A method to simulate incentives for cost containment under various cost sharing designs: an application to a first-euro deductible and a doughnut hole

Abstract

Many health insurance schemes include deductibles to provide consumers with cost containment incentives (CCI) and to counteract moral hazard. Policymakers are faced with choices on the implementation of a specific cost sharing design. One of the guiding principles in this decision process could be which design leads to the strongest CCI. Despite the vast amount of literature on the effects of cost sharing, the relative effects of specific cost sharing designs—e.g., a traditional deductible versus a doughnut hole—will mostly be absent for a certain context. This papers aims at developing a simulation model to approximate the relative effects of different deductible modalities on the CCI. We argue that the CCI depends on the probability that healthcare expenses end up in the deductible range and the expected healthcare expenses given that they end up in the deductible range. Our empirical application shows that different deductible modalities result in different CCIs and that the CCI under a certain modality differs across risk-groups.

A systematic review of strategies used for controlling consumer moral hazard in health systems

“…The studies included in this theme investigated consequences such as the utilization of health services, health costs, health related behavior, the choice of insurance plan, and the opinion and acceptance of consumers using quantitative, qualitative, review, and theoretical approaches (model-based), the results of quantitative studies are reported in narrative form as follows: modest to high reduction in health services and medications utilization [ 9 , 20 , 21 , 23 , 33 , 38 , 44 , 45 , 47 , 49 , 51 , 55 , 56 , 64 , 69 , 71 ], reduction in health cost [ 21 , 39 , 41 , 42 , 44 , 53 , 65 , 68 ], low or no significant effect on health services utilization [ 6 , 34 , 35 , 40 , 62 , 63 , 65 ], low or no significant effect on health costs [ 5 ], increasing cost contaminate incentive (CCI) [ 57 ], significant correlation with higher preventive behavior [ 13 , 50 ] modest efficiency gain [ 18 ], increasing medication adherence [ 48 ], increasing demand for low price drug [ 61 ], optimal insurance [ 54 ].…”

“…[ 5 , 6 , 9 , 10 , 13 , 15 , 18 – 20 , 22 – 25 , 27 – 33 , 35 – 49 , 51 – 57 , 59 – 67 , 70 – 73 , 78 ]…”

“…The outcomes analyzed in the included studies are other points of debate in this review. The majority of the outcomes analyzed included demand and utilization of health services [ 5 , 15 , 18 – 24 , 30 , 33 , 37 – 40 , 43 – 45 , 47 – 51 , 55 , 56 , 58 , 60 , 62 – 65 , 68 – 71 , 75 , 84 , 86 ] and health services costs and expenditures, optimality and efficiency of strategies [ 5 , 15 , 30 – 32 , 36 , 37 , 39 , 41 – 44 , 53 , 54 , 57 , 59 , 68 , 70 , 73 – 76 , 83 , 85 , 87 , 94 ]. Limited studies have addressed other important aspects such as access to low-income people [ 49 , 60 , 68 ], reduction in the consumption of both essential (such as preventive and diagnostic services) and non-essential services [ 24 , 44 , 58 ], and people’s attitudes and acceptance [ 25 , 34 , 52 , 67 ].…”

A Structural Microsimulation Model for Demand-Side Cost-Sharing in Healthcare

“…In section 6 we show that the average deductible elasticity in our model here is the same. Van Kleef et al (2009) and Cattel et al (2017) already show the shifted deductible's potential for reducing moral hazard in the Netherlands. In this paper, we build on this by quantifying how much a shifted deductible can reduce healthcare expenditures and, in fact, out-of-pocket payments.…”

Deductibles in Health Insurance, Beneficial or Detrimental: A Review Article

“…Among the above methods, one of the ways that have been taken into consideration in recent years in some of the world developed countries is paying deductibles. In this method, the insured person must pay a certain and fixed amount for covered health care services before the insurance organization starts to pay ( 4 ). The philosophy of deductibles is that most insured persons can afford low expenses of visits, medications, etc.…”