Chapter Selection:

 

centerImage

Return to Value-Based Benefit Design Introduction

Value-Based Benefit Design Getting Started

Essential Elements for Successful VBBD Implementation

Most employers start evaluating next year’s health benefits about 3-6 months prior to their new fiscal year. That’s more than enough time to choose from a menu of pre-defined options offered by your health plan(s), but it is not nearly enough time to thoroughly assess, effectively plan and wisely implement VBBD. One of the consistent messages from employers and stakeholders who have implemented VBBD in business or community settings is “take it slow” so as to avoid unintended consequences that will undermine the potential of the new approach.

Treat the process as though you are developing a newproduct: do the research; determine the design; create a prototype; road test it; fine tune it; prepare your marketing campaign; and only then, launch your new product. The following elements have been identified by VBBD innovators as the keys to success. They are a snap-shot of what to expect when designing and implementing value-based strategies for your business.

The fundamentals of successful VBBD implementation include:

  • upper management must be on board;
  • return on investment expectations must be realistic;
  • data collection and evaluation drive all decision-making;
  • demand vendor support and collaboration;
  • carefully assess VBBD strategies to determine what works best for your company and employees;
  • understand and comply with all legal requirements; and
  • effectively communicate the VBBD benefits to your employees.

1. Upper Management Must Be on Board

First, the C-Suite needs to embrace the new strategy and empower a team to implement it. This guide serves to prepare you and your work colleagues for the VBBD decision-making and implementation process. It should help arm you with the evidence you need to first sell VBBD conceptually to your company’s leadership. The literature review found in this chapter and the accompanying case studies provide both peer-reviewed research and first-hand accounts of employers’ experiences with VBBD.

Correct and thorough data interpretation at the beginning of the process will provide the evidence you need to build consensus within your company. Later on, the data analysis will also help you effectively inform employees about the new VBBD plans and programs and the rationale behind it.

Broad support at the senior level is important as turnover within companies is common. By having a cadre of support within the C-suite, you can reduce the impact of a single benefactor leaving the company.

It is also important that your company’s leadership does not expect quick results. Senior management needs to appreciate the amount of time, energy and resources it takes to implement VBBD programs and they need to have an equal amount of patience to allow the program to be up and running before drawing any conclusions.

Although many of the early adopters of VBBD were large companies, the last few years have founda number of smaller companies utilizing this design. Companies under 100 employees are creating cultures of wellness that include VBBD. While evaluating the possibilities and potentialthat VBBD may bring totheir company, one must decide whether they are looking solely for cost savings or whether they are contemplating broader outcomes such as clinicaland/or productivity improvement.Although fully- insured companies may not realize the financial improvement that self-insured companies may, these other benefits can still create savings that are of value.

It may be helpful to share “testimonials” from other CEOs. The Partnership for Prevention’s “CEOs Leading by Example” program provides perspectives from many CEOs relative to the value-based approaches they have taken. (For more information, see http://www.prevent.org/Leading-by-Example/Leading-by-Example-Participating-CEOs-and-Organizations.aspx.) In addition, the nonprofit organization Institute for Healthcare Improvement has many on-line tools to help you garner support from the C-suite. (For more information, see http://www.ihi.org/ihi.)

2. Return on Investment Expectations Must Be Realistic

Building upon the importance of getting upper management’s buy-in before pursuing VBBD, you undoubtedly are wondering about the return-on-investment (ROI)—when and how much to expect. Unfortunately, there are no easy predictions in this space because there are so many variables that come into play. Some innovators have reported ROI three to five years after their initial investment in VBBD (see Pitney Bowes’ case study for their ROI results and advice from Jack Mahoney). Some have reportedly seen return sooner. Generalizing their results and applying them to your company is not a helpful comparison because every employer is starting in a unique space and is utilizing different metrics, and implementing different approaches. What is predictable is that your health care costs will rise by 9% in 2011, following a decade where health care costs doubled.[1] Undoubtedly those trend lines and similar forecasts have led you to explore VBBD in hope that you can curb costs or even produce cost savings for your company. So let us examine what research has shown.

