Towards Optimizing Co-Insurance Levels for Statin Treatment of Heart Disease

Abstract

Objectives.  To investigate a Value-Based Insurance Design (VBID) approach for heart disease treatment where low-risk and high-risk health insurance enrollees have different cost-sharing parameters, to provide incentives to increase medication adherence and health outcome.

Study Design.  We propose a methodology based on a Markov Chain to model transitions between health states, which has not been used in the context of health insurance design.  We also conduct sensitivity analysis to analyze how key parameters influence the optimal coinsurance levels.

Data Sources.  We use data published in the literature.

Principal Findings.  (i) Preventing low-risk patients from turning into high-risk patients is more important in keeping total cost down than preventing high-risk patients from having a heart attack. (ii) The VBID approach yields the greatest cost benefits when the heart attack cost is about 175 times the cost of medicine.  (iii) VBID cost savings and optimal cost-sharing levels are very sensitive to medicine effectiveness when the rate of reduction in heart attack is less than 14%.  

Conclusions.  While VBID is appealing in theory, its practical usefulness is highly uncertain due to the sensitivity to model parameters, which are difficult to estimate accurately.