The name of the game these days is value.
Nowhere is that more evident than in the insurance industry, where health plans are struggling to determine their value in the midst of healthcare reform.
At the recent America's Health Insurance Plans Institute 2010, and again at the Healthcare Finance Management Association's ANI conference two weeks later, health insurers and health plans were urged to adopt value-based benefits.
"Healthcare payers today have an opportunity to align value-based provider reimbursement models and member incentives to drive behavior and impact the volume of care – not just the unit cost of care," noted Jeff Rideout, senior vice president of care and cost management and chief medical officer for the Newport Beach, Calif.-based TriZetto Group, during a panel discussion at AHIP. "The key, though, is to design processes, incentives and technology solutions that are dynamic – that adjust to the workflows of clinicians' practices and to the wide-ranging responses of consumers."
The idea behind value-based insurance design is to reward both patients and providers for adherence to evidence-based healthcare practices. Insurers adjust both out-of-pocket costs for patients and reimbursements to providers based on the clinical benefits of each test, treatment or visit to the doctor's office. In other words, more valuable treatments would cost less to the patient and return more value to the provider, while riskier or less effective (read: more wasteful) treatments would cost more and be reimbursed for less.
"Today's archaic 'one-size-fits-all' model of member benefits and provider reimbursement fails to acknowledge the differences in clinical value among medical interventions and among individual patients," said A. Mark Fendrick, MD, co-director of the Center for Value-Based Design at the University of Michigan School of Public Health.
According to a recent study commissioned by the TriZetto Group, value-based insurance design is gaining popularity across all segments of the healthcare continuum. Eighty-three percent of the doctors surveyed said value-based benefits would have a positive impact on the selection of effective healthcare treatments, while 74 percent of insurance executives said they would reduce overall healthcare costs.
Almost 90 percent of business executives surveyed would switch to an insurance company that offered value-based benefits, while 86 percent of consumers surveyed said they would be encouraged to live healthier, more productive lifestyles.
Those results were similar to an April survey conducted by Buck Consultants for the St. Louis-based Center for Health Value Innovation. "Value-Based Design 2009," based on a study of 100 employers in 16 major industries, covering more than 1 million employees, indicated that 79 percent of those companies using value-based design in their health program for employees made no changes to the program in 2009 despite the sour economy, while more than half anticipated no changes in benefits for 2010.
"The survey responses prove that organizations using VBD understand the vital importance of this approach. Despite the recession – when employers more likely to cut expenses by changing their benefits – few of the organizations using VBD changed their benefits structure," said Michael Jacobs, a principal for Buck Consultants and members of the center's board of directors.
Cyndy Nayer, the center's founder, president and CEO, says value-based benefit design will gain traction as employers realize the benefits of having a healthy workforce – and as they realize they can influence that workforce to live healthier lifestyles.
"The ultimate goal should not be healthcare," she said. "It should be health."
Nayer said value-based benefits should be used as an engagement tool, to bring everyone's attention to being healthy, helping those at risk to avoid risky lifestyles and helping those with chronic diseases to manage their lifestyles.