Role of Value Based Benefit Design in Value Based Purchasing

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Role of Value Based Benefit Design in Value Based
Purchasing

• Andrew Webber, President and CEO
• National Business Coalition on Health
• Integrated HealthCare Association
• Mini-Summit VII
• February 29, 2008

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Mini Summit Objectives

• To define value based benefit design
• To better understand the role of value based
  benefit design as a key component of value based
  purchasing
• To present philosophy behind and pioneering
  examples of value based benefit design

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National Business Coalition on
Health (NBCH)

• Membership of 60 business and health coalitions
• National network of thousands of employers and 25
  million employees and their dependents
• Mission Health and health care reform, through
  value based purchasing, community by community

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Coalitions in Different Markets

• Pacific Business Group on Health
• New York Business Group on Health
• Buyers Health Care Action Group
• Midwest Business Group on Health
• Florida Health Care Coalition
• Greater Detroit Area Health Council
• Puget Sound Health Alliance

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NBCH at Work

• Best Practice Distribution Network
• - eValue8 Common RFI for health plans
• - Leapfrog Survey, Bridges to Excellence,
• Asheville Model
• - College for Advanced Management of
• Health Benefits
• National Advocacy
• - Congress, CMS, CDC, AHRQ, NQF, QASC,
• HQA, AQA, NCQA

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Value Based Purchasing
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Value Based PurchasingMeasure, Report, and
Reward

• Four Pillars
• Standardized Performance Measurement
• Public Reporting
• Payment Reform
• Consumer Activation/Consumer Choice
• Must be Driven by Purchasers/Payers.
• Creates Impetus for System Transformation

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VBPs Aim Behavior Change

• Principally at provider and consumer level
• Payment Reform changing provider (i.e. supply
  side) behavior through reimbursement incentives
  primary focus of this conference
• Consumer activation changing consumer (i.e.
  demand side) behavior through mix of support
  mechanisms including use of incentives focus of
  this Mini-Summit

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Consumer Activation and the Role of Value Based
Benefit Design
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Consumer Activation/Consumer Choice

• The Goal To influence the individual consumer
  to make informed choices at many levels
• to live a healthy lifestyle
• to seek preventive services and care when sick
• to share in, and make the right, treatment
  decisions
• to comply with treatment regimen and self-manage,
  particularly chronic disease
• to select a plan, hospital, physician.

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A Few Sound Bites

• Consumer Activation/Consumer Choice
• Area of greatest influence for employers
• Change the entitlement mentality
• Focus on front end health not just health care
• Establish a principle of self-responsibility but
  with robust support
• Support strategy includes creative mix of
  economic incentives, peer support, timely
  information, coaching/counseling

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Consumer Activation Strategies

• The Beat Goes On and On and On
• The Healthy Corporation
• Worksite Wellness, the Healthy Cafeteria
• Onsite Clinics
• Disease Management and Employee Assistance
  Programs
• Internet Education and PHRs and
• Value Based Benefit Design

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What is Value Based Benefit Design?

• An NBCH Working Definition
• The use of incentives, through the design of
  employee benefits, to encourage consumers to
  choose healthy behaviors, to seek high value
  health services, and to select high performance
  plans and providers.

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What is Value Based Benefit Design?

• Some Underlying Principles
• Individuals have a critical role to play in
  producing good health outcomes
• Individual cost sharing is both inevitable and
  needed in eliminating the consumer entitlement
  mentality. But blunt cost shifting can be
  counterproductive
• Incentives influence consumer behavior and should
  be aligned with outcomes we want to achieve
• Consumer incentives should be aligned with
  economic incentives for providers and other
  suppliers of health and health care services.

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VBBD Applied to Health Insurance

• Basic health insurance benefit architecture
  should tier medical services by evidence of
  effectiveness - and providers by evidence of
  performance
• Co-pay levels should vary by tiers in a way to
  steer individuals toward effective services and
  high performing providers. And vice versa.
• Economic incentives, through value based benefit
  designs, can influence better consumer choices
  but should be joined with timely information,
  coaching, and peer support

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Examples of VBBD

• Choosing Healthy Lifestyles
• Destiny Health Vitality Awards Program
• - Accumulate points for wellness
• activities/outcomes redeemed for
  gifts/trips
• United HealthCare Health Promotion Plan
• - Meet certain health maintenance goals,
• monthly insurance premium lowered

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VBBD Example Seeking High Value Medical Services

• HealthMapRx (aka The Asheville Model)
• Reinvention of community pharmacy through
  consumer coaching/counseling
• With waiving of copays for high value medications
  for certain chronic illnesses
• Led by American Pharmacists Association
  Foundation
• Supported by NBCH through national distribution
  agreement

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Asheville Program Results

• Over 1500 patients from 10 employers enrolled for
  diabetes, asthma, hypertension, lipid therapy
  management, and depression
• Patients realize improved outcomes increased
  medication adherence
• 50 reduction in sick days
• Zero workers comp claims in the City diabetes
  group over 6 years
• Average net savings of 1,600-3,200 per person
  with diabetes each year from year 2 on
• Employers saved over 5,000,000 in health care
  costs

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VBBD Example Choosing High Value Health Plan

• General Motors Health Plan Steerage Program
• Measurement of Health Plan performance
• Using eValue8, NCQA, and comparative cost data
  plans
• Measures total plan contribution to quality and
  cost management
• Results used to steer employees to high
  performance plans through premium share
  differentials

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Health Plan Scoring Table
HMO A
HMO B
HMO C
HMO D
Raw Score Flex Score (25)
129 5
221 25
211 24
176 16
eValue8 RFI Results
Raw Score Flex Score (20)
7 7
14 14
13 13
13 13
HEDIS / CAHPS (CARS evaluation)
Commendable 2
Accredited 1
Excellent 5
Excellent 5
NCQA Accreditation
Raw Score Flex Score (5)
14
44
42
30
Total Quality Score (50)
24 23 47
20 13 33
19 12 31
22 14 36
National Rate Rankings Relationships of
rates to Local Indemnity Total Cost Score (50)
Total Quality Cost (100)
61
77
73
66
Below Avg
Benchmark
Strong
Rating
Good
Sample Employee Contribution
100
20
40
55
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In Summary

• Value Based Benefit Design (VBBD) is a key
  element of Value Based Purchasing focused on
  influencing consumer behavior
• VBBD is defined (by NBCH) as the use of consumer
  incentives, through employee benefit design, to
  influence choice of healthy behaviors, high value
  medical services, and high performance providers.
  
• To be optimally effective, VBBD should be joined
  by other consumer support mechanisms.

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Contact information

• Andrew Webber, President Chief Executive
  Officer
• National Business Coalition on Health
• 1015 18th Street, N.W., Suite 730
• Washington, DC 20036
• [phone]
• awebber_at_nbch.org
• www.nbch.org
• SAVE THE DATE
• NBCH 13th Annual Conference
• November 9-11, 2008
• JW Marriott Pennsylvania Ave, Washington, DC