Role of Value Based Benefit Design in Value Based Purchasing Andrew Webber, President and CEO National Business Coalition on Health Integrated HealthCare.

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