Value-Based Insurance Design January 10, 2012 Health Care Reform health care reform, value-based insurance design, VBID 0 "Value" is gaining clout in the health care industry. The Patient Protection and Affordable Care Act is set to test whether value-based insurance design (VIBD) can be a viable tool for aligning out-of-pocket costs and the value of medical services. National reform will further encourage value-based insurance design in 2014, when it allows employers to reimburse employees up to 30% of health insurance costs if workers meet health and wellness goals. The current reimbursement rate is 20%. "As we move away from a one-size-fits-all, cost-sharing model to VBID, we are removing barriers to accessing high-value care and at times, creating disincentives to deter care of little value," said A. Mark Fendrick, director of the Center for Value-Based Insurance Design at the University of Michigan. Value-based insurance adjusts out-of-pocket costs based on an assessment of the clinical benefit value—not simply the cost—to a specific patient population. Simply put, value equals the clinical benefit achieved for the money spent. The Pacific Business Group on Health, an employer purchasing coalition based in San Francisco, takes a broader approach to value-based insurance design. Moving beyond just copayment or coinsurance reductions, the model should include shared decision-making, network design, incentive design and disease management, said PBGH Director Emma Hoo. VBID Makes Inroads In California, Blue Shield of California and SeeChange Health are working on value-based plans with options that offer members a chance to put money back in their pockets by engaging in healthy behaviors. Two other California-based entities—CalPERS and Safeway—have introduced "reference pricing," which establishes a standard price for a medication, procedure or service and requires members to pay any charges beyond the price. Blue Shield Develops Three-Tiered Plan Blue Shield of California developed Blue Groove, a three-tiered, value-based program for large employer groups to be piloted in the Sacramento area beginning in 2012. Participants will use the services of Hill Physicians. The three levels—basic, main, and care+ groove—provide a range of health and wellness benefits, opportunities to earn incentives and lower out-of-pocket payments. Participants who achieve healthy parameters can earn up to $500 in cash deposited into a health reimbursement account and/or receive a discount on premiums. They must comply with evidence-based protocols outlined in a customized care plan. Blue Shield anticipates Blue Groove will reduce the premium for employers by 10% to 15% in the first year and significantly improve members' health. Blue Groove builds on the infrastructure of the plan's successful two-year, accountable care organization pilot with the CalPERS. Source: California Healthline, January 9, 2012. Comments are closed.
