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Putting Value Into Practice

A. Mark Fendrick, MD; and Jonas de Souza, MD
Insights Into Value-Based Insurance Design in Oncology
The University of Michigan (U-M) Center for Value-Based Insurance Design (V-BID) has been gaining momentum since its 2005 launch, guiding efforts to support the development, implementation, and evaluation of innovative health benefit designs balancing cost and quality. Since that time, numerous private and public employers, unions, and business coalitions nationwide have implemented value-based insurance design approaches. V-BID has been recognized as an important public policy measure for balancing costs and quality in healthcare at the local, state, and federal level. V-BID was incorporated into federal health reform law—Section 2713 (c) of the Patient Protection and Affordable Care Act, which passed in 2010.


The foundation of value-based insurance design is rooted in removing barriers to essential, high-value health services. V-BID programs improve health outcomes at any level of healthcare expenditure. Studies show that when barriers are reduced, significant increases in patient compliance with recommended treatments and potential cost savings result.


In the following interview, A. Mark Fendrick, MD, one of 3 co-founders of the U-M Center for Value-Based Insurance Design (www.vbidcenter.org), discusses V-BID and its value in oncology, along with Jonas de Souza, MD, instructor of medicine, Section of Hematology/Oncology at the University of Chicago Medical Center.


What is V-BID?

AMF: The basic V-BID premise is to align patients’ out-of-pocket costs, such as co-payments and premiums, with the value of health services. This approach to designing benefit plans recognizes that different health services have different levels of value. By reducing barriers to high-value treatments (through lower costs to patients) and discouraging low-value treatments (through higher costs to patients), these plans can achieve improved health outcomes at any level of health care expenditure.


JDS: In oncology, V-BID would further consist of a reimbursement model that promotes evidence-based medicine. At the same level of health care expenditure, it would promote a higher utilization of interventions with higher efficacy and/or with a higher level of evidence, as shown in clinical trials, at a cost of a lower utilization of interventions with marginal benefits and those that are not supported by evidence.


How would you define value in oncology?

JDS: In general terms, value is the right therapy to the right patient at the right time, at the right cost. In other words, value has several domains, which include: a) the safety of the intervention, where toxicities should be kept to a minimum; b) efficacy and effectiveness, where interventions with incremental proven benefits, as shown in clinical trials, should be considered of value; c) out-of-pocket cost to the patient and costs to society, where an intervention that is safe and has efficacy should not place a cancer patient under a financial strain. There have been several discussions among stakeholders about the definition of value, but as ground rules, the wrong value is when the intervention provides no incremental survival or quality of life benefit; when the intervention has an unacceptable toxicity profile; or when a life-saving or prolonging intervention is out of reach to a particular patient for financial reasons.


AMF: In addition, there is lots of evidence that suggests that patients do not always use high-value, potentially lifesaving oncology services, even when they face no financial barrier. However, it is also well established that when patient barriers are reduced—such as in a V-BID plan—utilization of these services will increase significantly.


What would be examples of how V -BID can be applied in practice?

AMF: If any intervention were to be demonstrated to enhance clinical outcome (our primary goal) or constrain healthcare expenditures, it would be included in a value-based approach. V-BID programs outside of cancer have rapidly expanded beyond drugs, to include screenings, diagnostic tests, and specific clinician groups and delivery systems. Certain V-BID programs encourage patients to receive care at cancer centers of excellence, because of their superior quality, not because they cost less.


JDS: In practice, a system where a screening colonoscopy in a 30-year-old man with a genetic syndrome predisposing to colorectal cancer, such as hereditary nonpolyposis colorectal cancer, should be done at virtually no cost to the patient. On the other hand, the same procedure, performed electively in another 30-year-old man with no predisposing risk factors, should have a higher copayment. Or, in the therapeutic realm, if intervention X provides a median survival benefit of 4 months in metastatic colorectal cancer, it should be valued more and have its copayment lowered and access improved to patients, when compared with the same intervention providing 2 months of incremental survival in metastatic non– small cell lung cancer.


Under the V -BID model, what are some recommended high-value alternatives for managing end-stage cancer?

AMF: The sooner we move to a more “clinically nuanced,” efficient and effective cancer delivery system, the better off all stakeholders will be. That is why we feel that patient out-of-pocket costs should not be exclusively based on the cost of a service, but instead be tied to the amount of clinical benefit for the money spent.


JDS: An easily overlooked and undervalued intervention in managing patients with advanced malignancies, when usually all therapeutic interventions have failed, is early introduction to palliative care services. They have been shown to improve survival and quality of life in this group of patients but still are undervalued when compared with more commonly prescribed, and usually off-evidence, therapeutic approaches. Patients should have access to these interventions facilitated.


Is there any movement from the stakeholders toward better aligning the value of oncologic interventions with patients’ out-of-pocket costs?

AMF: The most important step forward is the regulations in the Affordable Care Act [Section 2713] supporting evidencebased cancer screenings being provided to all Americans without any cost sharing. Preventing cancer is their first focus; it is our hope that future endeavors will address treatment as well.


JDS: V-BID does not focus only on specific interventions. The recent trend in oncology toward clinical pathways is a similar model. In this system, payers promote interventions, usually therapies, which are shown to have improved outcomes at reduced costs, by giving financial incentives to providers and/or groups of practices to prescribe them. V-BID would also encourage the greater utilization of these services by facilitating access and/or providing incentives to patients to use these high-value interventions.

Author Affiliations: From University of Michigan Medical Center (MF), University of Chicago (JDS).

Funding Source: None

Author Disclosures: The authors (AMF, JDS) report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.
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