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Value-Based Insurance Design Still Under Construction
Value-based insurance design (VBID) might be good for the health care system, but insurers need to be clear on the advantages and disadvantages, argues health care economist Austin Frakt in The New York Times blog the Upshot. “It may be inevitable that health insurance comes with cost-sharing,” writes Frakt. “But there’s no reason it can’t be applied in ways that also help patients do the right thing, nudging them toward high-value care and decreasing incentives to pursue low-value care.”
Health plans deploying VBID offer better coverage for treatments that actually make a difference, and very little coverage for those that don’t. The idea isn’t new, but it’s starting to be applied more.
For instance, the Patient Protection and Affordable Care Act has VBID provisions that eliminates the cost-sharing for more than 100 preventive services, such as cancer screenings and vaccinations. There are also programs in place by large employers and government entities that reduce cost-sharing for treatments aimed at chronic diseases such as diabetes.
This year, the Centers for Medicare and Medicaid Services began a five-year test of value-based design "that permits Medicare Advantage plans in seven states to reduce cost-sharing and enhance benefits for enrollees with designated chronic conditions,” Frakt writes. “Bipartisan legislation has been introduced in the House and Senate to expand the program nationwide.”
The question is: Does VBID actually work? Frakt cites several studies that showed some increase use in medication adherence for people with chronic conditions, but he calls them “modest.” He also talks about VBiD that focused on use of services other than pharmacy.
The programs seem to improve quality of life but don’t necessarily save money. For instance, Blue Cross and Blue Shield of North Carolina "reduced cost-sharing for hypertension, hyperlipidemia, diabetes, and congestive heart failure medications for more than 700,000 policy holders. Their overall health care spending remained comparable to that of similar patients insured by other plans that did not use a value-based design.”
Source: The New York Times; July 10, 2017.