CA VBID Program Boosted Primary Care Use, Contained Healthcare Costs

California’s value-based insurance design (VBID) program was associated with a higher probability of primary care use, a lower probability of inpatient admissions, and no change in total costs for health plan members during the first two years of operations, a study published in JAMA Network Open found.

VBID programs aim to increase member use of high-value care and minimize low-value care use to improve health outcomes and reduce total healthcare costs.

In 2019, the California Public Employees’ Retirement System (CalPERS) created a VBID program in one of its preferred provider organization (PPO) commercial health plans to encourage primary care use among plan members.

The VBID interventions included a $10 office visit copayment if members selected and used a primary care physician for routine care and halved annual deductibles if members completed five activities: annual biometric screening, influenza vaccine, nonsmoking certification, second opinion for elective surgical procedures, and disease management participation.

Researchers conducted a retrospective cohort study to determine the association of participation in the CalPERS VBID program with member healthcare costs and utilization in 2019 and 2020. They compared the VBID cohort with members from another CalPERS PPO plan that did not implement the VBID interventions, referred to as non-VBID PPO.

The study sample included 24,498 VBID PPO health plan members and 69,629 non-VBID PPO members. The per-member per-year mean total allowed payments for the VBID PPO were lower than the non-VBID PPO in 2019 and 2020. However, spending measures were likely influenced by the COVID-19 pandemic in 2020, researchers noted.

The VBID PPO cohort had a lower probability of inpatient hospital surgical admission in 2019 than the non-VBID PPO cohort, with a relative odds ratio of 0.74. In addition, the VBID PPO cohort had a lower probability of total inpatient hospital admission and paying admission out-of-pocket in 2019.

Meanwhile, VBID PPO members had higher chances of receiving immunizations in 2019, seeing a primary care physician in 2020, and paying for an outpatient visit out-of-pocket in 2020.

The VBID PPO cohort had higher mean total allowed payments per member per year for primary care office visits in 2019 and 2020 compared to the non-VBID PPO group, with a relative payments ratio of 1.05.

VBID PPO members also had higher mean out-of-pocket payments for laboratory tests and medication. Researchers noted that this might be attributed to the COVID-19 pandemic or more primary care interventions.

However, the mean out-of-pocket payments for inpatient admissions in 2020 were lower for VBID PPO members than for non-VBID PPO members.

“These results suggest that even though the VBID PPO may be associated with a higher chance of outpatient [out-of-pocket] payments, it may come with lower annual [out-of-pocket] payments for both outpatient and inpatient services,” researchers wrote.

In both 2019 and 2020, there were no differences in spending between the two cohorts for inpatient and outpatient combined, outpatient, prescription drugs, out-of-pocket combined, emergency department, specialist, and psychiatrist visits.

While the VBID program was associated with improvements for certain interventions and contained total healthcare costs for members, enhanced member engagement could lead to better results. For example, automatically matching a primary care physician with a member upon enrollment could help increase primary care uptake, researchers said.

Additionally, the CalPERS VBID PPO could eliminate the copayment for primary care office visits, which may incentivize patients to utilize primary care. Eliminating copayments for prescription drugs could also help boost medication use, adherence, and spending for targeted diseases.

Another potential route to improve the VBID program could be increasing cost-sharing for low-value care to reduce healthcare waste and spending, although researchers noted this would come with ethical and operational challenges.