Publications
Publications
- New England Journal of Medicine
Undermining Value-Based Purchasing — Lessons from the Pharmaceutical Industry
By: Leemore S. Dafny, Christopher Ody and Matt Schmitt
Abstract
The analogy between value-based purchasing in pharmaceuticals and the new frontier of alternative payment models for health care providers is relatively straightforward. Insurers are increasingly demanding steep discounts from providers in exchange for inclusion in more limited networks or placement on favorable tiers. They will drive hard bargains in locations where alternative providers are available and will use financial incentives for patients in order to deliver volume to providers who meet their criteria. In turn, providers may attempt to circumvent the copayment system by waiving cost sharing for patients, a direct analogue to copayment coupons. For example, some providers have found it profitable to charge prices that keep them out of an insurance plan’s network and then waive cost sharing.
Keywords
Drug Copayment Coupons; Prescription Drug Policy; Health Care and Treatment; Insurance; Cost; Policy; Pharmaceutical Industry
Citation
Dafny, Leemore S., Christopher Ody, and Matt Schmitt. "Undermining Value-Based Purchasing — Lessons from the Pharmaceutical Industry." New England Journal of Medicine 375, no. 21 (November 24, 2016): 2013–2015.
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