Mark Fendrick MD University of Michigan Center for ValueBased Insurance Design wwwvbidcenterorg amfenumichedu umvbid 1 Value Based Insurance Design Background Federal and State Policy Efforts ID: 760518
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Value-Based Insurance DesignMark Fendrick, MDUniversity of Michigan Center for Value-Based Insurance Designwww.vbidcenter.org amfen@umich.edu@um_vbid
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Slide2Slide3Value-Based Insurance Design
Background Federal and State Policy EffortsDiscussion
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Slide4Improving Care and Bending the Cost Curve
The past several decades have produced remarkable medical innovations resulting in impressive reductions in morbidity and mortality Regardless of these advances, cost growth remains the principle focus of health reform discussions Despite unequivocal evidence of clinical benefit, Americans systematically underuse high-value services across the care spectrum Attention should turn from how much to how well we spend our health care dollars
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Slide5Role of Beneficiary Cost-Sharing in Medical Spending
For today’s discussion, it is important to distinguish between the costs paid by the health plan or third party administrator and out-of-pocket costs paid by the beneficiary
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Slide7Impact of Cost-Sharing on Health Care Utilization
Ideally, consumer cost-sharing levels would be set to encourage the clinically appropriate use of health care services The archaic “one-size-fits-all” approach to consumer cost-sharing fails to acknowledge the differences in clinical value among medical interventionsA growing body of evidence concludes that increases in cost-sharing leads beneficiaries to reduce the use of essential care, which in some cases, leads to greater overall costs
Goldman D. JAMA. 2007;298(1):61–9.
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Slide8Inspiration
“I can’t believe you had to spend a million dollars to show that if you make people pay more for something, they will buy less of it.”Barbara Fendrick (my mother)
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Slide9Cost-sharing Affects
Mammography Use by Medicare Beneficiaries
Trivedi A. NEJM. 2008;358:375-383
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Slide10Slide11Effects of Increased Copayments for Ambulatory Visits for Medicare Advantage Beneficiaries
Copays increased:from $7.38 to $14.38 for primary carefrom $12.66 to $22.05 for specialty careremained unchanged at $8.33 and $11.38 in controlsIn the year after copayment increases: 19.8 fewer annual outpatient visits per 100 enrollees2.2 additional hospital admissions per 100 enrolleesEffects worse in low-income individuals and beneficiaries with chronic illness
Trivedi A. NEJM. 2010;362(4):320-8..
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Slide12Slide13Impact of Cost-Sharing on Health Care Disparities
Rising copayments may worsen disparities and adversely affect health, particularly among patients living in low-income areas.
Chernew M. J Gen Intern Med 23(8):1131–6.
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Slide16Value-Based Insurance Design
Sets consumer cost-sharing level on clinical benefit – not acquisition price – of the serviceReduce or eliminate financial barriers to high-value clinical servicesSuccessfully implemented by hundreds of public and private payers
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Slide17MI-FREEE: Better Quality Without Higher Costs
Assessed impact of free access topreventive medications for Aetnamembers with history of MIRandom assignment by plan sponsor“Enhanced prescriptioncoverage improved medicationadherence and rates of firstmajor vascular events anddecreased patient spendingwithout increasing overallhealth costs.”
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Choudhry
NK, Avorn J, Glynn RJ, Antman EM, Schneeweiss S, Toscano M, et al. Full coverage for preventive medications after myocardial infarction. N Engl J Med. 2011 Dec 1;365(22):2088–97.
Slide18Value-Based Insurance Design:
Improving Adherence Without Increasing Costs
July 2013 Health Affairs:Systematic review of 13 studiesV-BID “consistently associatedwith improved adherence”Lower consumer out-of-pocketcostsNo significant increase intotal spending by payers
Lee J. Health Affairs.. 2013;32(7):1251-1257
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Slide19Emerging Best Practices in V-BID Implementation
A 2014 Health Affairs evaluation of 76 V-BID plans reported that programs that:were more generoustargeted high-risk individualsoffered wellness programsavoided disease managementused mail-order prescriptions had greater impact on adherencethan plans without these features
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Choudhry. N.
