Experts outlined the impact value-based insurance design (VBID) has had on the coronavirus disease 2019 (COVID-19) pandemic response and future potential applications of the model.
In the wake of the coronavirus disease 2019 (COVID-19) pandemic, experts have issued renewed calls to prioritize value-based care both during the outbreak and beyond. However, some providers may find the transition from fee-for-service to new models challenging, especially as they cope with the continued pressures of an ongoing public health crisis.
In a webinar hosted by America’s Health Insurance Plans (AHIP), experts gave an overview of the value-based insurance design (VBID) model and outlined key goals and guidelines for those looking to implement VBID.
In 2015, CMS launched the Medicare Advantage (MA) VBID Model test to address the issue of out-of-pocket (OOP) costs by giving MA plans the opportunity to offer supplemental benefits or reduced cost-sharing for enrollees with certain chronic conditions. In 2019, the Center for Medicare and Medicaid Innovation (CMMI) under CMS expanded its MA VBID model to eligible plans in all 50 states and created more risk sharing in Part D payment models for plan sponsors. In Medicare, 98% of spending is allotted to chronic diseases.
“Americans, and Medicare beneficiaries in particular, do not care about aggregate health care costs…What they care about is what it costs them,” said Mark Fendrick, MD, director of the University of Michigan Center for Value-Based Insurance Design, and co-editor-in-chief of The American Journal of Managed Care® (AJMC®). Consequently, VBID “is a model that, instead of setting cost sharing on the price of the service, sets consumer out-of-pocket costs on the clinical benefit.”
Currently, a large number of Medicare beneficiaries—many of whom are on fixed incomes—pay substantial OOP amounts for their health care. To afford the increase in cost of care while incomes remain stagnant, many beneficiaries have made substantial lifestyle changes, “including reduction of spending on non-essential activities, reduced spending on everyday purchases and accrued credit card and other debt,” Fendrick explained. The core of VBID “is to make essential clinical services more accessible to Medicare and Medicaid beneficiaries.”
Since the 2019 CMMI decision to expand the model, MA VBID is active in 45 states, while the fundamental principles of VBID have been instrumental in crafting federal responses to COVID-19 cost concerns. “It was VBID principles that were used to eliminate cost sharing for COVID-19 testing, initially in the first COVID-19 response act,” Fendrick said. The amendment to Public Health Service Act Section 2713—which initially put VBID programs in place—“was the vehicle, such that now all Americans can receive the COVID-19 vaccine at no cost to them.”
Although challenges in COVID-19 vaccine access remain, “We are extremely happy to know that one of the main barriers to high-value care in the Medicare program has been removed,” Fendrick remarked.
Mark Atalla, who led the VBID model at CMMI, elaborated on the expansion of VBID during the past 6 years, noting the program grew from tens of thousands initially to providing targeted benefits to 1.6 million beneficiaries. “This is really a successful program. And it likely will continue to grow,” he said.
Overall, VBID prioritizes cost-effective health care as opposed to cost savings. “The more high-value care we buy, there will be some offsets particularly more in some conditions that have high levels of preventable hospitalizations, like congestive heart failure, and fewer in those situations where there aren't as many offsets,” Fendrick said. But he argues this should not be the driving force. “I do also believe that in coming years, attention will have to be paid to the billions of dollars that are currently being spent in the Medicare program that are not making Americans any healthier.”
The removal of easily identifiable, low-value services would allow for plans to provide more generous coverage for services that should be covered on a pre-deductible basis or without cost-sharing, Fendrick said.
As VBID gives plans the ability to be more innovative and to target different cohorts based on socioeconomic status and disease state, the model provides a competitive advantage, explained Matthew Loper, co-founder and CEO of Wellth.
Wellth acts as a middleman, aiding plans in their transition to VBID by utilizing behavioral economics concepts (intention-behavior gap, present bias, the endowment effect and loss aversion, and choice architecture). The organization’s goal is to create behavior change and lasting habits, so members can ultimately attain better health outcomes.
“At Wellth we are leveraging these behavioral economic principles, to really help drive impact on care plan adherence, especially for these specific chronic conditions, quality metric improvement related to stars ratings, and finally, health equity and social determinants of health,” Loper said.
Using the example of the intention-behavior gap, defined as when intentions fail to translate into action, Loper explained the challenge of making sure members who have the motivation and intent to receive their first COVID-19 shot do actually receive their follow-up dose. “Because in every 2-step process in history in health care, there's a pretty large attrition rate between that first step and that second step. Something on the order of about 20% of people don't follow through with that second step,” Loper said.
One solution could be the introduction of patient support programs and potentially a reward for those who receive the second dose of the 2-dose regimen, Fendrick explained. “You make the deposit… you leverage loss aversion by letting [patients] know that it's there for them if they were to complete the second dose, but you go beyond the financial reward.”
Providing information that's necessary about scheduling the second dose, assisting patients with transportation to receive the second dose, and correcting misinformation can all help combat the intention-behavior pitfall, Fendrick said.