Is Value-Based Insurance Design All It’s Cracked Up To Be?
There continues to be a lot of buzz about value-based insurance design (VBID). VBID is the idea that consumers’ out-of-pocket medical costs should be based on the value of a service to their health and not the price. Health Affairs defined VBID as “an approach that attempts to improve the quality of care by selectively encouraging or discouraging the use of specific healthcare services, based on their potential benefit to patients’ health, relative to their cost.”
Treatments, medications, and procedures evidence has shown to be effective and recommended for a condition are provided at no or low cost to the patient. Care that is ineffective or unnecessary is priced higher to discourage utilization. Corporations like Pitney Bowes, Caterpillar, and Marriott, and organizations like Oregon Educators Benefit Board and the Colorado Springs School District 11 have implemented several models of VBID. Reported outcomes include savings from reduced adverse events like hospitalizations and emergency department visits.
Some Medicare Advantage Special Needs Plans have designed their benefit structure along the lines of the value-based model. For example, members who have diabetes have $0 copays for necessary medications and may have additional benefits like gym classes, cooking classes, and Certified Diabetes Educator access.
Designing a value-based benefit for Medicare patients with chronic conditions begins with a review of the peer-reviewed treatment guidelines. These treatment guidelines can be accessed at https://www.guideline.gov/. Medications designated as first-line therapy should be provided at very low or $0 copays. Medications lower on the list, such as third- or fourth-line therapy, can be placed on a different/higher tier. Lab tests, provider visits, and other recommended therapies (physical therapy, exercise, dietary requirements, etc.) can also be provided at low cost to the member. Most chronic conditions lend themselves to a value-based design. Barriers like the cost of a custom formulary will hopefully be resolved by more industry uptake of VBID.
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Gorman Health Group can map the right strategy for realizing value-based care by aligning clinical and revenue cycle workflows for faster and more accurate payment, redesigning care delivery models to benefit from outcomes-based reimbursement, transforming the quality and effectiveness of care, as well as designing a value-based benefit for your members with chronic conditions. Visit our website to learn more >>
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