Cost Sharing in Insurance Coverage for Precision Medicine
Chapter in NBER book Economic Dimensions of Personalized and Precision Medicine (2019), Ernst R. Berndt, Dana P. Goldman, and John W. Rowe, editor (p. 159 - 184)
This paper describes theory and current practice associated with insurance coverage of treatments and associated companion diagnostic tests for precision or personalized medicine. Coverage by public and private insurances is generally furnished under policy-level cost sharing terms for tests and treatments accepted in clinical practice, but there are some exceptions. Coverage of and implementation of cost effective tests and treatments may either reduce the use, cost, and side effects of treatments (if the alternative is to treat all without testing) or may increase the use of treatment that was previously discouraged by expectation of side effects and high cost. Examples of cost effective use and coverage are provided for breast, small cell lung, and colon cancer. Optimal coverage may involve positive cost sharing if there is heterogeneity in insureds’ values of health improvements or side effects, or if test results give varying probabilities of effective treatment.This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
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Cost Sharing in Insurance Coverage for Precision Medicine, Mark V. Pauly
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