1. Value-Based Insurance Design:
A Clinically Driven Approach to Improve Rheumatologic Care and Lower Health Spending
Michael Budros, MPH MPP
University of Michigan Center for Value-Based Insurance Design
@um_vbid
Introduce yourself
Introduce Center
The University of Michigan Center for Value-Based Insurance Design (V-BID Center) is the leading advocate for development, implementation and evaluation of clinically nuanced health benefit plans and payment models. Since 2005, the Center has been actively engaged in understanding the impact of innovative provider facing and consumer engagement initiatives and collaborating with employers, consumer advocates, health plans, policy leaders, and academics to improve clinical outcomes and enhance economic efficiency of the U.S. health care system. 

2. Restoring Health to the Health Care Value Debate
Innovations to prevent and treat disease have led to impressive reductions in morbidity and mortality 1
Irrespective of remarkable clinical advances, cutting health care spending is the main focus of reform discussions 2
Underutilization of high-value care persists across the entire spectrum of clinical rheumatology care 3
And as a result of fast paced innovation and cutting costs, we have underutilization and delivery systems unprepared for medical innovation.
Our ability to deliver high-quality health care lags behind the rapid pace of scientific innovation 4

3. Star Wars Science
We are working with Star Wars medical innovation…

4. Flintstones Delivery
With a Flinstones delivery system that fails to keep up with advances in medical technology regardless

5. Moving from the Stone Age to the Space Age:
Change the discussion from “How much” to “How well”
Three-quarters of Americans say that our country doesn’t get good value for what it spends on healthcare
Policy deliberations focus primarily on alternative payment and pricing models
Consumer engagement is an essential and important lever to enhance efficiency of medical care delivery
Consumer cost-sharing is a common and important policy lever
The ultimate goal of the VBID Center is to transform the conversation from how much are we spending to how well.
At the VBID Center we focus primarily on the demand side of the health care equation, and therefore we think a lot about consumer cost sharing and the impact that has on this conversation

6. ConsumerCost-sharing Translating Research into Policy
Value-Based Insurance Design in Care:
Outline
ConsumerCost-sharing
Translating Research into Policy
Low- Value Care
Clinical Nuance/
V-BID
Precision
Benefit
Design

7. Inspiration “
I can’t believe you had to spend a million dollars to show that if you make people pay more for something, they will buy less of it. ”
Mark Fendrick, along with his colleague at Harvard Medical School, Michael Chernew, coined the term Value-Based Insurance Design over a decade ago…
- Barbara Fendrick (Dr. Mark Fendrick’s mother)

8. Consumer Cost-Sharing: Paying More for ALL Care Regardless of Value
Deductibles
Deductibles and coinsurance are on the rise, which put significantly more risk on the consumer.
Increased cost sharing, esp deductibles, has traditionally been a very blunt instrument to reduce costs.
The problem: the overwhelming increase in deductibles are not nuanced, reducing the consumption of care indiscriminately rather than care we don’t want or need
Early VBID research showed that increased cost sharing, even small amounts, will reduce high value consumption
Co-insurance
Co-payments

9. Moving from the Stone Age to the Space Age:
Change the discussion from “How much” to “How well”
“One size fits all” increases in consumer cost-sharing
(eg, deductible increases):
‘blunt’ instruments that reduce the use of high value care
adversely affect health, particularly among economically vulnerable individuals and those with chronic conditions
Most research on HDHPs, for example, show negative effects on health as a result, especially for those with low income and or multiple chronic conditions – even if you’re not in a true HDHP, deductibles in many PPO plans are about as high
At the very least, what it costs them will influence their behavior.

10. One in Four Patients Have Difficulty Affording Their Prescription Medicines
This applies especially to seniors, who often face tradeoffs regarding other essentials, such as food and shelter, to pay for their medication
VBID has been shown to reduce cost-related non-adherence, a problem in which patients skip or cannot ford medications due to out of pocket costs – in some cases reducing CRN can be cost-saving by maintaining their chronic condition and avoiding more expensive treatments
Kaiser Family Foundation Tracker Sept 2016

11. Americans Do Not Care About Health Care Costs; They Care About What It Costs Them

12. Health Care Costs Are Top Health Care Issue For Voters

13. ConsumerCost-sharing Translating Research into Policy
Value-Based Insurance Design in Care:
Outline
ConsumerCost-sharing
Translating Research into Policy
Low- Value Care
Clinical Nuance/
V-BID
Precision
Benefit
Design

