Differences in the Knowledge and Adoption of H' pylori by Generalist and Specialist Physicians

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Value-Based Insurance Design Bridging the
Divide Between Quality Improvement and Cost
Containment
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Health Care Cost per Vehicle Built in US
Per Vehicle Health Care Cost
Wall Street Journal February 27, 2007.
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Health Care Crisis Acknowledge the Cost /
Quality Divide

• Recent health care cost growth around 10
• Increasing substantially faster than inflation
• Intense financial pressure on business community

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Health Care Crisis Acknowledge the Cost /
Quality Divide

• Number of uninsured well over 40 million
• Patient premiums and contributions at point of
  service continue to escalate

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Health Care CrisisAcknowledge the Cost /
Quality Divide

• Substantial underutilization of essential medical
  services
• Impact on health outcomes must be measured before
  we can determine whether moderation of cost
  growth is considered a good thing
• Motivation for health insurance must be revisited

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• The purpose of the health care system is not to
  minimize costs but to deliver value to patients,
  that is, better health per dollar spent.
• Porter and Teisberg. JAMA. 20072971103.

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Health Care Crisis Acknowledge the Cost /
Quality Divide

• The tradeoffs between access to medical care and
  how to pay for it is a complex and extremely
  political issue

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Dealing with the Health Care Cost Crisis
Interventions to Control Costs

• Denial
• Prior Authorization
• Drive to Canada
• Disease Management

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Benefit Design TrendsDisease Management

• Manage the most costly patients
• Improves outcomes
• May reduce costs - probably not
• Lack of reduction in copays for recommended
  services do not reflect investment in disease
  management

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Dealing with the Health Care Cost Crisis
Interventions to Control Costs

• Denial
• Prior Authorization
• Drive to Canada
• Disease Management
• Pay Clinicians and Hospitals Less
• Make Beneficiaries Pay More

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Benefit Design Trends Cost Sharing Tiered
Formularies

• Copay set on drug price, not value
• Generic drugs - lowest copay
• Preferred brand - middle
• Non-preferred brand - highest

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Impact of Increased Cost Sharing on Utilization

• A growing body of evidence demonstrates that cost
  shifting leads to decreases in essential and
  non-essential care

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Compliance with Statin Therapy Stratified by Mean
Prescription Copayment
0 to lt10
10 to lt20
gt20
Ellis JJ. J Gen Intern Med 200419639-646.
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Benefit Design Trends Cost Sharing Consumer
Driven Health Plans

• Centerpiece of competitive market based reform
  proposals
• Charge consumers high out-of-pocket fees
• Will likely reduce costs in the short run
• Likely will lead to worse clinical outcomes

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Getting Services to People Who Need Them Should
the Patient Decide?

• If the patient is not the appropriate decision
  maker, the system should provide guidance and
  incentives to promote better decisions

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Getting Services to People Who Need Them Who
Gets the Essential Care?

• Everybody
• Those who demand it
• Those who can afford it
• Those who need it

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Number Needed to Treat to Prevent a Cardiac Event
with Statins, by Prevention Category
NNT to prevent CV event
Ellis JJ. J Gen Intern Med 200419639-646.
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No Difference in Statin Compliance Stratified by
Prevention Category
Secondary prevention cohort
Primary prevention cohort
Ellis JJ. J Gen Intern Med 200419639-646.
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Impact of Increased Cost Sharing on Utilization

• A strategy to offset the undesirable decrease use
  of essential services due to cost shifting is
  warranted

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Fiscally Responsible, Clinically Sensitive
Benefit Design

• Cost sharing set on value, not price
• Highly valued services - lowest copay
• Effective yet expensive - middle
• Unproven or marginal benefit - highest

Fendrick, Chernew. Am J Managed Care. 20061.
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Value Based Insurance Design Economic Effects

• Amount saved by preventing adverse consequences
  is directly related to level of clinical
  targeting
• Incremental costs of the increased use of high
  valued services can be subsidized by higher cost
  sharing for services of lower value

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Value-Based Insurance Design Implementation
Evaluation
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Value Based Insurance Design Targeting High
Valued Services

• Reduce cost sharing for high valued services

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Value-Based Insurance Design Evaluating Evidence
Based Benefits

• Conglomerate of 2,700 Properties Worldwide
• 156,000 Covered Lives
• VBID pursued as a strategy to balance need to
  control costs, improve quality, and retain a
  competitive benefit program for our associates
• Lowered copays for Statins, ACE inhibitors,
  Hypoglycemic agents, Beta blockers, Inhaled
  steroids

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Value Based Insurance Design Targeting is Key

• Reduce cost sharing for high valued services
• Target specific patient groups
• Only individuals with certain clinical
  indications receive co-pay change for specific
  service

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Value Based Insurance Design Examples
Predictive Modeling

• Diabetes Mellitus
• Medicare first-dollar coverage (co-pays waived)
  of ACE inhibitors resulted in nearly one million
  life years gained and a net savings of 7.4
  billion over the cohort lifetime

Rosen AB, et al. Ann Intern Med. 200514389.
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VBID for Diabetes MellitusThe Asheville Project

• Intensive pharmacist management
• Focus on coached self-management
• Co-pays waived for participation
• Five year outcomes included
• Marked increases in medication adherence
• Diabetes performance measures 2-3x higher
• Overall costs 58 below expected trend
• Average annual sick leave halved

Cranor et al. J Am Pharm Assoc, 2003.
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M Healthy Focus on Diabetes Essential Services

• All UM employees dependants with diabetes are
  receiving co-pay reductions for
• ACE Inhibitors and ARBs
• Other antihypertensives
• Statins
• Glycemic agents
• Antidepressants

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M Healthy Focus on Diabetes Intervention

• Copay reductions maintain existing incentive
  structure
• Medications
• Tier 1 (Generics) Copays waived
• Tier 2 (Preferred Brand) Copays reduced 50
• Tier 3 (Non-preferred brand) Copays reduced 25
• Diabetes eye exams Copays waived

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M Healthy Focus on Diabetes Evaluation

• Controlled Prospective Trial
• Allison Rosen, PI
• Outcome Measures
• Drug adherence
• Medication spending
• Total health care spending
• Selected clinical outcomes

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Implementing VBIDWhere to Start?

• Identify partners and data
• Care management and claims (ActiveHealth
  Management)
• Pharmacy Benefit Manager
• Built system to enable customized formulary
• Develop custom formulary
• Determine level of clinical targeting
• Set co-pay reductions

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Value Based Insurance Design Essential Partners

• Information technology
• Clinical effectiveness research
• Disease management
• Pay for Performance programs
• Benefit Consultants
• Health Plans
• PBMs

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Value Based Insurance Design Preserve Quality
and Contain Cost

• Will increase value of medical expenditures
• Not all care is subsidized, only valued care
• Likely to slow rate of cost growth
• Targeting will improve return on investment
• Copay reductions can be funded by
• Clinical events prevented downstream
• Copay increases on non-essential or unproven
  services

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Value-Based Insurance Design Translating
Research into Policy

• Promote the VBID concept to stakeholders
• Perform evaluations of value-based
  implementations nationwide
• Assist federal and state policymakers develop
  initiatives to expand health insurance coverage
• Advise political candidates on clinical effects
  and economic viability of reform initiatives

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Center for Value Based Insurance Design Preserve
Quality and Contain Cost

• Engages in the development, evaluation and
  promotion of insurance products that encourage
  the efficient expenditures of health care dollars
  and optimize the benefits of care
• www.vbidcenter.org

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