The Center for Health Value Innovation on Value Based Design

by Clive Riddle, May 27, 2010

This week, Cyndy Nayer, M.A., President, CEO and co-founder of the Center for Health Value Innovation and Michael S. Jacobs R. Ph., Principal and National Clinical Practice Leader, Buck Consultants, LLC  (also a board member at the Center) spoke in the HealthcareWebSummit event Leveraging Health: Current Impact of Value Based Design.

What’s going on with Value Based Design initiatives right now? Glad you asked. While some other elements of health reform have stolen the spotlight during the past few months, VBD continues to move forward as a key solution to its core stakeholders. 

The Center for Health Value Innovation is an educational organization that serves as an information exchange for value-based designs. The Center’s members include health plans, employers, unions, government, pharmaceutical organizations and other stakeholders that represent over 40 million lives. The Center recently published a new book, Leveraging Health, which shares findings from their recent interviews and surveys that identify more than 100 levers that influence consumer and patient behaviors in Value-Based Design, and15 categorized macro-levers.

Definitions of Value Based Design have evolved over time. The Center has this to say about defining VBD: “It’s important to note that value-based designs (VBD) are much more than waived or reduced co-pays for chronic care, particularly medications.  A value-based design uses evidence-based clinical impact merged with financial impact (Health + Economics) to guide the behaviors of populations in managing their health.  VBD can influence choice of care provider, appropriate and persistent treatment, and early risk/prevention/wellness.  All of these have been documented to show a meaningful impact in health status, productivity (safety, disability, unscheduled absences, and more), quality and financial cost trend.”

Nayer and Jacobs expanded on this definition during their presentation, stating:

• VBD is an engagement tool that engages the employee (consumer) and the employer (plan sponsor) and the provider (clinician)
• VBD focuses on outcomes:  better performance
• VBD is driven by data that drives the suite of performance tuners: levers
• VBD is sustainable and applicable at the small-large employer and at the community level
• VBD builds the Health-Wealth-Performance Portfolio
• VBD uses Data to invest in incentives (Design) and services (Delivery) that change behavior for improved health, quality, performance and financial trend (Dividend.)       

They note that EAP and behavioral health are important components of VBD, given that behavioral change is the key to sustaining value. They further advocate that if value is to be built on outcomes, than purchasing must be aligned. Nayer and Jacobs stat that Outcomes-Based Contracting must align incentives between the contracting parties.

After VBD emerged as a mainstream concept and solution, the Great Recession intervened, and Nayer and Jacobs point out the effect of the economy on health behaviors, placing employee/patient compliance, adherence and persistence at risk.

Here’s some of the Center’s survey results they shared, which are incorporated into their book, Leveraging Health. Over 100 companies responded to their survey, representing over 1 million lives:

87% Use incentives (levers) in prevention and wellness, 60% Use levers for chronic care management, and 26% Use levers for guidance to appropriate care delivery

Given that VBD programs provide various forms of incentives, including applicable waivers of cost sharing, an obvious concern in a down economy would be that employers would feel pressure to pull back in these areas to in the name of achieving short term savings. However the survey indicated 79 % of the employers with VBD in place two or more years made no VBD changes in 2009 and 56% did not plan to make changes in 2010.

Of the 44% who did anticipate changes in 2010: 64% of them plan to pass more of the cost of brand drugs to the employee; 16% plan mandatory enrollment in disease management programs; and 16% plan to pass more of the cost of generic drugs to the employee.

Additional survey results:

• 63 % waive employee cost sharing for yearly screening exam
• 40 % provide insurance premium incentive for completion of a Health Risk Assessment (HRA)
• 54 % cover depression under care management program
• 70 % reduce/waive co-pay for utilizing the lowest cost appropriate site of care (e.g., urgent care, convenient care, onsite services, medical travel)
• 58 % provide incentives for the use of EAP programs
• 35 % provide incentives for financial counseling
• 20% reduced applicable prevention screen cost for age/gender appropriate groups
• 18% provided an insurance premium incentive for completion of a biometric screen
• 13% reduced OOP costs for setting and/or achieving health promotion goals
• 13% provided insurance premium incentive for complying with recommended prevention exam
• 12% adjust their condition-based formulary (all tiers lowered for specified conditions)
• 12% link co-pay/coinsurance waivers to mandatory condition management

Employers also indicated these as their top challenges to deploying their VBD programs (more than one answer allowed):

• 53% - Increasing engagement with employees: slow to use the new benefits
• 45% - Enrolling employees in disease management programs
• 42% - Keeping the momentum going
• 34% - Obtaining and integrating data
• 34% - Lack of communication with physicians/pharmacists/clinicians
• 34% - Communicating benefits with the covered lives
• 32% - Segmenting and interpreting data
• 18% - Communicating success with the covered lives
• 13% - C-Suite support