14. An Alternative to ‘Blunt’ Cost-Sharing
Clinical Nuance:
An Alternative to ‘Blunt’ Cost-Sharing
A clinical service is never always high or low value
The clinical value of a specific service depends on:
Who receives it
When in the course of disease
Who provides it
Where it is provided
Just to be clear… If you actually tweet this, I may indeed get a raise.
A “smarter” cost-sharing approach that encourages consumers to use more high value services and providers, but discourages the use of low value ones
A “smarter” cost-sharing approach that encourages consumers to use more high value services and providers, but discourages the use of low value ones

15. Clinical Nuance: Key Takeaway
And cost sharing should reflect this fact – we should be incentivized to consume evidence-based medicine
It makes no sense that someone pays the same copayment for a drug that may save your life versus a drug that cleans toenail fungus

16. Implementing Clinical Nuance: Value-Based Insurance Design (V-BID)
Sets consumer cost- sharing on clinical benefit – not price
Little or no out-of- pocket cost for high value care
Successfully implemented by hundreds of public and private payers
Commercial success has shown that reduce cost sharing for high value drugs can increase adherence, and in some cases, reduce overall health spending.
Not just drugs: IBM encouraged greater use of primary care visits
Some programs do not reduce overall spending, maybe just keep it the same, but still improve quality of life – there is a shift of resources to high value __
“Value” in V-BID plans is usually set according to longstanding measurements of quality established by decades of study of medical records.

17. ConsumerCost-sharing Translating Research into Policy
Value-Based Insurance Design in Care:
Outline
ConsumerCost-sharing
Translating Research into Policy
Low- Value Care
Clinical Nuance/
V-BID
Precision
Benefit
Design

18. V-BID: Rare Bipartisan Political and Broad Multi-Stakeholder Support
HHS
CBO
SEIU
MedPAC
Brookings Institution
Commonwealth Fund
NBCH
American Fed Teachers
Families USA
AHIP
AARP
DOD
BCBSA
National Governor’s Assoc.
US Chamber of Commerce
Bipartisan Policy Center
Kaiser Family Foundation
American Benefits Council
National Coalition on Health Care
Urban Institute
RWJF
IOM
Smarter Health Care Coalition
PhRMA
ASCO
AMA
Not common to have Families USA, PhRMA, BPC, and the US Chamber on the same list

19. Putting Innovation into Action: Translating Research into Policy

20. ACA Sec 2713: Selected Preventive Services be Provided without Cost-Sharing
Receiving an A or B rating from the United States Preventive Services Taskforce (USPSTF)
Immunizations recommended by the Advisory Committee on Immunization Practices (ACIP)
Preventive care and screenings supported by the Health Resources and Services Administration (HRSA)
Over 137 million Americans have received expanded coverage of preventive services as a result of VBID provision

21. ACA Sec 2713: Selected Preventive Services be Provided without Cost-Sharing
In 2016 it was #2

22. Putting Innovation into Action: Translating Research into Policy
V-BID: Bipartisan Political and Broad Multi-Stakeholder Support
HHS
CBO
SEIU
MedPAC
Brookings Institution
Commonwealth Fund
NBCH
American Fed Teachers
Families USA
AHIP
AARP
DOD
BCBSA
National Governor’s Assoc.
US Chamber of Commerce
Bipartisan Policy Center
Kaiser Family Foundation
American Benefits Council
National Coalition on Health Care
Urban Institute
RWJF
IOM
Smarter Health Care Coalition
PhRMA
EBRI

23. More Than One-Third of Medicare Beneficiaries Spent 20% or More of Their Income on Out-of-Pocket Costs in 2013

24. REVLIMID: $11,538 SOVALDI: $6,608 HUMIRA: $4,864
Medicare Beneficiaries Can Pay Thousands of Dollars Annually for Specialty and Other High-priced Drugs
REVLIMID: $11,538
Median annual out-of-pocket costs, 2016:
SOVALDI: $6,608
HUMIRA: $4,864
Humira example
NOTE: Analysis includes 20 national and near-national stand-alone prescription drug plans in Baltimore, MD (zip code 21201) and reflects pricing at a Rite Aid pharmacy in this zip code.
SOURCE: Georgetown/Kaiser Family Foundation

25. MA V-BID Model Test expanded to all 50 States by 2020
MA V-BID – 1st CMS Demonstration Allowing Cost-Sharing Reductions for Individuals with Specific Clinical Conditions
MA V-BID Model Test expanded to all 50 States by 2020
The only demonstration implemented in the Obama Adminstration and expanded in the Trump Administration

27. Rheumatoid arthritis specifically included

28. Putting Innovation into Action: Translating Research into Policy
Active duty military and retirees and their families have access to medical services through military health care system

