Value-Based Insurance Design Program In North Carolina Increased Medication Adherence But Was Not Cost Neutral

Value-based insurance design (VBID) has shown promise for improving medication adherence by lowering or eliminating patients' payments for some medications. Yet the business case for VBID remains unclear. VBID is based on the premise that higher medication and administrative expenses incurred by insurers will be offset by lower nonmedication expenditures that result from better disease control. This article examines Blue Cross Blue Shield of North Carolina's VBID program, which began in 2008. The program eliminated copayments for generic medications and reduced copays for brand-name medications. Patient adherence improved 2.7-3.4 percent during the two-year study period. Hospital admissions decreased modestly, but there were no significant changes in emergency department use or total health expenditures. The insurer incurred $6.4 million in higher medication expenditures; total nonmedication expenditures for the study population decreased $5.7 million. Our results provide limited support for the idea that VBID can be cost-neutral in specific subpopulations. The business case for VBID may be more compelling over the long term and in high risk subgroups for whose members cost is an important barrier to improved medication adherence.