Adherence and VBIDs: Delivering real patient value
*Ursula Sautter investigates how **value-based insurance designs (VBIDs) can improve compliance and help pharma demonstrate real patient value ***
By on Apr 26, 2011Ursula Sautter investigates how value-based insurance designs (VBIDs) can improve compliance and help pharma demonstrate real patient value
Hoping to curb medical spending and promote better health, a small but growing number of industry providers in the US now offer value-based insurance designs (VBID), incentive schemes that provide more extensive coverage for chronic disease-related services that meet evidence-based criteria for high benefit and less extensive coverage for drugs and procedures considered too ineffective relative to cost.
Under a VBID, when you go to fill the latest prescription for your chronic conditionasthma, say, or diabetesyou pay nothing or only a small sum out of pocket.
Instead, your employer picks up the tab. Ditto for regular medical check-ups, vaccinations, and cancer screenings.
Thats the good news. The less good news is when, like over 26 million Americans do every year, you have an MRI scan, a hefty co-payment will be required.
Ditto for knee surgery and other expensive procedures and drugs considered optional, less effective, or overused.
As health costs continue to rise, more employers are recognizing the value of tailoring benefits to the health risks of their employee populations, says Andrew Webber, president and CEO of the Washington-based National Business Coalition on Health, five of whose members were chosen last year to take part in the American Health Strategy Project, a pilot program to assist employers in implementing VBIDs.
Launched in cooperation with Pfizer Inc., the program helps employers identify benefit design strategies that offer high-value care and promote employee health.
Combined with value-based pricing (VBP), VBIDs have the potential to help pharma prove value to payers by showing how their products can improve compliance, aid prevention, and manage long-term healthcare costs.
(For more on VBP, see Is value-based pricing an aid to market access? and Market Access and value-based pricing.)
The Asheville experiment
The city of Asheville, North Carolina pioneered VBIDs back in 1996 when it began to provide training and personal oversight for employees with chronic disorders, such as hypertension and high cholesterol, through the local Mission-St. Josephs Diabetes and Health Education Center.
Patients included in the project were also teamed with community pharmacists who made sure they were using medications correctly.
(For more on the role of pharmacists, see The pharmacist's role in patient adherence, The pharmacist as an ally in patient adherence, and How pharmacists can help improve patient compliance.)
Asheville wanted to tackle the large co-payments that led many people to underuse essential therapiesdiabetes drugs, in this case.
Poor adherence can allow conditions to worsen, thus necessitating even more expensive treatments further down the line.
If co-payments could be reduced or eliminated, this reluctance would become less frequent and compliance would improve.
That, according to Cyndy Nayer, president of the Center for Health Value Innovation, is exactly what employers should have a vested interest in: accentuating the behavior they need to improve productivity.
And thats what happened in Asheville. The VBID program led to better compliance, which in turn led to better health outcomes for employees, retirees as well as their dependents with diabetes.
Roughly 100 employers, including city governments and school districts, now offer VBID programs, estimates former Asheville director of risk management John Miall, who was instrumental in launching the scheme and is now an independent consultant.
Research confirms that co-payment reductions can lead to better use of essential therapies and prevention; not bad considering non-compliance costs are estimated at $100 billion a year.
In Oregon, for example, state workers received free tobacco cessation counseling as part of a VBID program; the number who smoked decreased from 13 percent in 2005 to 10 percent in 2010.
Some 10 percent of state employees also began to take part in free weight management meetings.
Savings versus expenditures
But can VBIDs really help employers save money?
Some critics maintain that the additional use of prescription medication encouraged by the schemes to prevent conditions from becoming worse can, at least in the short term, lead to a rise in health expenditures.
A 2010 study co-authored by A. Mark Fendrick, a professor in the Division of General Medicine at the University of Michigan, suggests this might be true.
But, says Fendrick, the effect can be offset by a reduced use of non-drug healthcare services, meaning that total system-wide medical spending does not increase.
