and life expectancy gains based on US healthcare data, R. Scott Braithwaite of the New York University School of Medicine and colleagues estimated that approximately 60% of health expenditures in the US are spent on low-value services and 20% are spent on high-value services, indicating that the vast majority (80%) of health expenditures would have cost sharing that would be affected by VBID. They found that broader diffusion of VBID to drug costs alone increased the benefit conferred by health care by 0.03 to 0.05 additional life-years, without increasing overall costs or out-of-pocket payments. Extension of VBID to other health care services could increase the benefit conferred by health care by 0.24 to 0.44 additional life-years. Among those without health insurance, using cost saving from VBID to subsidize insurance coverage would increase the benefit conferred by health care by 1 .21 life-years, a 31% increase.

This study was funded by a grant from the Robert Wood Johnson Foundation.


Story Source:

The above story is based on materials provided by Public Library of Science. Note: Materials may be edited for content and length.


Journal Reference:

  1. Scott Braithwaite et al. Can Broader Diffusion of Value-Based Insurance Design Increase Benefits from US Health Care without Increasing Costs? Evidence from a Computer Simulation Model. PLoS Medicine, 2010; 7 (2): e1000234 DOI: 10.1371/journal.pmed.1000234

Cite This Page:

Public Library of Science. "Charging less for more effective treatments could reduce health care costs while improving health." ScienceDaily. ScienceDaily, 16 February 2010. <www.sciencedaily.com/releases/2010/02/100215201601.htm>.
Public Library of Science. (2010, February 16). Charging less for more effective treatments could reduce health care costs while improving health. ScienceDaily. Retrieved November 24, 2014 from www.sciencedaily.com/releases/2010/02/100215201601.htm
Public Library of Science. "Charging less for more effective treatments could reduce health care costs while improving health." ScienceDaily. www.sciencedaily.com/releases/2010/02/100215201601.htm (accessed November 24, 2014).

Share This


More From ScienceDaily



More Health & Medicine News

Monday, November 24, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Ebola-Hit Sierra Leone's Late Cocoa Leaves Bitter Taste

Ebola-Hit Sierra Leone's Late Cocoa Leaves Bitter Taste

AFP (Nov. 23, 2014) The arable district of Kenema in Sierra Leone -- at the centre of the Ebola outbreak in May -- has been under quarantine for three months as the cocoa harvest comes in. Duration: 01:32 Video provided by AFP
Powered by NewsLook.com
Don't Fall For Flu Shot Myths

Don't Fall For Flu Shot Myths

Newsy (Nov. 23, 2014) Misconceptions abound when it comes to your annual flu shot. Medical experts say most people older than 6 months should get the shot. Video provided by Newsy
Powered by NewsLook.com
WFP: Ebola Risks Heightened Among Women Throughout Africa

WFP: Ebola Risks Heightened Among Women Throughout Africa

AFP (Nov. 21, 2014) Having children has always been a frightening prospect in Sierra Leone, the world's most dangerous place to give birth, but Ebola has presented an alarming new threat for expectant mothers. Duration: 00:37 Video provided by AFP
Powered by NewsLook.com
Could Your Genes Be The Reason You're Single?

Could Your Genes Be The Reason You're Single?

Newsy (Nov. 21, 2014) Researchers in Beijing discovered a gene called 5-HTA1, and carriers are reportedly 20 percent more likely to be single. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins