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The American Journal of Managed Care January 2016
Does Distance Modify the Effect of Self-Testing in Oral Anticoagulation?
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Care Pathways in US Healthcare Settings: Current Successes and Limitations, and Future Challenges
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The Introduction of Generic Risperidone in Medicare Part D
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Effects of Continuity of Care on Emergency Department Utilization in Children With Asthma
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Outcomes Trends for Acute Myocardial Infarction, Congestive Heart Failure, and Pneumonia, 2005-2009
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Factors Related to Continuing Care and Interruption of P4P Program Participation in Patients With Diabetes
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Value-Based Insurance Designs in the Treatment of Mental Health Disorders
Alesia Ferguson, PhD; Christopher Yates, BA; and J. Mick Tilford, PhD

Value-Based Insurance Designs in the Treatment of Mental Health Disorders

Alesia Ferguson, PhD; Christopher Yates, BA; and J. Mick Tilford, PhD
This study examined the application of value-based insurance design to the treatment of mental health disorders and addresses any additional challenges.

Objectives: To explore the feasibility of applying value-based insurance designs (V-BIDs) to the treatment of mental health disorders and address any additional challenges posed.

Study Design: Literature review.

Methods: This study consisted of 3 steps. First, we reviewed the historical literature on V-BIDs and challenges revealed by various programs. Second, we reviewed the literature on the cost, scope, and various treatment options for mental health disorders. Third, we analyzed potential challenges in applying V-BIDs to mental health disorders.

Results: Many challenges exist in applying V-BID to the management and treatment of physical and mental health disorders, such as getting buy-in from insurance companies and from large employers, and adherence issues for those with diminished capabilities to comprehend program benefits and those lacking family support. Additional challenges specific to mental health disorders include: a) privacy (ie, sensitivity issues) in implementing the program in certain settings; and b) sociodemographic variables, along with perceptions of mental disorder severity and need that currently affect the take-up of mental health services.

Conclusions: Research projects focused on applying V-BID to mental health disorders that address these challenges and demonstrate cost savings will be needed (ie, comparative effectiveness research studies), along with additional information on changes in disability-adjusted life-years, and on-demand  responses across different mental health services, populations, and care settings.

Am J Manag Care. 2016;22(1):e38-e44
Take-Away Points
Prior studies examining value-based insurance design (V-BID) have focused on their application to the treatment of chronic physical disease. Here, application of V-BID to mental health disorders is examined.
  • V-BID in the treatment of mental health disorders needs to be explored as a potential cost-effective strategy with substantial societal benefits, given likely challenges. 
  • Additional challenges in applying V-BID to mental health disorders may be encountered, such as privacy and mental health usage variables. 
  • Additional information on life-years saved, disability-adjusted life-years, and demand elasticity for various mental health services across various populations will help in the application of effective V-BID in the treatment of mental health disorders.
The rising cost of healthcare over the last few decades does not equate to better health outcomes for residents of the United States compared with those of other countries, suggesting considerable waste in the system.1 Strategies are required to improve efficiency in healthcare by improving health outcomes and containing costs while simultaneously maintaining standards of quality and satisfaction. Investments in those conditions and services that demonstrate the best opportunities to provide value should be considered. Changing the environment to prevent behaviors that contribute to the development of disease is one promising approach, as are improved strategies for effective healthcare delivery.2 The concept of value-based insurance design (V-BID) is an example of a valuable healthcare delivery strategy with the potential to improve health outcomes at a lower cost.

The literature to date has primarily focused on V-BID in healthcare for the management of chronic disease.3 Some V-BIDs have been implemented through large firms working with insurance companies and employees to incentivize adherence to medication, healthy lifestyles, and other primary and preventive strategies.4-6 However, V-BIDs are not unique to private insurance and can be implemented in public insurance through Medicaid and Medicare.7-9 The expansion of healthcare services using insurance exchanges presents viable opportunities for implementing new strategies for healthcare delivery, including V-BIDs.10

This article describes the application of V-BID for mental health care services. The literature is sparse in discussions of implementing V-BID for the treatment of mental health disorders, including implementing best practices and the associated challenges. We first present an overview of V-BID and its challenges, along with a discussion of the health and societal cost implications of mental health disorders in the United States.

This study consisted of 3 steps. First, we reviewed the historical literature on V-BIDs and challenges revealed by various programs. Second, we reviewed the literature on the cost, scope, and various treatment options for mental health disorders. Third, we analyzed potential challenges in applying V-BIDs to mental health disorders.

Cost Containment in Healthcare

Per capita, Americans spend more on their healthcare than residents of any other country, clearly illustrating significant waste in the system.1 Healthcare spending is expected to grow at 5.8% per year from 2012 to 2022, which is 1% greater than the expected growth in the gross domestic product.11 As a result of the Affordable Care Act (ACA) of 2010, numerous strategies continue to be implemented to manage healthcare costs.12 For example, improvements to the concept of managed care are being introduced through accountable care organizations focused on health promotion and on using various payment methods to control costs, such as prospective payment systems, bundled payments, or some other form of capitation with additional pay-for-performance incentives for other quality outcomes, primarily through Medicaid and Medicare.9  There are additional considerations of technological integration (ie, electronic health records) for improving tracking, referrals, billing, and, ultimately, patient outcomes while reducing cost.

V-BID in Healthcare

V-BID has multiple dimensions and applications in healthcare. A key principle of V-BIDs is that not all services need to cost the same for all patients. Costs per service, or per patient, can be designed based on what will give the best value, where value is the improved health outcome over cost.13 V-BID can be separated into 2 categories: one targeting “clinically valuable co-payment reduction” and the second targeting “patients with select clinical diagnosis”; the second approach is less common and may be more difficult to implement.13

Increases in patient co-pays or deductibles in an insurance plan have been used to reduce moral hazard (ie, overuse of healthcare). However, increases in what patients have to pay have resulted in the early mismanagement of some diseases, potentially leading to increased need for acute care, emergency department (ED) care, and long-term care.14 For example, lack of adherence to diabetic medicine, due to reluctance of the patient to pay, can lead to medical complications and an overall increase in cost to the healthcare system.15 Therefore, there may be value in reducing patient co-pays and deductibles in the management and screening of some diseases.

V-BID in the treatment of physical disease (eg, chronic disease related to obesity) has shown success in a number of settings.3,5,6,13 Choudhry and colleagues, for example, looked at 76 existing V-BID plans focused on pharmaceutical adherence and found 5 features that influenced success in medication adherence for patients: generous plans, plans targeting high-risk patients, plans offering wellness programs, plans with the option to order medication by mail, and plans with no disease-management programs. Note, though this last one seems contradictory, the authors explained this may be due to a ceiling effect, or the fact that lifestyle modification may reduce the need for medication, making the patients seems as though they are being nonadherent in such a program. These plans were focused on managing diabetes, cholesterol, and hypertension.3 Further studies are needed to learn how to best structure V-BIDs so they can more effectively ensure improvements in both the quality of healthcare delivery (ie, measurably improved health outcomes) and in actual reduced costs over time.16,17

Challenges of V-BID in Healthcare

Challenges are inherent in implementing V-BIDs, and difficulties arise in identifying the groups of diseases or individuals for which V-BID will result in cost savings. V-BIDs also become challenging to implement when patients who are choosing among healthcare services and insurance plans have difficulty understanding their details and distinguishing which will be most beneficial to them.18,19 Well-designed pilot projects are needed to see how various populations (ie, varying socioeconomic backgrounds, pre-policy adherence profiles) respond to and utilize V-BIDs in disease treatment.20 Specifically, establishing price responsiveness for the treatment and management of various diseases, then applying the most effective pricing for deductible and co-pays, is imperative to optimize the outcome and proper application of any V-BID program. Large insurers or firms can then tailor health plans to a particular employee or member with a particular disease and use innovative strategies to improve adherence in the program (ie, active counseling, ThinkingFit program for dementia).6,21-24

A survey of 80 companies (ie, employers, health plans, academic researchers, and employee benefit consultants) revealed 10 challenges in applying V-BID, from “obtaining and integrating data” (seen as the greatest challenge) to “gaining support from top management.” Other important challenges include “keeping the momentum going,” “enrolling employees in disease management,” and “getting the employees to use the new benefits.” These challenges further demonstrate the necessity of multiple parties (ie, employees, physicians, and management) to cooperate to get a V-BID program to work. Communicating the program’s structure and intent to everyone is important, along with implementing incentives for behavioral change and program adherence.23

Cost of Mental Health Disorders in the United States

The cost of treating mental health disorders in the United States is high. In 1990, the total expenditure for mental health was estimated at $74.6 billion; by 2009, it had risen to $155.3 billion, as estimated by the Substance Abuse and Mental Health Services Administration (SAMSA; figures adjusted to 2012 US$).25 Further, the cost of services for mental health disorders was estimated at 6.9% of all health expenditures in 1990, with a slight reduction to 6.3 % by 2009. In 2011, more than 41 million Americans were estimated to have a mental health disorder, with another 20 million having substance abuse problems.25 Mental and behavioral disorders include schizophrenia, alcohol and drug use disorders, unipolar depressive and bipolar affective disorders, anxiety disorders, childhood behavioral disorder, idiopathic intellectual disability, and many more. Within these categories are often subcategories: unipolar depressive disorder can include major depressive disorder and dysthymia, for instance.26

Disability-adjusted life-years (DALYs), calculated as the sum of years lost due to premature or early mortality and the years lost due to a disability, are useful in measuring the burden of mental health disorders.26 Globally, in 2010, mental and behavioral disorders were responsible for 7.4% of the total DALYs, up from 5.4% in 1990, with total DALYs at 361 days per 1000 population, across all age groups. In high-income global regions, such as North America and Western and Central Europe, mental and behavioral disorders account for 11% of DALYs—a percentage expected to grow.26

The impact of mental health disorders is often not fully realized, with many general health issues treated only as physical disease when the root causes are mental. Some estimates state that only half of all mental illnesses are recognized by primary care physicians, and only half of those with a recognized mental health disorder receive treatment.27 Such estimates support the reshaping of healthcare delivery, in which the treatments of mental and physical health are integrated and addressed by a multidisciplinary team of care providers (ie, social workers, physical therapists, occupational therapists, and various medical doctors) to increase efficiency and reduce costs,27 and support exploration of additional strategies to improve the treatment of mental health disorders.

Furthermore, the total cost of mental health disorders is not fully reflected in direct healthcare costs. Mental illness and substance abuse have related indirect costs from reduced employment and arrest, as well as physical disease, and, significantly, ED visits that are not directly linked to the particular mental disorder. It is estimated that 44.7% of those who visit the ED for any condition also suffer from a mental illness and/or have been identified as having a substance abuse problem.25 In 2010, of 129.8 million total ED visits in the United States, 13.3% resulted in a hospital admission, resulting in further costs to the healthcare system.28 Of the 129.8 million, using the 44.7% estimate, more than 58 million could be assumed to have a mental health disorder and/or substance abuse problem.

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