Providing better health care value through new benefit designs
Sara Burnett, CMS contributing writer
In recent years, Grand Junction has earned accolades for its high quality, cost efficient care from everyone from the president of the United States to the country’s top policy wonks. But even this national model of efficiency hasn’t been immune to the soaring health care costs and higher premiums seen across the country – and patients and their employers have been taking notice.
“Our patients are saying ‘What gives? Our premiums are still going up way too fast,’” said Mike Pramenko, MD, the immediate past president of the Colorado Medical Society and executive director of Primary Care Partners in Grand Junction.
That reality has prompted physicians in Grand Junction as well as other parts of
Colorado and the nation to try an approach known as value-based benefit design, or engaged benefit design.
The approach is based on a few key premises:
- The fee-for-service payment model has pushed health care into its current system of “do more, get paid more” – and has been a driver of costlier types of care, such as hospitalizations and procedures.
- Comparative effectiveness research – determining how effective one approach is compared with another – should be used to determine the value of a particular drug, medical treatment or procedure. If two approaches are the same, but one costs more, the patient should be able to choose that option – if he or she is willing to pay extra for it. Otherwise, the health plan should pay for the less costly of the two options. “Let’s stop paying for things that don’t show value,” Pramenko said. “Until we get there we’re not going to contain costs.”
- Shared decision-making – in which patients have conversations with their physician about their options, and are provided materials to help them make an informed decision – should be encouraged.
- Studies by both policy experts and private insurance companies have shown that focusing on population health, such as chronic disease management, wellness and prevention – especially for “high utilizers” who frequently use emergency rooms or who have complex medical conditions – can significantly bend the cost curve.
Critics of this system have called it rationing. Pramenko says that’s not the case, since patients are still able to get the more expensive option if they choose to pay more for it. It’s not unlike the system that has long existed in which some health plans will cover generic drugs but not the brand-name version if the two drugs have been shown to be equally effective, he said.
In January, Engaged Benefit Design was implemented for about 725 employees and dependents of the San Luis Valley Regional Medical Center in Alamosa, through a plan administered by San Luis Valley HMO. EBD was created by Engaged Public, which is supported through both public and philanthropic funding to test and study whether the approach leads to better outcomes and/or lower costs.
A team of physicians and other health care professionals helped develop EBD. It provides patients with options of treatments that are supported by strong scientific evidence (which are on the “No Co-Pay, High Value,” list), and those that fall under the “Costs More, Learn More” category. Treatments on the “No Co-Pay, High Value” list are available at no additional cost to the patient. If a patient is considering a “Costs More, Learn More” option, he or she is given educational materials to help decide if paying the additional out-of-pocket cost is right for them. By charging no co-pay for items on the first list – such as prenatal care and immunizations – the group hopes to encourage wellness.
David Downs, MD, a former CMS president who is medical director of Engaged Public, said the EBD has been generally well received so far. As of July, 54 decision aids had been provided.
“I think most employees think it’s a good idea,” Downs said, “and I think there’s good reason to think it will save money.” Other employers in Colorado that have implemented similar systems include the city of Colorado Springs, Colorado Springs Utilities and Marriott International, according to the Center for Value-Based Insurance Design at the University of Michigan.
In Grand Junction, Primary Care Partners is working with Hilltop, a local nonprofit community resources/health care organization, to design a benefits system that would reduce costs and improve the health of its approximately 500 employees. The agreement came to be after Hilltop’s CEO approached Primary Care Partners about his organization’s rising health care expenditures.
“Most business executives have just thrown up their arms and said, ‘Costs are up and I can’t control it, so I’ll just ask for higher deductibles, and that’s how we’re going to deal with it,’” Pramenko said. “Now we’re seeing employers figuring out where health care dollars are going, and they’re asking the system to change.”
Under the agreement, Hilltop will pay Primary Care Partners a per-patient, per-month fee to coordinate a wellness program and serve as the employees’ patient-centered medical home. Primary Care Partners will provide expanded hours, to try to reduce visits to emergency rooms, and a secure patient portal that patients may use to e-mail questions to their health care provider – thereby helping to cut down on the number of unnecessary visits to see their physician.
Because Hilltop is self-funded they also may provide incentives. If a patient does a wellness visit, for example, or meets a weight loss goal or quits smoking, he or she earns points. If they earn enough they can reduce their premium per month by $30.
In the second year of the agreement, they will move more toward a value-based benefit system, in which they will look at utilization rates and analyze what patients are getting, Pramenko said. When there are different treatment modalities, patients will be asked to pay more for equivalent items that cost more.
Pramenko said several area employers are keeping an eye on the program to see how it works. And that employer engagement, he added, is critical.
“Once employers understand where value is in health care, and once you get employers invested in change, then you really truly can change the system.”
Posted in: Colorado Medicine | Practice Evolution | Payment Reform | Interacting With Payers