Value Based Insurance Design associated with lower rate of diabetes complications

February 19, 2024

Source: Wharam, et al JAMA Health Forum February 9, 2024 LINK

Value based insurance design (VBID) offers members lower out of pocket costs for high value services, and sometimes charges higher out of pocket costs for low value services. Preventive services without cost sharing mandated by the Affordable Care Act is a good example of VBID. VBID is most prevalent in pharmacy benefit design, where the WTW’s 2023 Best Practices in Healthcare survey shows that 51% of companies (and 56% of companies with over 1,000 employees) have a preventive drug list to bypass the deductible and provide first dollar coverage in high deductible health plans.

Research published in JAMA Health Forum last week compared the medical claims for 10,588 people with diabetes who had lower or no cost sharing for diabetes medicines with claims from almost 700,000 matched people with diabetes to assess the impact plan design on cost, medication use, and quality of care. Their research included commercial claims data from 2004 to 2017, and data for each patient was available for the year before and the year after implementation of the VBID design.

The researchers found that complications of diabetes, such as bacterial infections, neurovascular events, acute coronary disease, and diabetic ketoacidosis, were statistically significantly lower in the members with diabetes who had the VBID plan design. The entire population had 8.4% fewer diabetes complications. The impact was larger in those who lived in low income zip codes, who had 10.2% fewer diabetes complications.

The study also found that those with access to diabetes medications without cost sharing used 11.3% more non-insulin drugs for diabetes; those who resided in low income zip codes used 15.2% more non-insulin drugs for diabetes. This is consistent with other studies that show that cost sharing leads to less drug adherence for those who have lower income. 

The researchers did not report on total costs for the cohort, so we don’t know if this plan design saved medical costs. A previous study showed that a VBID design with lower cost drugs for a variety of conditions including diabetes did not raise total costs of care.

Implications for employers:

• This study provides support for VBID plan design, which offers diabetes drugs for lower (or no) cost sharing.

• All the major PBMs have available VBID benefit designs.

• Employers putting this in place should expect higher drug costs.

• To the extent lower cost sharing for drugs increases drug adherence, it could decrease time away from work.

• This study doesn’t help us estimate either savings or incremental costs from this approach.

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