In a webcast on Thursday, A. Mark Fendrick, M.D., director of the University of Michigan Center for Value-Based Insurance Design, shared the message that it is time for the U.S. healthcare system to move away from laser focusing on how much is being spent and move toward analyzing what it gets from the money that is spent.
One way to do this, he said is through value-based insurance design. VBID is a plan where care that is rated as high-value is offered free or at a low cost to patients. Low-value care, on the other hand, would cost patients more out of pocket. The goal is to increase the use of the more necessary care.
"Insurers have a one-size-fits-all approach," he said. "Patients pay the same co-pay to see a cardiologist after a heart attack as they would a dermatologist for mild acne. They pay the same for a generic drug that would save a life heart disease as they would for a generic toenail fungus drug."
Carrot and stick
High-deductible plans are becoming more common, particularly among employer plans, which used to be more generous than those on the private market.
But trying to change patient behavior merely through high-deductible plans can backfire. Studies have shown that people may reduce getting expensive care, such as overuse of emergency rooms, when they have "skin in the game." The problem is, they also put off all care, including seeing a doctor for chest pain or asthma flare-ups which can lead to greater costs in hospitalizations down the road.
According to a 2013 Gallup poll, 30% of Americans have put off treatment because of cost. In a study where Medicare Advantage patients were asked to double the money they paid to physicians, physician visits were reduced by almost 20% per enrollee, Fendrick said. Those patients who went to their doctors less were hospitalized more frequently and cost more down the road.
"Americans underuse high-value services across the care spectrum," Fendrick said.
Results
Little has been reported on whether or not VBID actually discourages the use of "low-value" services. But the plans appear to be effective in creating incentives for individuals to increase preventive care.
It appears to be particularly effective in changing patients' medication habits. A study released in Health Affairs in February evaluated 76 VBID plans offered by a pharmacy benefit manager. They found the most effective plans increased medication adherence by up to 5%. These plans had more generous benefits, targeted high-risk patients, incorporated wellness programs and only offered the benefit via mail order.
The National Committee for Quality Assurance highlighted a list of groups that have borne positive results from implementing value-based activities into their plans.
Pitney Bowes reported that it saved $1 million from reduced complications after lowering copayments for diabetes and asthma medications. Oregon's plans for public employees and educators provide free preventive programs and low copays on chronic care medications coupled with higher copays for things like low-value surgeries. The plan has seen greater use of preventive services, a reduction in the number of smokers and increased revenue.
Provider incentives
Fendrick said providers should all be backers of VBID for a couple of reasons. First, benchmarks and scorecards are tied to things like drug adherence for COPD and heart disease. And research has shown VBID can improve adherence.
Second, with the move toward value-based care and accountable care organizations, hospitals will want to see patients managed better at a lower cost. Fenrick said there are always efficiencies and cost savings achieved when patients receive the right diagnostics and medications.
He said that reducing costs doesn't ensure patient adherence, but VBID is one way to align patient and physician incentives. For instance, at his internal medicine practice, he is given a bonus when his diabetic patients get an eye or foot exam. One of the biggest plans in his area doesn't pay for that until a patient has met his or her deductible. He has been told by patients they won't get the exams until their deductibles are met.
"We need to make sure health plans make it easy for patients to do the exact same things we want them to do," he said.