We spoke with Dr Mark Fendrick, co-editor-in-chief of The American Journal of Managed Care®, and director of the University of Michigan Center for Value-Based Insurance Design, or V-BID, on how the principles of V-BID can be used to make a real difference for the millions of American families financially struggling with the impacts of coronavirus disease 2019 (COVID-19) and can help shape the new healthcare delivery landscape after the pandemic.
Today on MJH Life Sciences™ News Network, I’m speaking with Dr Mark Fendrick, co-editor-in-chief of The American Journal of Managed Care® (AJMC®) and director of the University of Michigan Center for Value-Based Insurance Design, or V-BID, on how the principles of V-BID can be used to make a real difference for the millions of American families financially struggling with the impacts of the coronavirus disease 2019 (COVID-19) and can help shape the new healthcare delivery landscape after the pandemic.
The concept of V-BID arose nearly 2 decades ago from an AJMC® commentary coauthored by Dr Fendrick and Dr Michael Chernew, also co-editor-in-chief of AJMC®. In the commentary, they and their colleagues discussed the idea of a benefit-based co-pay for prescription drugs, in which the price paid by a patient is calculated based on the expected clinical benefit of a drug, not its acquisition cost.
“By linking the patient contribution to the estimated evidence-based clinical and economic benefit at a patient-specific level, a greater proportion of the population most likely to benefit from taking a medication will be able to do so,” they wrote.
Since the publication of that commentary in 2001, the journal has published research and commentary on the evolution of this idea to encompass clinical services, not just prescription drugs, and a focus on eliminating wasteful low-value care while promoting cost-effective preventive drugs and services.
Recent editorials by Dr Fendrick published in AJMC® have introduced the idea of the drug price iceberg, the primary care “screen door” analogy, and the call for “precision patient assistance programs” to help with the cost of precision medicines. Now, as the healthcare system confronts the unexpected global challenge of the coronavirus disease 2019, or COVID-19, pandemic, Dr Fendrick and coauthor Beth Shrosbree have contributed a very timely editorial calling for expanded coverage of essential care during COVID-19 and beyond.
Dr Fendrick explains why it’s important to reduce costs for a broad range of essential health services, not just COVID-19 care, and highlights which changes he sees making a permanent impact even after the pandemic abates. Stay tuned for the interview, and read the full commentary online ahead of print in the May issue, at ajmc.com/link/4572.
AJMC®: Welcome to the MJH Life Sciences™ News Network. Can you introduce yourself and tell us about your work with the V-BID Center?
A. Mark Fendrick: Hi, I’m Mark Fendrick. I’m a practicing general internist and I direct the Center for Value-Based Insurance Design at the University of Michigan. We work to increase access and affordability of essential healthcare services and try to pay for it by reducing care that doesn’t make Americans any healthier.
AJMC®: So for those who might not be familiar, what are the principles of V-BID?
Fendrick: So in America, most people with public and private insurance, they pay the same out of pocket for the services that are highest value or I beg my patients to do, or the services that don’t make them any healthier. Value-based insurance design has a clinically driven or clinically nuanced approach to cost sharing, in the fact that instead of setting what my patients pay out of pocket based on the cost of the service, we set their out-of-pocket costs on the clinical value. So the high-value services, there are little or no out-of-pocket payments; and for the services they really don't need, they should pay a lot.
AJMC®: Right. In your recent AJMC® commentary, you write that the pandemic has uncovered a flaw in current benefit designs that do not provide affordable coverage for critical services. What are these flaws, and how are they exacerbated by the COVID-19 crisis?
Fendrick: Thanks for highlighting that key point. We've tried for many, many years, and AJMC has been a key outlet of our views that even if you have an insurance card doesn’t mean that you’re covered and that your coverage will allow you to get the care you need. Most Americans now with private insurance have deductibles over $1000, families approaching $4000, and 40% of Americans don’t have $400 in the bank. So there’s a rub there in terms of what you’re actually able to get in terms of your clinically necessary services. So the COVID epidemic comes around and we realize that close to two-thirds of Americans are fearful of not having the money they need to pay for COVID testing and treatment. And it ultimately exposed the fact that even if you had insurance didn’t mean that you would have the resources available to get emergent care say like COVID testing, or even worse, COVID treatment.
So we were able to work very quickly with the federal government to allow legislation to be passed that all health plans had to cover all Americans who had a visit that led to a COVID test. But we fell a little bit short for those few patients who actually needed COVID hospitalizations. Fortunately, there has been a large majority of private and some public insurers who decided to waive cost sharing for COVID treatment in its entirety. So this brought to bear the issues that we saw for decades for people with cancer and diabetes and mental health and substance abuse disorders, even though they had insurance, they did not have coverage of the care they needed. And we’re hopeful that these some mandatory and some voluntary policies that removed cost sharing for high-value COVID services will be extended in the post-COVID era to the services to treat other common chronic conditions for which million Americans cannot afford the care that will improve their quality of life.
AJMC®: What role can V-BID play in providing relief to families who are struggling now with the impacts of COVID-19?
Fendrick: Well, specifically for COVID, I think it’s really reassuring to know that our work and the work of our many, many colleagues have removed any concerns that people might have to get tested for the coronavirus and hopefully get financial relief for treatment for COVID-19 illnesses. Some of the policies are mandatory, as I mentioned, others are voluntary. But I do believe that as the entire country turns to common themes of abating the spread and hopefully the clinical negative implications of people who are infected, we will understand that there is actually a common societal element that will emerge that would be beneficial to not only individuals who may or will be sick from COVID, but those will be reassured that if they were to become sick that they would not have to go into financial hard times.
AJMC®: Why is it important to expand coverage and reduce costs for a wider range of essential health services, not just COVID-19 care?
Fendrick: Well, at least 1 in 4, maybe 1 in 3 Americans say that they don’t have the money to get the essential healthcare that they need. That includes doctor visits, diagnostic tests, and drugs. So we’ve known these issues of what is now called underinsurance, or having an insurance plan that does not cover you adequately for the care you need, has been around for decades. No surprise, the patient populations that are impacted most by these costs are those who are socioeconomically challenged and those with multiple chronic conditions. Lo and behold, these are the same populations that we’re most worried about, for those at highest risk for COVID-19. So there is again some confluence to the larger public health issues of COVID-19, and our need to think about better, more clinically driven benefit designs that allow patients to get the care they need, but also make it harder to get the care that they previously had access to that wasn't going to help them very much in terms of their health.
AJMC®: What are some recent regulatory or policy changes we've already seen to implement V-BID principles in response to COVID.
Fendrick: Yeah, we were very fortunate to have quick inclusion of V-BID principles in several of the coronavirus-related relief packages. The first package, the Family First Act, removed cost sharing for COVID-related telehealth and allowed high-deductible plans to cover COVID-related testing on a predeductible basis. The larger package, the CARES Act, the $2.2 trillion COVID relief package, that extended the telehealth V-BID benefits beyond COVID-related care and that all telehealth, regardless of its clinical reason, could be provided on a predeductible basis. It also importantly amended section 2713 of the Affordable Care Act, the V-BID portion of the ACA, in the fact that when we have a COVID vaccine, within 15 days, all plans have to make that vaccine zero cost sharing to clinically indicated beneficiaries. So not only did V-BID deliver on COVID now, regarding testing and related telehealth, but it also is a gift that keeps on giving in the fact that when we hopefully get an effective vaccine, patients won’t have to worry about paying out of pocket to receive it.
AJMC®: So you think that these changes with telehealth will continue even after COVID is over?
Fendrick: So I’m a silver lining guy and you know, we never let any crisis to emerge without an opportunity. We have been bullish about telemedicine for quite some time. Telemedicine is a key component of what people at CMMI called V-BID 2.0, which is the recent expansion of the Medicare Advantage value-based insurance design model test. And it’s been very interesting to see that those of us who felt telemedicine would have a key role for both patients and providers in terms of getting patients the care they need in a setting that’s most reliable, has gone on kind of superspeed now, in the fact that my own patients I see through telephone and visual visits, and hopefully we will be able to set the new normal in the fact that the people who need to come and see us will see us in person, but those patients who could get highly satisfied, high quality care through a telemedicine visit, I believe will be here for quite some time in the future.
AJMC®: Great. What further steps would be most impactful for helping Americans afford care?
Fendrick: Well, I think what’s kind of interesting, Christina, as you know, through this V-BID journey is value-based insurance design has been bipartisan and multistakeholder, and who’s going to be against spend more on the good stuff and less of the bad stuff? I think what’s important, and what many people call the second or third coming of value-based insurance design, is our ability to engage purchasers around action to reduce the use of what some people think is several hundred billion dollars in healthcare spending every year that doesn’t make Americans any healthier. So we’ve moved forward this idea of benefit design that includes more of the good stuff and less of the bad stuff, which we call V-BID X. The X is designed initially for the exchanges or the individual marketplaces. But now, we have a template of a plan that will make high-value services less expensive and predeductible. This is many classes of chronic disease drugs, some visits, and durable medical equipment. And it’s paid for not by raising premiums on everyone, or raising deductibles and cost sharing on sick people, but instead is paid for dollar for dollar by raising cost sharing or noncoverage on care that is clinically not indicated or in most situations clinically not indicated. The good news and bad news is there’s a lot of waste out there, and hopefully we could eliminate that to provide some headroom to allow more generous coverage of the high-value services that are not being accessed and are not affordable to many people, even those with pretty good health plans.
AJMC®: Right. That’s the end of my questions. Was there anything you wanted to add?
Fendrick: No, I just want to thank AJMC® for providing us an opportunity to provide information to key constituencies in the healthcare workplace. I think that many people are thinking about COVID now; we in AJMC® and myself are thinking about what the new normal will be in healthcare. And I think that it should allow us an opportunity to get rid of some of these older ideas and programs that promulgate the use of services, regardless of their clinical value. And we’re extraordinarily hopeful, as we emerge into a new type of healthcare delivery, that stakeholders come together about providing more of the services that we know make Americans healthier, and we could have the courage to hopefully eliminate a large portion of the billions of dollars we spend on things that don’t make Americans any healthier.
AJMC®: Great. Thank you for your time.
Fendrick: Thank you very much.