The Impact of Increased Cost-Sharing on Utilization of Low Value Services: Evidence from the State of Oregon

52 Pages Posted: 22 Jan 2017

See all articles by Jonathan Gruber

Jonathan Gruber

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Johanna Catherine Maclean

University of Pennsylvania

Bill Wright

Providence Health & Services - Center for Outcomes Research and Education

Eric Wilkinson

Temple University

Kevin Volpp

University of Pennsylvania

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

Abstract

In this study we examine the impact of a value-based insurance design (V-BID) program implemented between 2010 and 2013 at a large public employer in the state of Oregon. The program substantially increased cost-sharing, specifically copayments and coinsurance, for several healthcare services believed to be of low value and overused (sleep studies, endoscopies, advanced imaging, and surgeries). Using a differences-in-differences design coupled with granular, administrative health insurance claims data, we estimate the change in low value healthcare service utilization among beneficiaries before and after program implementation relative to a comparison group of beneficiaries who were not exposed to the V-BID. Our findings suggest that the V-BID significantly reduced utilization of targeted services. These findings have important implications for both public and private healthcare policies as V-BID principles are rapidly proliferating in healthcare markets.

Keywords: healthcare, low value, value-based insurance design, cost-sharing

JEL Classification: I1, I11, I18

Suggested Citation

Gruber, Jonathan and Maclean, Johanna Catherine and Wright, Bill and Wilkinson, Eric and Volpp, Kevin, The Impact of Increased Cost-Sharing on Utilization of Low Value Services: Evidence from the State of Oregon (January 2017). IZA Discussion Paper No. 10477, Available at SSRN: https://ssrn.com/abstract=2903099

Jonathan Gruber (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Johanna Catherine Maclean

University of Pennsylvania ( email )

Bill Wright

Providence Health & Services - Center for Outcomes Research and Education ( email )

United States

Eric Wilkinson

Temple University ( email )

Kevin Volpp

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

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