“Split benefit” health insurance

This article tests a novel solution in health insurance policy design, called a “split benefit”, focusing on high-cost interventions for which the value is uncertain. Currently, insurance is provided as an “in-kind” benefit, which is paid directly to the provider; this creates a sunk cost, thereby biasing decisions toward consumption. In the split benefit model, the insurer can split the benefit between the beneficiary and the provider. The insurer pays the provider only if the patient consumes.

For example, for an expensive (say, US$50,000) procedure that the physician prescribes and the insurer must cover, the insurer will pay to the patient a fraction of the charge for the treatment (say, US$5,000). Then, the patient will have the option of using that US$5,000 for the treatment, with the insurer matching by paying the US$45,000 to the provider as usual. Or, the patient could keep the US$5,000 for some other purpose, which can vary.

The paper, by Christopher Robertson and colleagues, discusses variations and limitations, as well as a randomized, vignette-based survey about the concept. Note, as I emphasized above, the target for this design is care of uncertain value, not all care. Legal, ethical, and clinical implications of the idea are discussed here (a paper that I have not read).


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