Seeking More Bang for the Healthcare Buck

While everyone can agree that higher-value healthcare is a good thing, how to achieve it is another matter. This was a clear theme at a policy summit at the US Capitol I attended last month that explored “improving the patient experience through value-based insurance design (V-BID).” Here are my key takeaways for employers.

In many policy discussions related to controlling healthcare costs, there are winners (payers) and losers (providers). This makes it challenging to reach consensus on proposals. However, there are areas where both payers and providers should agree. For example, it is estimated that $345 billion is spent annually on low-value or harmful care in the US. If we could redirect the dollars spent on low-value care to high-value care, payers would be purchasing higher-value care and securing better outcomes for patients at the same cost to providers. Therefore, both payers and providers should be aligned on proposals that look for ways to limit low-value or harmful care while simultaneously increasing high-value care.

What services are considered low value? Check out the American Board of Internal Medicine Foundation’s Choosing Wisely website. Its mission is “to promote conversations between clinicians and patients by helping patients choose care that is supported by evidence, not duplicative of other tests or procedures already received, free from harm, and truly necessary”

Here’s an example of how avoiding low-value care can result in real savings. One of the recommendations on the site comes from the American Society of Clinical Pathology and relates to the inappropriateness of performing population-screening for vitamin D deficiency. During the summit, Dr. John Keats, a medical director at Cigna, shared that Cigna was able to reduce screenings by 32% for a savings of $25M across Cigna’s book of business.

According to Dr. Mark Fendrick from the University of Michigan Center for Value-Based Insurance Design, the idea is to design plans that use a “cost sharing approach that encourages consumers to use more high-value services and providers, but discourages the use of low-value ones.” There are currently 14 Medicare Advantage plans that are participating in a model sponsored by CMS to test the V-BID concept. This may serve as an important test case for employers looking to apply V-BID more broadly in their own plans. We’ll be watching -- and reporting back.

Moshe Radinsky
by Moshe Radinsky

Chief Actuary for Mercer Marketplace 365

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