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Role of Value Based Benefit Design in Value Based Purchasing. Andrew Webber, President and CEO National Business Coalition on Health Integrated HealthCare Association Mini-Summit VII February 29, 2008. Mini Summit Objectives. To define value based benefit design

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role of value based benefit design in value based purchasing

Role of Value Based Benefit Design in Value Based Purchasing

Andrew Webber, President and CEO

National Business Coalition on Health

Integrated HealthCare Association

Mini-Summit VII

February 29, 2008

mini summit objectives
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

National Business Coalition on Health (NBCH)
coalitions in different markets
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
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 measure report and reward
Four Pillars:

Standardized Performance Measurement

Public Reporting

Payment Reform

Consumer Activation/Consumer Choice

Must be Driven by Purchasers/Payers.

Creates Impetus for System Transformation

Value Based Purchasing:Measure, Report, and Reward
vbp s aim behavior change
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 consumer choice
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 bites
A Few Sound Bites

Consumer 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
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
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 design15
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
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 vbbd
Examples of VBBD

Choosing 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
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
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
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 table
Health Plan Scoring Table

HMO

A

HMO

B

HMO

C

HMO

D

Raw Score

Flex Score (25)

211

24

221

25

176

16

129

5

eValue8

RFI Results

Raw Score

Flex Score (20)

13

13

7

7

14

14

13

13

HEDIS / CAHPS (CARS evaluation)

Commendable

2

Accredited

1

Excellent

5

Excellent

5

NCQA

Accreditation

Raw Score

Flex Score (5)

14

44

42

30

Total QualityScore (50)

24

23

47

20

13

33

19

12

31

22

14

36

  • National Rate Rankings
  • Relationships of rates to Local Indemnity
  • Total CostScore (50)

Total Quality + Cost (100)

61

77

73

66

Rating

Below Avg

Benchmark

Strong

Good

Sample Employee Contribution

$100

$20

$40

$55

in summary
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 information
Contact information

Andrew Webber, President & Chief Executive Officer

National Business Coalition on Health

1015 18th Street, N.W., Suite 730

Washington, DC 20036

(202) 775-9300

awebber@nbch.org

www.nbch.org

SAVE THE DATE:

NBCH 13th Annual Conference

November 9-11, 2008

JW Marriott Pennsylvania Ave, Washington, DC