Consumer-Friendly Value
Based Insurance Design
Kim Bailey
Health Action 2014
January 23, 2014
Roadmap: Four Key Questions
• What is the policy context in which VBID is
emerging?
• What is VBID?
• How can VBID programs be designed in a
consumer-friendly way?
• What are the key differences between
VBID and wellness programs?
Families USA
2014
Policy Context
1) Health care expenditures are high and
rising
Families USA
2014
Health Spending as a Share of GDP,
Select OECD Countries, 2000-2010
Canada
18
France
Germany
Japan
United States
OECD34
U.S.
% GDP
16
14
12
10
OECD
Avg.
8
6
2000
Families USA
2014
2002
2004
2006
2008
2010
Source: Health at a Glance 2013: OECD Indicators, available online at: http://www.oecd.org/els/health-systems/Health-at-a-Glance2013.pdf.
Policy Context
1) Health care expenditures are high and
rising
2) As a result, premiums continue to grow,
too
Families USA
2014
Premiums for Employer-Based Coverage,
1999-2013
Families USA
2014
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2013.
Policy Context
1) Health care expenditures are high and
rising
2) As a result, premiums continue to grow,
too
3) Employers and other purchasers are
looking for ways to contain the cost of
coverage
Families USA
2014
Value-Based Insurance Design
Two Models:
1) Tiered cost-sharing based on clinical value
2) Tiered cost sharing by quality and
efficiency of provider
Goal: To control costs and improve access to
effective, evidence-based care and
providers
Families USA
2014
Key Elements to Effective VBID
Clinical Evidence &
Performance Metrics
Benefit Design
VBID
Consumer and
Provider Engagement
Families USA
2014
Transparency
VBID: Tiered Cost-Sharing
How it works
– Reduces/waives cost-sharing for services with
evidence of strong clinical benefit relative to cost
– May increase cost-sharing for services that are not
clinically effective
Requirements for consumer-friendly design
Families USA
2014
– Robust, reliable evidence base
– Accessible exceptions and appeals
– Consumer education and the availability of tools
and resources to aid consumers
– Paired with policies that address provider pricing
and behavior
Value-Based Care
High Value Services
Low Value Services
•Age appropriate cancer
screenings
•Early Elective C-Sections
•Eye and foot exams for
diabetics
•Medications for chronic
heart disease, asthma,
diabetes and hypertension
•Transplant drugs
•Defribillators for certain
patients with congestive
heart failure
Families USA
2014
•MRI for low back pain (w/
no red flags)
•Sleep studies
•Annual EKG/cardiac
screening for low risk
patients
•Bone density test for lowrisk women under 65
VBID in Practice: Tiered Cost-Sharing
Pitney Bowes Experience
Design: Reduced/waived co-pays for medications
for heart disease, asthma, diabetes and
hypertension
Results:
• Improved medication adherence for statins and
blood clot inhibitors
• Reduced ER visits by 26% in diabetics
• Slowed rate of cost growth
Families USA
2014
Sources: Choudhry NK, Rosenthal MB and Milstein A. Assessing the evidence for value-based insurance design. Health Affairs. 2010 Nov; 29(11): 1988-94
and Choudhry NK et al. At Pitney Bowes Value-Based Insurance Design Cut Co-payments and Increased Drug Adherence. Health Affairs 2010 Nov.; 29(11):
2028-31.
VBID: Tiered Provider Networks
How it works
– Providers placed into tiers based on performance
data and other factors
– Cost-sharing varied based on tier within which
provider falls
Requirements for consumer-friendly design
Families USA
2014
– Robust, reliable quality metrics and measures of
provider performance
– Sufficient availability of providers to meet the needs
of all plan enrollees
– Consumer education on plan design
– Accessible exceptions and appeals
VBID in Practice: Tiered Provider Networks
Aetna Aexcel Performance Network
Design: Designates doctors and provider
groups in 12 specialties (e.g. cardiology and
orthopedics) as high-performing with a blue
star
Factors considered:
1) Volume
2) Clinical Performance
3) Efficiency
Families USA
2014
Sources: http://www.aetna.com/docfind/pdf/aexcel_understanding.pdf and http://www.aetna.com/insurance-producer/document-library/aexcelmember-brochure.pdf
VBID vs. Wellness Penalties
Value-Based Insurance
Families USA
2014
Wellness Penalties
Evidence Based
Not-Evidence Based
Cost-sharing based on clinical
value
Cost-sharing based on participation
in program or health status
Never alters premiums
Higher premiums for enrollees with
health risks/who cannot participate
Lowers cost-sharing for high
value care for enrollees with
related health risks
Raises cost-sharing for enrollees
with health risks/who cannot
participate
Families USA
2014
Additional Resources
• Principles for Consumer Friendly Value-Based Insurance
Design: http://familiesusa2.org/assets/pdfs/VVBID-Brief.pdf
• Key Difference between Wellness Reward/Penalty
Programs and Value-Based Insurance Design:
http://familiesusa2.org/assets/pdfs/health-systemreform/VBID-Wellness-Programs.pdf
Families USA
2014
Contact Information
Kim Bailey
Kbailey@familiesusa.org
202-628-3030
Familiesusa.org
Families USA
2014