Can Broader Diffusion of Value-Based Insurance Design Increase Benefits from US Health Care without Increasing Costs? Evidence from a Computer Simulation Model R. Scott Braithwaite 1 *, Cynthia Omokaro 2 , Amy C. Justice 3 , Kimberly Nucifora 1 , Mark S. Roberts 4,5 1 Section of Value and Comparative Effectiveness, New York University School of Medicine, New York, New York, United States of America, 2 Albany Medical College, Albany, New York, United States of America, 3 General Internal Medicine, Yale University Schools of Medicine and Public Health, New Haven, Connecticut, United States of America, 4 Section of Decision Sciences and Clinical Systems Modeling, University of Pittsburgh School of Medicine, Pittsburgh, Pennsylvania, United States of America, 5 Department of Health Policy and Management, University of Pittsburgh Graduate School of Public Health, Pittsburgh, Pennsylvania, United States of America Abstract Background: Evidence suggests that cost sharing (i.e.,copayments and deductibles) decreases health expenditures but also reduces essential care. Value-based insurance design (VBID) has been proposed to encourage essential care while controlling health expenditures. Our objective was to estimate the impact of broader diffusion of VBID on US health care benefits and costs. Methods and Findings: We used a published computer simulation of costs and life expectancy gains from US health care to estimate the impact of broader diffusion of VBID. Two scenarios were analyzed: (1) applying VBID solely to pharmacy benefits and (2) applying VBID to both pharmacy benefits and other health care services (e.g., devices). We assumed that cost sharing would be eliminated for high-value services (,$100,000 per life-year), would remain unchanged for intermediate- or unknown-value services ($100,000–$300,000 per life-year or unknown), and would be increased for low- value services (.$300,000 per life-year). All costs are provided in 2003 US dollars. Our simulation estimated that approximately 60% of health expenditures in the US are spent on low-value services, 20% are spent on intermediate-value services, and 20% are spent on high-value services. Correspondingly, the vast majority (80%) of health expenditures would have cost sharing that is impacted by VBID. With prevailing patterns of cost sharing, health care conferred 4.70 life-years at a per-capita annual expenditure of US$5,688. Broader diffusion of VBID to pharmaceuticals increased the benefit conferred by health care by 0.03 to 0.05 additional life-years, without increasing costs and without increasing out-of-pocket payments. Broader diffusion of VBID to other health care services could increase the benefit conferred by health care by 0.24 to 0.44 additional life-years, also without increasing costs and without increasing overall out-of-pocket payments. Among those without health insurance, using cost saving from VBID to subsidize insurance coverage would increase the benefit conferred by health care by 1.21 life-years, a 31% increase. Conclusion: Broader diffusion of VBID may amplify benefits from US health care without increasing health expenditures. Please see later in the article for the Editors’ Summary. Citation: Braithwaite RS, Omokaro C, Justice AC, Nucifora K, Roberts MS (2010) Can Broader Diffusion of Value-Based Insurance Design Increase Benefits from US Health Care without Increasing Costs? Evidence from a Computer Simulation Model. PLoS Med 7(2): e1000234. doi:10.1371/journal.pmed.1000234 Academic Editor: Joshua A. Salomon, Harvard School of Public Health, United States of America Received May 22, 2009; Accepted January 15, 2010; Published February 16, 2010 Copyright: ß 2010 Braithwaite et al. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Funding: This study was funded by a grant from the Robert Wood Johnson Foundation. The funder had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. Competing Interests: The authors have declared that no competing interests exist. Abbreviations: COVID, cost-offset value-based insurance design; EMR, electronic medical record system; ICER, incremental cost-effectiveness ratio; VBID, value- based insurance design * E-mail: Scott.Braithwaite@nyumc.org PLoS Medicine | www.plosmedicine.org 1 February 2010 | Volume 7 | Issue 2 | e1000234