Kimberly Westrich, MA, vice president of health services research at the National Pharmaceutical Council, discusses value-based benefit design strategies for high-deductible health plans.
With high-deductible health plans utilized by more than half of the US workforce, there are several value-based benefit design strategies to promote use of high-value, cost-effective services, said Kimberly Westrich, MA, vice president of health services research at the National Pharmaceutical Council.
Westrich recently participated in a panel discussion at the National Alliance 2021 Annual Forum titled “Building Better Benefits: Rethinking Value-based Benefit Design.”
What strategies can be gleaned from your research in constructing effective value-based benefits?
We’ve actually done a lot of research on high-deductible health plans in recent years. And one of the reasons for that is that over half of the workforce is enrolled in a high-deductible health plan, and if you look at high-deductible health plans through a value lens, they're actually a very blunt tool.
What does that mean? A blunt tool means that if you are a patient who has a high deductible, what we're seeing happen is not only do you avoid that unnecessary care, which is low-value care, but patients are also tending to avoid the high-value care, the preventive services that don't even have a co-pay.
So, a more nuanced tool would be nudging us in the direction of adhering to those high-value services and nudging us away from those low-value services. The high-deductible health plan on its own is a blunt tool that doesn't get that nuanced nudging. So, how might we get that nuanced nudging?
There's a couple of ways that we can do it. One area that we've done some recent research in is looking at predeductible coverage of chronic medications. The [Internal Revenue Service] released new guidance in 2019 that expanded the number of services that could be covered predeductible, and that includes chronic medications that can prevent the exacerbation of chronic conditions like heart disease and diabetes.
What's good about that is it's nudging us in the direction of high-value care. It's lowering the financial barriers that might keep patients from filling these important prescriptions, it helps enhance adherence, and ultimately that is keeping patients healthier, keeping them more productive at work, keeping them out of the hospital and the emergency room. So, in short, that is incentivizing high-value care.
Now, we were really curious to see the extent to which this guidance might have been affecting the value-based benefit design choices that employers were making. So, we partnered with Paul Fronstin, MD, from the Employee Benefit Research Institute, and A. Mark Fendrick, MD, from the Center for Value-Based Insurance Design, to evaluate the extent that employers were actually adopting predeductible coverage of chronic medications.
We found that three-quarters of employers had expanded their predeductible coverage in response to this change in guidance. So, that's encouraging in terms of seeing changes in value-based benefit design that are designed to nudge us in the direction of higher-value care. And for folks who want to read more about predeductible coverage and why it makes sense, what specifically is allowed, we've got a couple of resources on our website.
One is the issue brief that we did with Paul and Mark. The second is an action brief that we partnered with the National Alliance of Healthcare Purchaser Coalitions on and that action brief is called “Better Value, Smarter Deductibles.”
Now, this predeductible coverage of chronic medications is just one way that a high-deductible health plan can be designed in a more value-based manner. Some other good practices when it comes to value-based benefit design for high-deductible health plans include educating your employees so that they know how to use the deductible, so that they know what services are covered outside of the deductible; giving them tools so that they can find out ahead of time, how much is my medicine going to cost? How much is this surgery going to cost?
We've got some research that will be coming out probably in January 2022 that dives more deeply into what some of these good practices are, and I'm looking forward to sharing that with you in the near future.