Leveraging Health: Valuable Outcomes Drive Proficiency and Expediency

The American Journal of Pharmacy Benefits, Winter 2009, Volume 1, Issue 4

Ms Nayer discusses the success of value-based insurance design in improving health and productivity, and lowering healthcare costs in a sustained, predictable way.

Today is a red-letter day: the Health Plan Bill has finally made it out of the Senate Finance Committee. This commentary is not about the possibilities or the consequences of the next round of debates, nor when a possible healthcare reform policy can be expected. This commentary is about the success and maturation of the value-based design marketplace.

We have been tracking the adoption of value-based designs for almost 5 years; the original surveys were built on my experiences of tracking innovation at the intersection of employers and health plans for the past 20 years. Through a simple 12-question screening tool, we tracked early adopters, fast followers, and experts as the expansion of value-based design grew past our ability to quantify the size of the marketplace. Phone-based interviews with more than 80 companies and online surveys of more than 150 companies resulted in a graphed description that we named the Health Value Continuum. The continuum has grown, too, and it now reflects a broader set of 100+ levers that drive prevention/wellness, chronic care management, and care delivery choices throughout the nation for improved value of every healthcare dollar spent. The improvement is manifest in better health, higher productivity, quality outcomes, and predictable, sustainable, reduced health cost trends.

The early continuum was built on the scores of interviews across 4 dimensions: data (could the company analyze more than medical, laboratory, and prescription claims?), design (what conditions, including prevention and wellness as precursors to better health, were they managing through disease or lifestyle management programs?), delivery (what suites of services, communication, and, later, technology were they using?), and dividends (what were the results of their efforts? What was the C-suite involvement in the efforts, and had there been a shift to a more accountable culture of health?). The original Health Value Continuum is depicted in the

Figure

, with some new nomenclature for the 3 distinct levels of sophistication that began to emerge: entrant, fast follower, and expert.

The focus of entry-level value-based designs is on the waste reduction necessary for continuation of the investments. We now know that the first entry point to successful value-based design is a philosophical shift to investing in the health of the workforce; invariably, all value-based designs start by removing access barriers to preventive and wellness care. Without the annual exams, labs, and other biometric screens, coupled with healthcare cost trends, the plan sponsor does not know where the waste lies—therefore, any savings in the initial plan is quickly chewed up by unanticipated costs from folks who are either not in the system at all or who are noncompliant with their treatment regimens. We call this first level “Engagement,” and no company who skips this level has been able to sustain their value-based design over 2 years.

The focus of the next level is “Adherence,” which accentuates the focus on the reduction of multiple conditions associated with chronic disease. The goal of these fast followers is to moderate future risk. Once they achieve a level of predictability, they move quickly to reduce the predicted trend with value-based interventions and measure the impact; they also expand their efforts to include nonadherent groups. The links from the provider community (through improved quality) to the consumer-patient grow bolder, and there are inklings of shared risks and rewards to all who participate.

The focus for the third level is “Performance.” At this level, sophisticated technology supports and incentivizes individual competency for managing one’s health, wealth, and performance. The plan sponsor creates precision-focused benefits for each population segment and level of adherence, thereby increasing the value of the investment in each portion of the population.

What are some of the key take-away points from our work to date?

1. Prevention and wellness are fundamental. Companies have tried to emulate the Asheville or Pitney models, or others, by jumping in with copayment reductions for diabetes. These have not succeeded over the long term; the culture of the company has to, at the very least, expect health management to be a shared responsibility created on the basis of prevention and wellness—in reality, a risk management model.

2. Each company defines its set of criteria for incentives, disincentives, and insurance plan offerings that will support the shared responsibilities. There are similarities in deployment, but the communications, the C-Suite involvement, and the willingness to spread the innovation in the community depend on the unique qualities of the company and the culture of risk management and performance superiority.

3. The real reduction in variance, reduction in health cost trend, and predictability across business channels occur at the far right of the continuum—where the individual’s focus on health-wealth-performance aligns with the company’s strategic goals. This does not mean that the individual becomes a product of the company. Rather, the incentives are aligned to support learning, sharing, influencing, and promoting a culture of health and value, and the assets that are created are portable for the employee. The investment creates a true Culture of Health (in capital letters) that drives excellence, innovation, and results. I often hear the designers say, “We did this because it was the right thing to do, and it produced the results we wanted.”

As companies take these steps, the competency to drive value begins to permeate the strategy across business channels of the company. Companies we have tracked through the economic downturn continue to promote health management and financial management in one breath. They may have had to downsize, but they are committed to the health of the workforce and the communities in which they live. Even if employees leave, they leave with health management capabilities that will serve them well in the next job and the next.

So we have seen a movement that philosophically shifts to investments. It begins with cost-focused waste reduction, morphs into future risk moderation, and builds competency to a health-wealth-performance culture. In effect, the companies are moving from a reactive to a proactive stance, and they are sharpening their acuity from one-size-fits-all population health designs to small group and individual designs that marry meaningful rewards to desired health behavior change. It’s important to note that comprehensive behavior change strategies are wrapped into the designs around the middle of the continuum, and they often take precedence as the company moves to the far right of the graph. Total health management—an investment strategy that also promotes independence, health improvement, and personal accountability—is manifest in the coordination of services and rewards that are simultaneously meaningful to the individual and the company.

And shouldn’t that be the goal of healthcare—to promote the improvement of our communities so that the workforce becomes healthier, our families become healthier, and our economies become healthier? At that point, we are truly promoting value, and the real dividends of value-based design are unarguable.