This month, NPC released a new report, “Value-Based Insurance Design Landscape Digest,” focusing on an important approach being used by leading edge employers for improving patient health outcomes – Value-Based Insurance Design (VBID). Featuring case studies, the report takes a closer look at how VBID is helping employers nationwide “get more health out of every health care dollar.”
The report, “Value-Based Insurance Design Landscape Digest,” authored by Dr. A. Mark Fendrick, Co-Director of the Center for Value-Based Insurance Design at the University of Michigan, explains how companies are using VBID to lower or eliminate financial barriers to the purchase of “high-value” drugs or health care services with the intention of improving adherence to therapy and avoiding more expensive future medical costs, such as hospitalization. These benefit design changes are most often coupled with education and other strategies for consumer engagement in order to have maximum impact.
“Under a VBID program, the alignment of financial incentives – for patients and providers – encourages the use of high-value care, while discouraging the use of low-value or unproven services. Ultimately, this can produce more health at any level of health care expenditure,” said Dr. Fendrick.
In the report, Fendrick explains how VBID encompasses several key principles: value equals the clinical benefit achieved for the money spent; health care services differ in the health benefits they produce; and the value of health care services depends upon the individual who receives them. One of the essential premises of VBID is the more clinically beneficial a therapy is for a patient, the lower the patient’s cost share, therefore reducing barriers to access for these services. Conversely, treatments that are not proven to be effective for certain patients may have higher co-payments associated with them.
The report also highlights how companies like Caterpillar, Inc., Hannaford Brothers Company, and UnitedHealthcare, among others, have improved employee health via one of the four basic approaches to VBID:
- Design by service, in which copayments or coinsurance are waived or reduced for select drugs or services, such as statins or cholesterol tests, no matter which patients are using them.
- Design by condition, in which copayments or coinsurance are waived or reduced for medications or services, based on the specific clinical conditions with which patients have been diagnosed.
- Design by condition severity, in which copayments or coinsurance are waived or reduced for high-risk members who would be eligible for enrollment in a disease management program.
- Design by disease management participation, in which high-risk members who actively participate in a disease management program are provided reduced or waived copayments or coinsurance.
VBID, along with comparative effectiveness research, could assist public and private payers in realizing the best value for their health care dollar while improving the quality of health care services and employee health. These programs already are leading to a healthier workforce, with reductions in absenteeism, medical disability, and productivity losses associated with health conditions. Implementing them on a wider scale could help policy makers reach their goal of improving quality in the system while ‘bending the curve’ of overall health care spending in the right direction, the report notes.
The study and a video interview with Dr. Fendrick are available on NPC’s website at www.npcnow.org.