A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design (V-BID) at the University of Michigan and co-editor-in-chief of The American Journal of Managed Care®, and Suzanne F. Delbanco, PhD, executive director of Catalyst for Payment Reform, discuss V-BID X for employers, a plan constructed through benefit-design and payment reform that works to promote high-value services and deter low-value care.
In an article published last month, Suzanne F. Delbanco, PhD, executive director of Catalyst for Payment Reform, highlighted that although Value-Based Insurance Design (V-BID), a health insurance benefit model, has already influenced healthcare spending by requiring all health insurance carriers to offer a certain set of essential preventive services without copayment in the Affordable Care Act, its potential has yet to be fully realized.
Speaking in the webinar, “V-BID X for Employers,” Delbanco and A. Mark Fendrick, MD, director of the Center for Value-Based Insurance Design at the University of Michigan and co-editor-in-chief of The American Journal of Managed Care®, detail the latest innovations within this model as a framework to guide employers in both reducing access to low-value care and increasing access to drugs and services shown to improve employee health and control chronic illnesses.
Low-value care is an issue that Fendrick says contributes to the $375 billion spent out of pocket annually on healthcare, with examples including vitamin D screening tests, diagnostic tests before low-risk surgery, and prescribing branded drugs when identical generics are available.
Freeing up money on healthcare within employer budgets is crucial, as current health spending makes up 18.1% of the United States' gross domestic product, amounting to nearly $3.4 trillion. “Price is a very big driver of healthcare costs. Why are prices growing, and why are they such a big driver? It’s largely due to the fact that there has been a huge amount of consolidation among healthcare providers,” says Delbanco.
As Delbanco explains, this trend would be understandable if the quality of care related to these prices, but currently, just 8% of adults at least 35 years have received all recommended high-priority preventive services. “The amount of consolidation that’s been happening over the past decade has led to a real imbalance in power in many healthcare marketplaces where providers are really in a position to command whatever prices they like. Again, prices have no correlation to quality of care,” says Delbanco.
To assist employers in developing mechanisms that relate healthcare spending to the value of care achieved, Fendrick introduced V-BID X, a plan constructed through benefit-design and payment reform that works to promote high-value services and deter low-value care. “In a cost-neutral V-BID design, they are feasible, they can be done, and there’s a large number, almost infinite number, of plausible combinations of services and cost-sharing changes that would allow us to get to cost neutrality as long as you have the courage to go after specific low-value care services or categories of care,” he says.
Fendrick stresses that the goal of V-BID X is not to be an academic exercise for employers, but an actual template for one to look at and understand that achieving high-quality care, while maintaining the same premiums and deductibles, is possible.
“The one thing worse than having a patient have a low-value care service covered is a patient having to pay out-of-pocket fully for a low-value care service… as we put in benefit designs, and more importantly, payment reforms around these designated low-value care services, they have to be provider liable or patients will end up in that really difficult situation of battling getting a care [service] that might harm them, but [they] have to pay full price for it,” says Fendrick.