Value-Based Insurance Design and Chronic Conditions
You can throw up roadblocks that discourage employees and dependents from coping with chronic conditions before they turn into major expenses and save a few dollars in the short term.
Or you can take down the barriers to smooth employees’ route to better health and save significant amounts over time.
A Value-Based Insurance Design Approach
Value-Based Insurance Design (VBID) helps employers with self-funded health benefits eliminate barriers. A VBID review of an employer’s health plan typically reveals ways to refine the plan for long-term savings to get more health for the money.
For example, VBID experts often advise self-funded employers to spend a little more when the employee is in the early stages of a chronic disease to encourage the employee to seek appropriate care. Over time, that is likely to help slow the disease’s progression, which can significantly reduce the long-term cost to the employer’s health plan.
The Alliance is currently engaged in a VBID pilot with four participating employers. The Alliance’s pilot partner is VBID Health, which develops innovative health plan designs that balance cost and quality.
VBID experts reviewed health benefit plans and data from each employer to:
- Identify diseases or conditions that are likely to lead to high expenditures in the future based on predictive models of spending.
- Identify barriers to care for people with targeted chronic conditions. In most cases, that means modifying the employer’s health benefit plan.
Specific steps recommended to an employer will vary based on their workforce and their insurance plan. For example:
- An employer with an onsite clinic might look for ways to get employees with chronic conditions to regularly visit the onsite clinic for routine care.
- An employer with a health plan that has a high deductible and co-insurance for diagnostic testing might be encouraged to waive or significantly decrease the employee’s out-of-pocket costs when tests are performed to monitor chronic conditions such as diabetes, high blood pressure and heart disease.
- An employer with a workforce that includes a significant number of workers with diabetes might be encouraged to eliminate or reduce out-of-pocket expenses for medications and routine visits as well as for consulting specialists such as ophthalmologists, podiatrists, cardiologists or endocrinologists.
- There are also some steps that apply to all employers based on potential savings. For example, all employers might want to provide a higher level of benefits for outpatient care – such as outpatient surgery or imaging – provided at an outpatient facility instead of a hospital.
- All employers might also want to offer free prenatal care, since employees tempted to save money by foregoing this care could end up with a newborn in a neonatal intensive care unit at a six-figure cost.
More than Screening
Many employers believe offering a health risk appraisal (HRA) is enough to identify risks and put employees on the path to better health. Yet HRAs often fall short when it comes to helping employees learn to successfully manage chronic conditions.
For the best results, employers must examine their workforce and their benefit plan to find ways to persuade employees and their family members to get the care they need. That’s a balance of cost and quality likely to benefit the employer and employee alike.