Value-Based Insurance Design

I read with great interest an article [2 week access] in Health Affairs written in part by Michael Chernew professor of health care policy at Harvard.

One feature of this design has co-pays varying inversely to the "benefit" of the service.  This would encourage those to seek out services whose benefit exceeds the cost of the service while discouraging those services (thru higher co-pays) those that do not justify. 

For example, Pitney Bowes has reduced copays for all users of drugs commonly prescribed fro diabetes, asthma, and hypertension compared to copays of other conditions in order to drive care for those conditions because drugs have been shown to significantly benefit.

Although I personally think that a plan of this type has about as much chance of passing on the federal level as a flat tax, I see lots of opportunities for employers (those that are self-insured) and benefit managers (e.g. pharmacy, physical therapy) to implement and drive better care.

Let's take an acute episode of LBP.  Perhaps if the patient chooses to go to a family practice MD, they have a $50 copay (and if imaging is involved an additional $50) but if they go to a PT who is trained in EBP they pay $5. 

What do you think?

Larry

Comments

[britt smith]

Larry,
When you couple the reimbursement with the system design, as in the Wall Street Journal article about PT first at Virginia Mason, then you have a win-win. That's what it will take to change the useage patterns in health care. Excellent,
Thanks,
Britt

[Selena Horner]

Larry,

A reimbursement scheme like that sounds reasonable, but a successful implementation process would prove to be difficult. Three areas would need to be targeted: educating the subscribers and providers, altering legislation to truly have direct access, and designing a sofware system that accurately determines the co-pay based on the ICD-9 code AND provider of care.

EBP is a buzzword. We're all EBP and every continuing education course is EBP. How would a provider trained in EBP be defined? Is it accurate to assume that those with EBP training who have proven themselves knowledgeable through an examination process will implement the evidence into practice? (Will the knowledge and the behaviors coincide?) EBP is not static - is there any guarantee that those trained in EBP in 2006 will also be trained in EBP in 2016? Those trained in EBP would hopefully be the key provider, but again, to implement that type of rigidity would also entail differing co-pays. Those trained in EBP could be $5 and those not trained in EBP could be $10. The easier route would be to drop EBP from the discussion and just have PT provider tagged to the co-pay.

Britt, the Viginia Mason story is just unbelievable. There is so much good data in there that could be analyzed to help improve the provision of services to those with low back pain. How can the findings in that hospital where control of care was just within a defined number of providers within one system be rolled out into a whole community of 3 or 4 hospitals and a few dozen family physicians? That article proved reduced costs and also appeared to indicate less chronicity - that design needs to be rolled out into communities - not just at a hospital level. It isn't all about physical therapy either - think of the patient... to have less chronicity is just awesome and benefits not only the patient but also society as a whole.

[Larry Benz]

Selena:

As usual, you raise some great points and the buzzword is certainly in full gear. Perhaps a benefit manager could use training, EBP protocals, P4P measures as a proxy for being assured that consistency in EBP is in order to get the cheaper co-pay. Our biggest enemy in PT from my perspective is in fact the "black hole" whereby payors don't know what they are paying for and the inconsistency is embarrassing.

Larry

[Selena Horner]

Benefit managers cost money.

You have somewhat of an idea though. This wouldn't be foolproof though and would be a general assumption. There is a greater likelihood that physical therapists that are APTA members would be more familiar with both current issues and potentially EBP (depends on what is being pumped out in the journal). Still no guarantee that the physical therapist DOES actually implement evidence but a potential for a greater probability that the therapist is atleast aware. So, in determining the quality of the practitioner, maybe one easy (though not accurate way) would be to provide proof annually of individual membership into the APTA. Those with valid membership would be linked to a particular co-pay scheme and maybe even a higher reimbursement scheme. My questions would still be legitimate, but the group of supposed EBP would be somewhat more homogenized.