Simulated value-based insurance design applied to statin use by Medicare beneficiaries with diabetes

Abstract

Objective: To examine cost responsiveness and total costs associated with a simulated "value-based" insurance design for statin therapy in a Medicare population with diabetes.

Methods: Four-year panels were constructed from the 1997-2005 Medicare Current Beneficiary Survey selected by self-report or claims-based diagnoses of diabetes in year 1 and use of statins in year 2 (N = 899). We computed the number of 30-day statin prescription fills, out-of-pocket and third-party drug costs, and Medicare Part A and Part B spending. Multivariate ordinary least squares regression models predicted statin fills as a function of out-of-pocket costs, and a generalized linear model with log link predicted Medicare spending as a function of number of fills, controlling for baseline characteristics. Estimated coefficients were used to simulate changes in fills associated with co-payment caps from $25 to $1 and to compute changes in third-party payments and Medicare cost offsets associated with incremental fills. Analyses were stratified by patient cardiovascular event risk.

Results: A simulated out-of-pocket price of $25 [$1] increased plan drug spending by $340 [$794] and generated Medicare Part A/B savings of $262 [$531]; savings for high-risk patients were $558 [$1193], generating a net saving of $249 [$415].

Conclusions: Reducing statin co-payments for Medicare beneficiaries with diabetes resulted in modestly increased use and reduced medical spending. The value-based insurance design simulation strategy met financial feasibility criteria but only for higher-risk patients.

Figure 1

Value Based Insurance Design at the margin, 3^rd party.

Figure 2

A–C: Simulated Effects of VBID OOP Price of Standardized Statins Fill Caps on Medicare Beneficiaries† †VBID: Value Based Benefit Design; OOP: Out of Pocket; High risk: High risk for cardiovascular event; Low risk: Low risk for cardiovascular event