Health Affairs
. 2014;33(3).
Slide20Federal and State Policy Efforts
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Slide21Patient Protection and Affordable Care Act:
V-BID Included
“2713(c)
Value-
based Insurance Design. –The Secretary may develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.”
Slide22Receiving an A or B rating from the United States Preventive Services Taskforce (USPSTF)Immunizations recommended by the Advisory Committee on Immunization Practices (ACIP)Preventive care and screenings supported by the Health Resources and Services Administration (HRSA)Over 100 million Americans have received expanded coverage of preventive services
Sec 2713: Selected Preventive Services be Provided without Cost-Sharing
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Slide23Value-Based Insurance Design“Clinically Nuanced, Fiscally Responsible”
To date, most V-BID programs have focused on removing barriers to high-value services
As barriers are reduced, utilization increases
V-BID programs that discourage use of low-value services are being implemented
Choosing Wisely
V
-BID programs have broad multi-stakeholder and bipartisan political support
Slide24Support for Value-Based Insurance Design
HHS - National Quality StrategyCBOSEIUMedPACBrookings InstitutionThe Commonwealth FundNBCHPCPCCPartnership for Sustainable Health Care
National Governor’s Assoc.Academy of ActuariesBipartisan Policy CenterKaiser Family FoundationNBGHNational Coalition on Health CareUrban InstituteRWJFIOM – Essential Health Benefits
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Lewin.
JAMA.
2013;310
(16):1669-1670
Slide25Value-Based Insurance Design Role in State Health Reform
State Employees Benefit PlansConnecticutOregonVirginiaMinnesota MaineState ExchangesMarylandCaliforniaCO-OPsMedicaid
Slide26CMS Rules (CMS-2334-F) Enable V-BID in Medicaid
Plans may vary cost-sharing for drugs, outpatient, inpatient, and emergency department visits Plans may target cost-sharing to specific groups of individuals based on clinical information (e.g., diagnosis, risk factors) Plans may vary cost-sharing for an outpatient service according to where and by whom the service is provided
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Slide27V-BID Prominently Featured inHealthy Michigan Plan
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Sec 105D(1)(e), plans may waive consumer copayments, “to promote greater access to services that prevent the progression and complications related to chronic diseases.”Sec 105D(1)(f), assigned to “design and implement a copay structure that encourages the use of high-value services, while discouraging low-value services.”Sec 105D(5), assigned to “implement a pharmaceutical benefit that utilizes copays at appropriate levels allowable by CMS to encourage the use of high-value, low-cost prescriptions.”
Slide28V-BID in Traditional Medicare
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Slide292015 Medicare Advantage Call
Letter Encourages V-BID
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Slide30Clinical
Nuance to Align Payer and Consumer Incentives
Many initiative are restructuring provider incentives: Payment reformGlobal budgetPay-for-performanceBundled paymentsTiered network creationHealth information technology
Slide31Clinical
Nuance to Align Payer and Consumer Incentives
Unfortunately, “supply-side” initiatives have historically paid little attention to consumer decision-making or the “demand-side” of care-seeking behavior:Shared decision-makingLiteracyBenefit design
Slide32Innovations in Value-Based Insurance Design
Combines wellness programs, advanced member engagement, value-based insurance design, and high-performing providersQualify for lower co-payments only if you have one or more conditions and use a high-value provider:End-stage renal diseaseCongestive Heart failureCoronary artery diseaseCancerAligns clinical goals of supply-side (ACO) and demand-side (V-BID) initiatives
Diabetes
Hypertension
Osteoarthritis
Slide33Moving Forward
The ultimate test of health reform will be whether it improves health and addresses rising costs V-BID should be part of the solution to enhance the efficiency of health care spending
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Mullainathan
S. When a Co-Pay Gets in the Way of Health. The New York
Times. 2013 Aug 10.
Slide34Discussion
www.vbidcenter.org@um_vbidvbidcenter@umich.edu
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