Health insurance

Einleitung / Introduction

This paper studies how expansions of public health insurance interact with provider heterogeneity in care quality, and studies implications for patients. Specifically, we show theoretically and empirically how joint Medicaid funding, by states and the federal government, leads to an expansion of long-term care use in nursing homes. Our empirical analysis combines audit, survey, and administrative datasets on skilled nursing facilities (SNFs) from 1999-2017 with two reforms and difference-in-differences models. We first document that states use creative financing (CF) schemes to divert federal Medicaid matching funds. Using the case study of Indiana, we then document that CF lead to an expansion of Medicaid SNF use. Next, using value added models, we show that nursing home quality is not a significant predictor of increased SNF use, and how the expansion led to more high- and low-quality use of SNF care. Finally, as policy tools, we show and propose that either taxing CF activities or implementing value-based SNF reimbursement could correct existing distortions towards institutionalized care.

Authors

Nicolas Ziebarth

Einleitung / Introduction

Health insurance involves a trade-off between gains from risk reduction and the potential welfare loss from moral hazard. Cost-sharing mechanisms, such as deductibles and co-payments, aim to mitigate overconsumption. However, recent research indicates unintended consequences, where increased cost-sharing leads to reduced care even when benefits outweigh costs. This study focuses on the impact of a cost-sharing exemption for pregnant women in Switzerland.

Methode / Method

We use a quasi-experimental design exploiting a cost-sharing exemption implemented in 2014 for pregnant women during specific pregnancy weeks. Using data from a Swiss health insurer, we apply a two-way fixed effects regression model to estimate the exemption's effects on healthcare demand. The exemption covers all healthcare services from the 13th week of pregnancy to the 8th week post-delivery, allowing for a comparison of pregnancy weeks before and after policy introduction and within different cost-sharing periods within ongoing pregnancies.

Ergebnisse / Results

While most services exhibit no demand response, there is a notable 30% increase in the demand for physiotherapy and a 5% increase in laboratory services. Heterogeneity analysis by income reveals that these effects are driven by pregnant women with below median income. For this group, overall health care spending increases by approximately 4.9%, or 4.4 Swiss Francs per pregnancy week, indicating an overall demand response of 6 to 7 million Swiss Francs per year. While we do not find evidence of an overall effect on maternal health, our analysis suggests a positive health impact on newborns of low-income individuals.

Zusammenfassung / Conclusion

In conclusion, the cost-sharing exemption for pregnant women in Switzerland has led to a discernible increase in demand for specific healthcare services, particularly among lower-income individuals. The positive health impact on newborns, especially in low-income groups, suggests a nuanced relationship between cost-sharing policies and healthcare outcomes.

Authors

Philip Hochuli, CSS

Christian Schmid, CSS Institut

Einleitung / Introduction

Compulsory healthcare insurance in Switzerland entails a deductible system for cost-sharing between insurer and insuree up to a chosen deductible. No study has so far tested the presence of price sensitivity for healthcare consumption through demand-side induced financial incentives in Switzerland. We address this research gap by focusing on the effect of exceeding the deductible on healthcare consumption. We present three contributions: first, we determine the presence of price sensitivity for healthcare consumption; second, we identify whether this leads to a change in consumption for overuse-prone service groups; third, we explore whether supply side structures influence this change in consumption.

Methode / Method

Our analyses are based on anonymised insurance data from a Swiss health insurance company. We included data for all insurees older than 25 that exceeded their deductible in 2018 and did not give birth between 2017 and 2019, resulting in 371,206 observations. Our empirical strategy included three steps. First, we ran fixed effects ordinary least square regressions of weekly healthcare expenditures on insuree characteristics. Second, on the obtained residuals we ran insuree-level regression discontinuity in time models. Finally, we aggregated the obtained parameters by simple mean. We specified our dependent variable in three ways: first, we included all healthcare expenses; second, we excluded all complex services; third, we only included overuse-prone services. We used the second specification for patient sub-groups analyses and sensitivity analyses. The third specification was used to explore supply-side structures effects.

Ergebnisse / Results

We find a positive difference between healthcare consumption before and after exceeding the deductible, however not significant. For insurees with sudden healthcare expenditures in the two weeks before exceeding the deductible, an increase in subsequent healthcare consumption is more likely, yet not significant. Retirement, premium reduction, and number of chronic illnesses do not have a significant effect on insurees’ healthcare consumption. Supply structures do not significantly influence healthcare consumption patterns after exceeding the deductible.

Zusammenfassung / Conclusion

Our results show that, while there is an overall pattern indicating a higher consumption of healthcare resources after exceeding the deductible, this outcome is insignificant across all specifications. Our findings show that insurees are generally not price sensitive and that the deductible system does not create demand-side financial incentives for the consumption of healthcare resources. As cost-sharing solutions have been introduced to curb the rise of healthcare spending, our findings suggest that the deductible system is an effective cost-sharing solution for Switzerland.

Authors

Irene Salvi, University of St. Gallen

Johannes Cordier, University of St. Gallen

Justus Vogel, University of St. Gallen

David Kuklinski, University of St. Gallen

Alexander Geissler, University of St. Gallen

Einleitung / Introduction

Advances in gene therapy sparked a surge in innovative drugs promising new treatment options and potential cures for rare diseases such as Haemophilia B. They are among the most expensive drugs in the world but often lack conclusive empirical evidence, specifically about long-term efficacy. Insurers feel compelled to provide these potentially lifechanging treatments to patients despite uncertainties about their efficacy. As a compromise, risk-sharing agreements have been introduced to link reimbursement of treatments to their outcomes (e.g. Pay-for-Performance), thereby sharing the financial risks due to uncertainty between insurers and manufacturers. Information on real-world examples of risk-sharing agreements, such as their implementation, costs, and effectiveness, is scarce. Therefore, we aim to simulate the impact of risk-sharing agreements on costs for insurers and manufacturers in Germany using the example of Hemgenix, a Haemophilia B gene therapy.

Methode / Method

We developed a microsimulation Markov model to simulate the long-term efficacy of Hemgenix for individuals with severe Haemophilia B. The disease progression was modelled around haemophilic arthropathy and transition probabilities were based on joint bleeding rates. The population was all male and modelled from age 18 until their death. Treatment costs were calculated on an individual level using a microcosting approach and reported from the perspective of the German health care system. We tested multiple risk-sharing agreements varying parameters on payment mechanisms, agreement duration, and treatment failure.

Ergebnisse / Results

The development of the model has been completed and first risk-sharing agreements have been tested. Preliminary results indicate cost savings for insurers when risk-sharing agreements are im-plemented. The cost savings are largely influenced by the duration of the agreement as well as the durability of the gene therapy treatment.

Zusammenfassung / Conclusion

Our study demonstrates potential cost savings when implementing risk-sharing agreements in the case of gene therapy for individuals with severe Haemophilia B. We provide evidence on the budget impact of risk-sharing agreements at a time when little information on implemented schemes is publicly available. Furthermore, we provide a framework that can be transferred to other national contexts. Finally, our results can inform insurers and manufacturers on whether to negotiate similar risk-sharing agreements.

Authors

Lasse Falk, Hamburg Center for Health Economics, Universität Hamburg

Jonas Schreyögg, Hamburg Center for Health Economics, Universität Hamburg