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

Jonathan Gruber (), Johanna Maclean, Bill Wright (), Eric Wilkinson () and Kevin G. Volpp ()
Additional contact information
Jonathan Gruber: MIT
Bill Wright: Providence Health and Services , CORE
Eric Wilkinson: Temple University
Kevin G. Volpp: University of Pennsylvania

No 10477, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: value-based insurance design; low value; healthcare; cost-sharing (search for similar items in EconPapers)
JEL-codes: I1 I11 I18 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2017-01
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Published - published as 'The effect of increased cost-sharing on low-value service use' in: Health Economics, 2020, 29 (10), 1180-1201

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Working Paper: The Impact of Increased Cost-sharing on Utilization of Low Value Services: Evidence from the State of Oregon (2016)
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