29. 2017 NDAA: Obama Administration - reduce or eliminate co-pays and other cost sharing for certain high services and providers
2018 NDAA: Trump Administration – reduce cost sharing for high value drugs on the uniform formulary

30. Putting Innovation into Action: Translating Research into Policy
HSA QUALIFIED HDHPS

31. PREVENTIVE CARE COVERED Dollar one
IRS Rules Prohibit Coverage of Chronic Disease Care Until HSA-HDHP Deductible is Met
PREVENTIVE CARE COVERED Dollar one
CHRONIC DISEASE CARE
NOT covered until deductible is met

33. Chronic Disease Management Act of 2018 Expand Pre-Deductible Coverage to High Value Care

35. List of services and drugs for certain chronic conditions that will be classified as preventive care under Notice
Osteoperosis

36. ConsumerCost-sharing Translating Research into Policy
Value-Based Insurance Design in Care:
Outline
ConsumerCost-sharing
Translating Research into Policy
Low- Value Care
Clinical Nuance/
V-BID
Precision
Benefit
Design

37. Precision Benefit Design

39. “When a patient and their clinician(s) agree that an evidence-based therapy is “first line”, the patient should pay a first tier co-payment for that therapy, regardless if it the first, third or sixth drug used.”

41. ConsumerCost-sharing Translating Research into Policy
Value-Based Insurance Design in Care:
Outline
ConsumerCost-sharing
Translating Research into Policy
Low- Value Care
Clinical Nuance/
V-BID
Precision
Benefit
Design

42. Creating ‘Headroom” to Pay for High-Value Care
Discouraging the use of specific low-value services must be part of the strategy
Unlike delay for cost offsets from improved quality, savings from waste elimination are immediate and substantial
Identification, measurement, and removal of unnecessary care has proven challenging
No one would argue that there isn’t enough money in the health care system; we have a resource allocation crisis.
Trust me – the VBID Center would much rather be known for the people who increased access to preentive services in the ACA, but part of the equation needs to be freeing resources for potentially expensive, but effective treatments in the future
Relieving the tension between reducing the fiscal impact of health care costs and the need to provide high quality and effective medical innovations to patients can start with reducing clinical waste.
A program by a large public employer in Oregon raised cost-sharing for sleep studies, upper gastrointestinal endoscopies, advanced imaging services and certain types of overused procedures, like surgery for back pain. 

43. Reducing Low Value Care: Where to Start?
Although much of the low-value care discussion has focused on high-cost services, low-cost items are less likely to draw attention by particular clinicians or patient advocacy groups
Choose services:
Easily identified in administrative systems
Mostly low value (little or no clinical nuance)
Reduction in their use would be barely noticed
Federal policy: Section 4105 of the ACA – HHS Secretary has the authority to restrict Medicare payment for “D” rated services
Mafi and low-cost high volume, WA also saw the same results
Could mention the ACPD project as well

44. Multi-Stakeholder Task Force on Low Value Care Identifies 5 Commonly Overused Services Ready for Action
1. Diagnostic Testing and Imaging Prior to Surgery
2. Vitamin D Screening
3. PSA Screening in Men 75+
4. Imaging in First 6 Weeks of Low Back Pain
5. Branded Drugs When Identical Generics Are Available
Diagnostic testing and imaging prior to surgery, eg. cardio tests before cataract surgery (low risk patients, low risk surgery)
Vitamin D screening – Mark will commonly say: show me a case of rickets and I will change my mind. Only a specific population of people need to be tested, but tests often lumped in with others. Good example of a low-risk Top 5.
PSA screening – good example of the lack of information about cascading downstream harm and lack of evidence

45. V-BID X:
Better Coverage, Same Premiums and Deductibles

46. V-BID X
Infographic images

47. V-BID X
Infographic images

48. Aligning Payer and Consumer Incentives: As Easy as Peanut Butter and Jelly
Many “supply side” initiatives are restructuring provider incentives to move from volume to value:
Medical Homes
Electronic Medical Records
Accountable Care Organizations
Bundled Payments/Reference Pricing
Global Budgets
High Performing Networks
But too often providers are incentivized through quality metrics and payment systems to provide services that patients cannot afford, due to financial barriers that do not consider clinical nuance

49. Aligning Payer and Consumer Incentives: As Easy as Peanut Butter and Jelly
Unfortunately, some “demand-side” initiatives – including blunt consumer cost sharing - discourage consumers from pursuing the “Triple Aim”

50. Aligning Payer and Consumer Incentives: As Easy as PB & J
“We believe that relying on clinically informed financial incentives – for patients and providers – will be useful in achieving improved health outcomes for any level of health care expenditures.”
Fendrick and Chernew. JGIM