Costs and spillover effects of private insurers' coverage of hepatitis C treatment.
OBJECTIVE
Hepatitis C virus (HCV) treatment incentives for private payers may be misaligned because payers must bear immediate costs and may not realize long-term benefits. However, these benefits may accrue to future payers, including Medicare. We examined how and to what extent private payers' current HCV treatment coverage decisions impact Medicare's and private payers' future costs.


METHODS
Discrete-time Markov model.


METHODS
We modeled HCV disease progression and transmission to simulate the economic and social effects of different private-payer HCV treatment scenarios on Medicare. The model examined differences between a baseline scenario (current practice guidelines) and 2 alternative scenarios that expand treatment coverage. Spillover effects were measured as reduced HCV treatment costs and medical expenditures in Medicare. We calculated the spillover effects and net social value of each scenario (total value of quality-adjusted life-years accrued over time minus cumulative treatment and medical costs).


RESULTS
With expanded HCV treatment coverage, private payers experience reduced medical expenditures in the 3-to-5-year time horizon; however, they still face higher treatment costs. Over a 20-year horizon, private payers experience overall savings of $10 billion to $14 billion after treatment costs. The expansion of coverage by private payers generates positive spillover benefits to Medicare of $0.3 billion to $0.7 billion over a 5-year horizon, and $4 billion to $11 billion over a 20-year horizon.


CONCLUSIONS
When private payers increase HCV treatment coverage, they may achieve significant savings while inducing spillover benefits to Medicare. Future savings, however, may not motivate immediate treatment investments among private payers who experience high beneficiary turnover.
Precision Health Economics, 11100 Santa Monica Blvd, Ste 500, Los Angeles, CA 90025. E-mail: gigi.moreno@precisionhealtheconomics.com.
Gigi A
GA
Moreno
Karen
K
Mulligan
Caroline
C
Huber
Mark T
MT
Linthicum
David
D
Dreyfus
Timothy
T
Juday
Steven E
SE
Marx
Yuri Sanchez
YS
Gonzalez
Ron
R
Brookmeyer
Darius N
DN
Lakdawalla
D000998:Antiviral Agents / Q000191:economics / Q000627:therapeutic use; D003198:Computer Simulation; D003362:Cost-Benefit Analysis; D018450:Disease Progression; D042241:Early Diagnosis; D019698:Hepatitis C, Chronic / Q000188:drug therapy / Q000191:economics* / Q000453:epidemiology / Q000635:transmission; D006801:Humans; D019458:Insurance Coverage / Q000191:economics* / Q000592:standards; D007348:Insurance, Health / Q000191:economics* / Q000592:standards; D008390:Markov Chains; D006278:Medicare / Q000191:economics; D018803:Models, Economic; D009749:Nutrition Surveys / Q000706:statistics & numerical data; D017149:Private Sector / Q000191:economics; D019057:Quality-Adjusted Life Years; D013997:Time Factors; D014481:United States / Q000453:epidemiology
D000998:Antiviral Agents