A report examining the financial consequences of a pharmacist-focused collaborative care treatment for 48 Asheville employees suffering from depression bears this out.
Although the annual employer expenses for prescription medications under the program increased by 21 percent compared to projections, medical expenseswhich, in the baseline year, represented 60 percent of the insurers total healthcare costsdeclined.
The employers mean total healthcare cost per patient per year increased from $7,935 at baseline to $8,040 a year later, but this was less than the projection of $9,023.
This represents an 11% decline from projected values, or a total savings of $41,881 per year.
A reduction in the frequency and length of sick leave also needs to be factored into the equation.
According to 2001 follow-up evaluations conducted in Asheville, employees in the diabetes program called in sick on just six days instead of the previous figure of twelve days.
Cut costs, not quality
To ensure that these positive outcomes continue, the Fendrick team recommends VBIDs be carefully detailed, especially the extent to which co-payment changes are clinically targeted.
If this is done wisely, VBID programs have great potential to cut costs without cutting quality, says Margaret OKane, president of the National Committee for Quality Assurance.
We are at a crisis point in the US. This is the now-or-never moment to contain healthcare spending. And we either have to make such schemes work or keep eroding what people get even further by rising deductibles more and more.
Work also needs to be done to allay consumer fears about VBIDs.
People are concerned about exceptions, says marketing research consultant Carol Foley, who analyzed acceptance of VBID programs in Oregon.
These are situations when a particular treatment or drug is right for their circumstances even if it is considered low value.
In Oregon, VBID members are charged an extra $500 for such preference-sensitive services as shoulder arthroscopy and upper endoscopy exams and an extra $100 for more sophisticated imaging scans and sleep studies.
A value-equation is always a slippery thing, says Miall, so he thinks it should always include individual human concerns and not just financial ones.
Foley also found a perception that a VBID could penalize healthy consumers, both by giving them higher out?of?pocket costs and by charging them a premium that covers very comprehensive services for the chronically ill.
The belief is that people who are basically healthy are more likely to need the services that require higher cost?sharing, she explains.
Part of the reasoning stems from the perception that many of the chronic conditions targeted by VBIDs are the result of poor lifestyle choices: overeating, lack of exercise, smokingthings that healthy people should not have to subsidize.
A couple of things can and must be done to change such views, Foley believes.
For one, extensive education campaigns would help convey the advantages of the model.
VBID structures also have to be easy for the member to understand and the employer to explain, Foley says.
A tiered VBID systemone that leads with generics but allows patients to keep or upgrade to more expensive brand drugs if these prove more effectiveis also advisable, according to Nayer: Dont mess with tried and tested regimens, especially if the patient is performing well in the workforce.
Whats in it for pharma?
Pharmas interest in the long term is to focus less on a product than on the value of those drugs that can mitigate, reduce, or eliminate serious costly conditions, says Miall.
So instead of just leaving the field to insurers, he believes pharma companies could create their own health insurance syndicates, drawing on their inside knowledge of what drugs are most valuable to patients.
If diabetes patient is destined to have a kidney transplant, for example, the time value of delaying that operation for even 10 years is tremendous.
That is done, of course, by making sure patients are adherent, providing very intensive care management, and removing barriersa recipe for improved outcomes.
We created a patient-centric model at Asheville, Miall says.
Doctors saw their patients more frequently and health plans saved money. The local hospital system saw admissions way down, but the hospital adapted. They hired more educators, sold more lab services, and even got their clinical pharmacist credentialed to see patients. (For more on patient-centricity, see Adherence and the empowered patient.)
There may be more opportunities to put these kinds of innovative strategies into practice.
According to the Mercer National Survey of Employer-Sponsored Health Plans, 81 percent of large employers plan to offer VBIDs in the near future.
For more on VBIDs, join the sectors key players at Patient Adherence, Communication & Engagement Europe on May 31-June 1 in Berlin.
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