In 2006, the Pacific Business Group on Health and the California HealthCare Foundation retained PricewaterhouseCoopers, LLP to conduct an assessment of “quality-based benefit design” approaches to better understand if specific tactics would provide a positive short- or long-term ROI. The report based its assessment on “health services research” and “applied health benefits research,” recognizing that both are equally important from an employer’s perspective (access the report at http://www.pbgh.org/news/oubs/reports.asp.)

The comprehensive analysis found limited good evidence of positive short- or long-term ROI for two reasons: 1) ROI measurements tend to emphasize costs, which are easier to measure than “quality,” and 2) chronic conditions, a major share of health care costs, take a long time to develop—and a relatively long time to turn around. The report concluded:

“The literature search and review of the evidence confirmed that important quality-based benefit design tactics adopted by employers have not been studied or have been studied in a manner that is limited and may not clearly establish that implementation achieves the desired outcome. A significant finding was that much of the current reporting on the benefit design tactics came from the gray literature and evidence from the field.Therefore, it is necessary to understand differences between research reported in academic and health policy research community and that reported from employers, health plans, and vendors.”[2]

As related through the case studies attached to this guide, employers who have implemented VBBD strategies have found health outcome data demonstrating clinical results to be a precursor to financial indicators showing the curbing of costs or cost-savings. Improved worker productivity has also been found to be a precursor to financial indicators. Unfortunately, for many this is difficult to measure. Therefore it is important to clinically benchmark aggregate data about your employee population and establish measurable and attainable goals related to health outcomes and productivity. These leading indicators will help you mark progress before any downward movement in your overall health care costs is likely to occur.


3. Data Collection and Evaluation Drive All Decision-Making

Data is a fundamental element of VBBD. It will guide initial decision-making, plan implementation, and ongoing assessments of the VBBD upon participants’ behavior, health outcomes and related costs. Comprehensive data collection and rigorous analysis will provide a deeper understanding of the true financial cost and impact of chronic conditions on the productivity, health and health care quality for your population as well as a sense of the opportunities to create better long-term health and economic value.

Most employers probably have not seen the aggregate health care utilization data for their company, and if they did, they probably have limited tools by which to understand-- let alone analyze--what it means. Before embarking on new benefit approaches, it is important that you fully understand what is driving your health care costs and the tools at your disposal to bring positive change. To do so, you will need to engage your health care vendors in a collaborative, ongoing process to collect and assess all kinds of data. This is by far the most important and deliberative aspect of the initial implementation process (it is so important that an entire chapter of this guide has been dedicated to data management) and the on-going evaluation of your VBBD initiatives.

The data will come from many sources—including your employees who voluntarily complete a health risk appraisal (HRA) to help you understand current and future risk within your workforce population. Claims and HRA data will help you pinpoint opportunities to increase treatment adherence for chronic conditions, improve primary and secondary prevention to avoid or slow the progression of chronic conditions, and incorporate behavioral / lifestyle changes to improve overall health.

(For further details, see “Foundational Business Diagnostics” Chapter)

4. Demand Vendor Support and Collaboration

At the beginning of the project it is important to convene health vendors and other business associates that are storing needed data in order to discuss the project and create an agreed-upon data infrastructure. As their customer, it is your right to expect their full cooperation in developing and implementing VBBD. This is no easy task in that your company may have many health-related vendors who should be willing to work with you to accomplish VBBD, but they must also be willing to collaborate with other vendors to achieve your goals.

NBCH’s VBP pillars underscore the importance of health plans having measurable performance standards. This is equally true of all other health-related vendors.[3] If such performance standards do not exist for one of your current or potential vendors, you may want to further explore your options. Accountability is far too important.

5. Carefully Assess VBBD Strategies to Determine What Works Best for Your Company and Employees

In their book Leveraging Health, Dr. Jack Mahoney, Cyndy Nayer, and Dr. Jan Berger have documented the various kinds of VBBD tools, or levers, being used by employers today. The extensive list underscores the customization that is taking place, ensuring that the benefits and incentives are properly aligned to maximize the positive change in the employee population and the dividend potential for employers. Through their work, Mahoney, Nayer and Berger have categorized three general areas for improvement:

  • condition management: managing chronic and acute conditions to reduce risk;
  • provider guidance: creating designs and incentives to promote close adherence to clinical guidelines and the best clinical outcomes; and
  • individual health competency: encouraging personal responsibility through the adoption of healthy behaviors and appropriate use of health care resources.[4]

Each of the VBBD categories described below focuses on different areas within the health care continuum such as health behaviors, chronic condition management, medications, and provider choice. Each model is coupled with incentives and disincentives to encourage appropriate health-seeking behavior. Although there are incentives such as copay reductions or waivers, premium reductions, and health saving contributions, not all incentives are financial.

