Value-Based news
Value-Based Insurance Design: Biting the Bullet for Better Outcomes
Louise Kertesz, AHIP HI-WIRE
June 15, 2010
Value-Based Insurance Design's record of improving quality and lowering costs—and its potential to support key goals of health reform—were a pervasive theme at AHIP's Institute 2010.
VBID's approach is to remove barriers to patients' receiving high-value health services—those that prevent illness or keep chronic conditions from worsening—requiring costly treatment and eroding quality of life.
"There is substantial underutilization of high-value health services," including wellness, screening, diagnostic testing, various therapies, and monitoring, said A. Mark Fendrick, MD, codirector, Center for Value-Based Insurance Design, at the University of Michigan.
"The current approach to cost sharing is predominately based on the cost - not value - of medical services," he said. For example, generic drugs require the lowest co-pay and non-preferred brands the highest. Yet, this "one size fits all" cost shifting does not recognize that some non-preferred brands may have high value in controlling a chronic illness.
There is no logic for requiring the same co-pay for a toenail fungus drug as for a drug that controls asthma, he said.
Research has shown that high co-pays reduce adherence to appropriate medication use. Up to 60 percent of chronically ill patients have poor adherence to evidence-based treatment, with costs from poor adherence estimated to exceed $100 billion annually, Fendrick said.
A number of employers have followed the lead of Pitney Bowes and the City of Asheville, N.C., and implemented VBID for conditions including diabetes, asthma, and cardiovascular disease. These programs generally waive or reduce co-pays for necessary drugs and tests and provide counseling from a community pharmacist. To receive these enhanced benefits, an employee must adhere to evidence-based protocols. The programs have documented cost savings and improved health outcomes.
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Pitney Bowes' success with VBID prompted Highmark to offer a VBID product in 2007. The product initially targeted the entire member population and focused on prescription drugs for eight conditions, with employers choosing the condition and the cost sharing, said Marcia Bondi, director—product management and development at Highmark.
Fewer than 20 employers now participate, she said. "Employers are not as ready as we think" for VBID, she said. "The concept is still relatively new and not well understood, even among national accounts," she said.
"Some employers with a young workforce did not see savings because they were not right for the program," she said. However, with the percentage of members with chronic conditions increasing annually, interest in VBID continues to grow among clients and consultants.
Highmark is revamping its program to target the high-risk population with 10 conditions. The program now requires members to sign up with a health coach and complete a wellness profile.
Highmark has developed actuarial and other criteria to select employers who could benefit from VBID. Employers must be "willing to bite the bullet," she said, because prescription co-pays and health coaching costs for newly-engaged members will increase with VBID. But employers can expect savings in direct medical costs, reduced absenteeism, and improved presenteeism.
Cristie Upshaw Travis, CEO of the Memphis Business Group on Health, said employers should identify the cost-drivers in their populations and determine if employees have easy access to appropriate medical services. Employers can motivate employees through benefit design. "It's one of the strongest levers that employers have" to change behaviors, she said.
"We've watched Asheville and the Midwest Business Group on Health" VBID programs for diabetes, said Deneen Vojta, MD, senior vice president, Center for Health Reform & Modernization at UnitedHealth Group. "We want to put this on steroids nationally" through United's Diabetes Prevention and Control Alliance, she said.
United's program has initially partnered with Walgreens for pharmacist counseling of diabetics and with the YMCA of the USA for lifestyle coaching to keep people with pre-diabetes from developing the disease through exercise and proper nutrition.
The program is free to individuals covered by United Health Group policies. United will reimburse pharmacists for their services and will pay YMCA coaches for each participant as well as reward the coaches for outcomes in weight reduction.
United is offering its program to its insurer competitors as well as to plan sponsors.
Since 2007, Sentara Healthcare, an integrated delivery system including Optima Health Plan, has offered up to $546 annually in reduced premiums to employees who participate in wellness programs. It contributes up to $420 to the health savings accounts of employees who participate in disease management. Participants in these programs variously work with health coaches or case managers and complete all evidence-based care.
With the increase in appropriate care, tests, and prescription drugs, Sentara saw its costs go up in 2008. "It scared us," said Karen Bray, vice president of clinical care services at Optima Health. But in 2009, costs started coming down, and "the disease management cohort saw enormous reductions in hospitalizations and ER visits," she said.
And in 2009, Sentara saw a 10 percent decrease in its expected cost trend, she said. "The program saved enough on people who are sick to allow us to offer a wellness program to all our employees."
Speaking at the Institute, David Cutler, professor of applied economics at Harvard, said, "reform legislation will live or die on our ability to lower costs. We have to figure out how to save money on medical care." Many in the industry believe VBID is one way to do that.
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Source: http://www.ahiphiwire.org/News/default.aspx?doc_id=598780
