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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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Value-Based Insurance Design

Background Federal and State Policy EffortsDiscussion

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Improving 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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Role 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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Impact 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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Inspiration

“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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Cost-sharing Affects

Mammography Use by Medicare Beneficiaries

Trivedi A. NEJM. 2008;358:375-383

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Effects 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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Impact 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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Value-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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MI-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.

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Value-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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Emerging 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).

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Federal and State Policy Efforts

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Patient 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.”

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Receiving 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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Value-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

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Support 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

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Value-Based Insurance Design Role in State Health Reform

State Employees Benefit PlansConnecticutOregonVirginiaMinnesota MaineState ExchangesMarylandCaliforniaCO-OPsMedicaid

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CMS 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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V-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.”

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V-BID in Traditional Medicare

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2015 Medicare Advantage Call

Letter Encourages V-BID

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Clinical

Nuance to Align Payer and Consumer Incentives

Many initiative are restructuring provider incentives: Payment reformGlobal budgetPay-for-performanceBundled paymentsTiered network creationHealth information technology

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Clinical

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

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Innovations 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

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Moving 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.

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Discussion

www.vbidcenter.org@um_vbidvbidcenter@umich.edu

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By: mitsue-stanley
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Type: Public

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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 Download Presentation

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