CPPR Health Policy Working Group: Kevin Callison (Tulane)

The Murphy Institute's Health Policy Working Group, a core initiative of the Center for Public Policy Research (CPPR), is an interdisciplinary network of Tulane researchers and practitioners whose work focuses on a broad range of issues at the intersection of health and the social sciences.

Each semester, the Health Policy Working Group invites members, participants, and guest speakers to present their latest research and receive feedback from the group members. The group is organized by Murphy Core Faculty members Mary Olson, Associate Professor Economics and Director of the Health Policy Program, and Kevin Callison, Associate Professor of Health Policy and Management in the Celia Scott Weatherhead School of Public Health and Tropical Medicine. Papers are distributed in advance to the participants who read the paper and prepare discussion questions for the presenter.

On Wednesday, February 11th, Kevin Callison will present his work on Louisiana’s Hepatitis C subscription model, "Spending to Save: The Subscription Model for Eradicating Hepatitis C in Louisiana" (Co-authored with Rena M. Conti, Jonathan Gruber, and Jacob Wallace).

Abstract:
High-cost pharmaceuticals pose a growing challenge for state Medicaid programs. In July 2019, Louisiana implemented a novel “subscription model” for hepatitis C virus (HCV) treatment, agreeing to a fixed payment in exchange for unlimited access to direct-acting antivirals (DAAs), a recently developed curative therapy for HCV. We provide the first empirical evaluation of the effects of this purchasing model on health care spending. Using Louisiana Medicaid claims from 2017–2023, we estimate difference-in-differences models comparing spending trends for individuals with HCV to those with diabetes or HIV and find that expanded access to DAAs significantly reduced medical spending for HCV patients. Average annual Medicaid spending declined by $900–$1,200 per enrollee with HCV following the implementation of the subscription model, with savings increasing over time. Scaled to treated individuals, these estimates imply annual spending reductions of roughly $5,300 per patient or 30% of baseline spending. Accounting for both treatment-related savings and reduced HCV transmission, we estimate that the subscription model generated approximately $60 million in medical spending savings net of costs for Louisiana Medicaid over its initial five-year period.