IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/24095.html
   My bibliography  Save this paper

Cost Sharing in Insurance Coverage for Precision Medicine

Author

Listed:
  • Mark V. Pauly

Abstract

This paper describes current pattern of insurance coverage for precision medicines and, especially, companion diagnostics and explores what coverage would improve efficiency. We find that currently coverage is common for tests and treatments with clinical acceptance used at high volumes but is haphazard across both private insurers and Medicare for precision medicines in general. Analysis of the case of homogenous patient preferences finds that discovery and use of the test that converts an ordinary drug into a precision drug can either increase or decrease total spending, and might call for full or no coverage of test and treatments. Heterogeneity in marginal benefits from testing and treatment can call for partial coverage. Finally, varying threshold levels for diagnostic test results can lead to a demand curve to test and treatment that calls for partial cost sharing. Numerical examples and case studies of several test-treatment combinations illustrate these points.

Suggested Citation

  • Mark V. Pauly, 2017. "Cost Sharing in Insurance Coverage for Precision Medicine," NBER Working Papers 24095, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24095
    Note: EH
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w24095.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jui-fen Rachel Lu & Karen Eggleston & Joseph Tung-Chieh Chang, 2018. "Economic Dimensions of Personalized and Precision Medicine in Asia: Evidence from Breast Cancer Treatment in Taiwan," NBER Chapters, in: Economic Dimensions of Personalized and Precision Medicine, pages 237-272, National Bureau of Economic Research, Inc.
    2. Rositsa Koleva-Kolarova & James Buchanan & Heleen Vellekoop & Simone Huygens & Matthijs Versteegh & Maureen Rutten-van Mölken & László Szilberhorn & Tamás Zelei & Balázs Nagy & Sarah Wordsworth & Apos, 2022. "Financing and Reimbursement Models for Personalised Medicine: A Systematic Review to Identify Current Models and Future Options," Applied Health Economics and Health Policy, Springer, vol. 20(4), pages 501-524, July.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:24095. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.