title: Can value-based insurance impose societal costs?
abstract: BACKGROUND
  Among policy alternatives considered to reduce health care costs and improve outcomes, value-based insurance design (VBID) has emerged as a promising option. Most applications of VBID, however, have not used higher cost sharing to discourage specific services. In April 2011, the state of Oregon introduced a policy for public employees that required additional cost sharing for high-cost procedures such as total knee arthroplasty (TKA).
  
  
  OBJECTIVE
  Our objectives were to estimate the societal impact of higher co-pays for TKA using Oregon as a case study and building on recent work demonstrating the effects of knee osteoarthritis and surgical treatment on employment and disability outcomes.
  
  
  METHODS
  We used a Markov model to estimate the societal impact in terms of quality of life, direct costs, and indirect costs of higher co-pays for TKA using Oregon as a case study.
  
  
  RESULTS
  We found that TKA for a working population can generate societal benefits that offset the direct medical costs of the procedure. Delay in receiving surgical care, because of higher co-payment or other reasons, reduced the societal savings from TKA.
  
  
  CONCLUSIONS
  We conclude that payers moving toward value-based cost sharing should consider consequences beyond direct medical expenses.
authors.affiliation: KNG Health Consulting, LLC,Rockville, MD. Electronic address: Lane.Koenig@knghealth.com.
authors.forename: Lane
authors.initials: L
authors.lastname: Koenig
authors.affiliation: IHS Global, Inc.,Washington, DC.
authors.forename: Timothy M
authors.initials: TM
authors.lastname: Dall
authors.affiliation: Econometrica, Inc., Bethesda, MD.
authors.forename: David
authors.initials: D
authors.lastname: Ruiz
authors.affiliation: KNG Health Consulting, LLC,Rockville, MD.
authors.forename: Josh
authors.initials: J
authors.lastname: Saavoss
authors.affiliation: Oregon Health & Science University, Tualatin, OR.
authors.forename: John
authors.initials: J
authors.lastname: Tongue
mesh_terms: D000328:Adult; D000368:Aged; D019645:Arthroplasty, Replacement, Knee / Q000191:economics*; D015331:Cohort Studies; D003362:Cost-Benefit Analysis; D005260:Female; D017048:Health Care Costs; D006801:Humans; D007348:Insurance, Health / Q000191:economics*; D008297:Male; D008875:Middle Aged; D020370:Osteoarthritis, Knee / Q000191:economics / Q000601:surgery; D012922:Social Change; D062505:Value-Based Purchasing / Q000191:economics*
keywords: cost sharing; societal benefits; total knee replacement; value-based insurance design