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Role of Value Based Benefit Design in Value Based Purchasing
Andrew Webber, President and CEONational Business Coalition on Health
Integrated HealthCare AssociationMini-Summit VIIFebruary 29, 2008
Mini Summit Objectives To define value based benefit design To better understand the role of value
based benefit design as a key component of value based purchasing
To present philosophy behind and pioneering examples of value based benefit design
National Business Coalition on Health (NBCH)
Membership of 60 business and health coalitions National network of
thousands of employers and 25 million employees and their dependents
Mission: Health and health care reform, through value based purchasing, community by community
Coalitions in Different Markets Pacific Business Group on Health New York Business Group on Health Buyers Health Care Action Group Midwest Business Group on Health Florida Health Care Coalition Greater Detroit Area Health Council Puget Sound Health Alliance
NBCH at Work Best Practice Distribution Network:
- eValue8 – Common RFI for health plans- Leapfrog Survey, Bridges to Excellence,
Asheville Model- College for Advanced Management of
Health Benefits National Advocacy:
- Congress, CMS, CDC, AHRQ, NQF, QASC, HQA, AQA, NCQA
Value Based Purchasing
Value Based Purchasing:Measure, Report, and RewardFour Pillars: 1. Standardized Performance Measurement2. Public Reporting3. Payment Reform4. Consumer Activation/Consumer Choice
Must be Driven by Purchasers/Payers. Creates Impetus for System Transformation
VBP’s Aim: Behavior Change Principally at provider and consumer level Payment Reform: changing provider (i.e.
supply side) behavior through reimbursement incentives – primary focus of this conference
Consumer activation: changing consumer (i.e. demand side) behavior through mix of support mechanisms including use of incentives – focus of this Mini-Summit
Consumer Activation and the Role of Value Based Benefit Design
Consumer Activation/Consumer Choice The Goal: To influence the individual consumer to
make informed choices at many levels: to live a healthy lifestyle; to seek preventive services and care when sick; to share in, and make the right, treatment decisions; to comply with treatment regimen and self-manage,
particularly chronic disease; to select a plan, hospital, physician.
A Few Sound BitesConsumer Activation/Consumer Choice: Area of greatest influence for employers; Change the entitlement mentality; Focus on front end health not just health care; Establish a principle of self-responsibility but with
robust support; Support strategy includes creative mix of economic
incentives, peer support, timely information, coaching/counseling
Consumer Activation Strategies: The Beat Goes On and On and On: The Healthy Corporation Worksite Wellness, the Healthy Cafeteria Onsite Clinics Disease Management and Employee
Assistance Programs Internet Education and PHRs and Value Based Benefit Design
What is Value Based Benefit Design?An NBCH Working Definition:
“The use of incentives, through the design of employee benefits, to encourage consumers to choose healthy behaviors, to seek high value health services, and to select high
performance plans and providers.”
What is Value Based Benefit Design?Some Underlying Principles: Individuals have a critical role to play in producing
good health outcomes; Individual cost sharing is both inevitable and needed
in eliminating the consumer entitlement mentality. But blunt cost shifting can be counterproductive;
Incentives influence consumer behavior and should be aligned with outcomes we want to achieve;
Consumer incentives should be aligned with economic incentives for providers and other suppliers of health and health care services.
VBBD Applied to Health Insurance Basic health insurance benefit architecture should
tier medical services by evidence of effectiveness - and providers by evidence of performance
Co-pay levels should vary by tiers in a way to steer individuals toward effective services and high performing providers. And vice versa.
Economic incentives, through value based benefit designs, can influence better consumer choices but should be joined with timely information, coaching, and peer support
Examples of VBBDChoosing Healthy Lifestyles: Destiny Health – Vitality Awards Program
- Accumulate points for wellness activities/outcomes redeemed for gifts/trips United HealthCare – Health Promotion Plan
- Meet certain health maintenance goals, monthly insurance premium lowered
VBBD Example: Seeking High Value Medical Services HealthMapRx (aka The Asheville Model): Reinvention of community pharmacy through consumer
coaching/counseling With waiving of copays for high value medications for
certain chronic illnesses Led by American Pharmacists Association Foundation Supported by NBCH through national distribution
agreement
Asheville Program Results Over 1500 patients from 10 employers enrolled for
diabetes, asthma, hypertension, lipid therapy management, and depression
Patients realize improved outcomes & increased medication adherence
50% reduction in sick days Zero workers comp claims in the City diabetes group
over 6 years Average net savings of $1,600-$3,200 per person
with diabetes each year from year 2 on Employers saved over $5,000,000 in health care
costs
VBBD Example: Choosing High Value Health Plan General Motors Health Plan Steerage Program: Measurement of Health Plan performance Using eValue8, NCQA, and comparative cost data
plans Measures total plan contribution to quality and cost
management Results used to steer employees to high performance
plans through premium share differentials
Health Plan Scoring TableHMO A
HMO B
HMO C
HMO D
eValue8RFI Results
Raw ScoreFlex Score (25)
HEDIS / CAHPS (CARS evaluation)
Raw ScoreFlex Score (20)
NCQA Accreditation
Raw ScoreFlex Score (5)
National Rate Rankings
Relationships of rates to Local Indemnity
Total Cost Score (50)
Total Quality + Cost (100)
1295
221 25
211 24
77
1414
13 13
Commendable2
Total Quality Score (50)
Below Avg
Benchmark
14 44 42
2423
47
2013
33
1912
31
61 77 73
Strong GoodRating
Sample Employee Contribution
176 16
1313
Accredited1
30
2214
36
66
$100
$20 $40 $55
Excellent5
Excellent5
In Summary Value Based Benefit Design (VBBD) is a key
element of Value Based Purchasing focused on influencing consumer behavior
VBBD is defined (by NBCH) as the use of consumer incentives, through employee benefit design, to influence choice of healthy behaviors, high value medical services, and high performance providers.
To be optimally effective, VBBD should be joined by other consumer support mechanisms.
Contact informationAndrew Webber, President & Chief Executive OfficerNational Business Coalition on Health1015 18th Street, N.W., Suite 730Washington, DC 20036(202) 775-9300 [email protected]
SAVE THE DATE:NBCH 13th Annual ConferenceNovember 9-11, 2008JW Marriott Pennsylvania Ave, Washington, DC