As benefits advisors help employers struggle with the burgeoning costs of health care, cost-sharing initiatives seem to be everywhere.
But how exactly should costs be shared?
Health care benefits and co-payments historically have been distributed equally among employees. This arrangement is arguably fair. But is it effective?
Advocates of "value-based insurance design" suggest that it makes more sense to address health care costs based on the value to individual patients rather than using a "one-size-fits-all" solution. VBID is a system of cost sharing that tailors co-payments to the evidence-based value of specific services for targeted groups of patients. Currently, cost sharing is nearly always based on the expense of the service or medicine and rarely is related to its potential benefit to a patient.
The pressures created by skyrocketing health care costs make VBID very timely. The approach can help mitigate some of the downsides of cost sharing, such as the creation of barriers to critical medical services and medicines for the patients who most need them.
While everyone is anxious to address rising health care costs, no one is served if diabetics, for example, do not take their medicine or get regular eye exams because their co-payments are too high. Ignoring chronic problems when they are still treatable will likely require more expensive treatments in the future.
Benefits advisors who promote a VBID approach can encourage the use of services when the clinical benefits exceed the costs.
Bringing VBID to life
While the idea behind VBID has been around for nearly a decade, today's advances in disease management and data-sharing technology are paving the way for real-world applications.
At its simplest, a VBID program can target clinically valuable services for co-payment reduction. This approach focuses on the service, rather than targeting benefits to individual patients. Pitney Bowes, for example, currently reduces co-payments for all drugs commonly prescribed for diabetes, asthma, and coronary heart disease.
In its most advanced form, VBID considers both the patient's condition and the available treatments. A program of this type targets patients with select clinical diagnoses and lowers co-payments for specific high-value services. All treatments are considered, and those with more "value" are given a higher priority.
The municipality of Asheville, N.C., and the University of Michigan have implemented programs that reduce copayments for selected medications for employees with diabetes.
