Back to the Basics of Value-Based Care

It’s gratifying when you see research that proves something we all thought could or should work – in this case, a well-designed study published in Health Affairs that found a tiered network with appropriate incentives delivering about a 5% reduction in plan cost.

With all the discussion around the many different flavors of value-based care, it is easy to forget just how basic that concept can be. Tiered networks are a simple and valuable VBC solution and well worth exploring.  Some key questions to consider:

  • How might this type of network fit with your overall program objectives?
  • How were the tiers determined?  What criteria was used?
  • What incentives are in place to drive migration to the more effective tier?  What tools are available to help plan participants make that choice?
  • How will the tiered network impact access? Is access reasonable?  Are all specialties covered?
  • How do we hold the carrier/vendor accountable for the delivery of a positive result in a tiered network?

For inspiration, read the Health Affairs article.  In a nutshell, the study evaluated the impact of a tiered-network health plan on total health care spending and on inpatient, outpatient, and outpatient radiology spending for enrollees in a commercial health plan from 2008–12.  While study authors say the research “adds to the evidence that tiered-network benefit designs have the potential to deliver higher value and be a tool that employers and other payers can use to decrease spending in the US health care system,” they also caution that “the effects of any tiered network plan will depend on the details of tiering.”  In other words, the devil’s in the details – as always.

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Eric Bassett
by Eric Bassett

Senior Partner, Mercer

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