value-based insurance design€¦ · denial prior ... dealing with the health care cost crisis...
TRANSCRIPT
Value-Based Insurance Design:Returning Health and Wellness to
the Health Care Cost Debate
A. Mark Fendrick, MDUniversity of Michigan Center for Value-Based Insurance Design
www.vbidcenter.org
Value-Based Insurance Design:Returning Health and Wellness to
the Health Care Cost Debate
Returning Health to the Health Care Debate
Substantial underutilization of high value
health care services persists
Returning Health to the Health Care Debate
Cost growth is the principle focus of health
care reform discussions
“The nation’s long-term fiscal balance will be
determined primarily by the future rate of
health care cost growth.”
Peter Orszag, Director, Congressional Budget Office
Testimony before the Senate Budget Committee,
June 21, 2007.
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior authorization
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior authorization
1-800-NO-WAY
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior authorization
1-800-NO-WAY
Drive to Canada
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior Authorization
Disease Management
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior Authorization
Disease Management
Lack of copay relief for recommended services
does not reflect investment for DM
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior Authorization
Disease Management
Generic Drug Programs
Dealing with the Health Care Cost Crisis
Generic Substitution Programs
It is important to distinguish between
generic substitution and therapeutic
substitution programs
SimvastatinZocor
Distinguishing between generic and
therapeutic substitution
US Food and Drug Administration. Electronic Orange Book. Available at:
http://www.fda.gov/cder/ob. Accessed February 20,2007.
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SimvastatinZocor
Distinguishing between generic and
therapeutic substitution
US Food and Drug Administration. Electronic Orange Book. Available at:
http://www.fda.gov/cder/ob. Accessed February 20,2007.
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CH3
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Distinguishing between generic and
therapeutic substitution
US Food and Drug Administration. Electronic Orange Book. Available at:
http://www.fda.gov/cder/ob. Accessed February 20,2007.
LIPITOR (atorvastatin calcium) Simvastatin
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Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior Authorization
Disease Management
Generic Drug Programs
Information Technology
"The bottom line is that research does indicate that, in
certain settings, health IT appears to facilitate
reductions in health spending if other steps in the
broader healthcare system are also taken to alter
incentives to promote savings. By itself, however, the
adoption of more health IT is generally not sufficient to
produce significant cost savings."
Peter Orszag, Director, Congressional Budget Office
Testimony before the Senate Finance Committee, July 18, 2008.
Dealing with the Health Care Cost Crisis
Health Information Technology
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior Authorization
Disease Management
Generic Drug Programs
Information Technology
Comparative Effectiveness
"More research on what works and what
doesn't, tied to financial incentives to
provide the higher-value care, could help to
reduce costs without harming quality. We
currently have a set of financial incentives
just for more care. And we need a set of
financial incentives for better care.”
Peter Orszag, Director
Office of Management and Budget
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Denial
Prior Authorization
Disease Management
Generic Drug Programs
Information Technology
Payment Reform
Dealing with the Health Care Cost Crisis
Interventions to Control Costs
Prior Authorization
Disease Management
Generic Drug Programs
Information Technology
Payment Reform
Make Beneficiaries Pay More
Dealing with the Health Care Cost Crisis
Shift Costs to Consumer
Increase premiums
Dealing with the Health Care Cost Crisis
Shift Costs to Consumer
Increase “one size fits all” cost sharing
for clinician visits, diagnostic tests and
prescription drugs
Dealing With the Health Care Cost Crisis
Shift Costs to Consumer
*Fourth-tier drug copay information was not obtained prior to 2004.
Kaiser Family Foundation. Employer Health Benefits: 2005 Annual Survey.
Average Drug Copay for All Workers Facing Some Cost Sharing
$7$13
$17$10
$22
$35
$74
$0
$20
$40
$60
$80
Generics Preferred Nonpreferred 4th Tier*
Ch
ange
($
)
2000 2005
Co-Payments for Expensive Drugs Soar
Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases.
By GINA KOLATA
April 14, 2008
Copay set on price, not value
Generic drugs - lowest copay
Preferred brand - middle
Non-preferred brand - highest
Benefit Design Trends:
Increased Cost Sharing at Point of Service
Impact of “Across the Board” Cost Sharing
A growing body of evidence demonstrates
that cost shifting leads to decreases in
essential and non-essential care
“I can’t believe you had to spend a
million dollars in grant funding to
show that if you make people pay
more for something they will buy
less of it.”
Barbara Fendrick (my mother)
Cost-sharing within Plan Design Affects
Adherence to Mammography
Trivedi. NEJM. 2008;358:375-383Travedi A. NEJM. 2008.
Benefit Design Trends: Cost Sharing
Consumer Driven Health Plans
CDHP plans connect the advantage of a better
informed consumer [a desirable outcome] to
higher out of pocket expenditures [uncertain]
Charge consumers high out-of-pocket fees
Will likely reduce costs in the short run
Likely will lead to worse clinical outcomes
Cost-sharing within Plan Design Affects
Adherence to Chronic Disease Drugs
Romero O, et al. Poster Presented at AMCP Conference, San Diego CA 2007
Value Based Insurance Design
A Role for “Soft Paternalism”
If the consumer is not the appropriate decision
maker, the system should provide incentives to
offset the undesirable decreased use of
essential services due to cost shifting
Value Based Insurance Design
Basic Principles
Medical services differ in the clinical benefit
provided
The clinical benefit derived from a specific
medical service depends on the patient using it
Value Based Insurance Design
Basic Principles
Value-based packages adjust patients' out-of-pocket costs for specific services based on an assessment of the clinical benefit achieved
The more clinically beneficial the therapy for the patient, the lower that patient's cost share
Can VBID be successfully implemented?
Value Based Insurance Design
Keys to Acceptance
46
Value Based Insurance Design
Improved Health at any Expenditure Level
Does it work?
0%
2%
4%
6%
8%
10%
12%
14%
Decrease in
Non-
Adherence
Ace/ ARBS Beta
Blockers
Diabetes Statins Steroids
Drug Class
Impact of VBID
Chernew,. Health Affairs. January 2008.
N Engl J Med 2005;353:487-97
Addressing Poor Adherence
Financial Incentives are not a Panacea
Medication Adherence
Side effects
Cognitive Impairment
Inadequate follow-up
No symptoms
Psych. problems
Missed provider
visitsBarriers to care
Lack of illness insight
Poor provider
relationship
Lack of belief in
benefit of Rx
Cost of Rx
Complexity of
treatment plan
What are the economic effects?
Value Based Insurance Design
Keys to Acceptance
Value Based Insurance Design
Economic Effects
Incremental costs of the increased use of high
valued services can be subsidized by:
1. Medical cost offsets
2. Reduction in absenteeism/disability costs
Value Based Insurance Design
“Clinically Sensitive, Fiscally Responsible”
“We believe that relying on clinically
informed financial incentives – for patients
and providers – will be useful in achieving
improved health outcomes for any level of
health care expenditures.”
Fendrick and Chernew. JGIM. May 2007.
Center for Value Based Insurance Design
Improved Health at any Expenditure Level
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