These are not obscure concepts, but rather practical and productive plans that have been designed by forward-thinking companies and local governments in collaboration with their employees, insurance plans and health care providers. They were designed and implemented by companies like Pitney Bowes, Procter & Gamble, and Marriott as well as the City of Asheville, North Carolina, and Polk County, Florida. These early adopters saw the effects of chronic disease on their profitability and performance and quickly realized that they needed new strategies that linked enterprise value with the value of employee health. Data from their experiences show that better value in health care is a direct result of benefits strategically designed to produce better health and financial outcomes.

No one value-based strategy is above another and many are designed to enhance the impact of one another. For example, a disease management program that lowers copays for diabetic drugs is proven to be much more effective when coupled with wellness initiatives that empower the individuals to eat healthfully, exercise regularly and give up smoking.

The initial data collection and analysis process will very much inform what type of design best meets the needs of your employees. Furthermore, each design will present advantages and challenges along the way. It is important to carefully deliberate the implications of each design choice to ensure you have the tools and resources necessary to fully implement the model.

Condition Management

The condition-specific benefit designs are established for people with a targeted chronic disease who may benefit from adherence to particular medications to treat their condition. Condition management requires a long-term approach to improved care and treatment in order to encourage adoption of healthy behaviors, decrease the costs of rescue treatments and reduce the impact of comorbidities.[5]

The initial goal is identifying the current and the near-term employees who are your highest risk, meaning they have chronic conditions which are more costly if the condition(s) are not well-managed by the individual and their providers. Secondarily, this approach also strives to identify individuals who are most at-risk for developing chronic conditions and mitigate the potential costs—health-wise and financial—of such events. For these identified populations, the VBBD must remove any barriers that stand in the way of the employees seeking and adhering to the management of their conditions. Barriers may include increasing coinsurance to unaffordable levels for low-wage employees, limiting access to physicians, or having pharmaceutical benefits riddled with preauthorization requirements. Ironically, as Jack Mahoney points out, “such barriers were imposed to reduce costs but may, in fact, be increasing costs over both the short- and long term.”[6]

This model requires less data integration and has a broad reach among employees. It may be linked to a mandatory condition management program. However, it may present challenges for some employers in that it can be more costly than a more focused approach that only targets individuals who are non-compliant or considered “under-users” of health care. It may not pay out the same level of dividend in the short term.

Another version of the VBBD condition management approach is the use of patient-focused incentives, which are based on a specific patient attribute such as employees or health plan participants at highest risk. For example, individuals who have already suffered from a heart attack and now are being treated for hyperlipidemia are a high risk for a second cardiac event. The advantage to this model is that the highest health risk individuals are also the highest financial drivers of immediate and long-term costs. Therefore, they may gain the greatest clinical and financial value from reducing barriers that impede access to appropriate health care. Furthermore, if these individuals are compliant, they are more likely to reduce emergency room visits, rescue treatments and unscheduled absences.

For this model, removal of cost barriers has an impressive ROI. To successfully implement this model, a significant amount of data and data integration is needed to accurately identify this targeted subset of people. Some employees outside of the program may view this model as discriminatory, giving preferential treatment to employees who are not managing their conditions well. These kinds of perceptions can be overcome by effectively communicating the program to all employees, underscoring that the investment in employee health actually reduces the cost of health care for the entire company and yields higher productivity among all workers.

Condition management strategies include:

  • reduced copays for diagnosis and treatment of condition;
  • incentives for participation in a disease management program focusing on chronic conditions;
  • on-site clinics for screenings, flu shots, and acute care treatment; and
  • removal of prior authorizations for certain conditions to ensure that the individual has immediate access to the drugs prescribed by their providers.

Many of the case studies provided in this guide showcase condition management programs, including Pitney Bowes, Polk County, Florida, and Marriott Corporation.

Provider Selection

In this model, reduced co-pays or coinsurance are offered to consumers who utilize preferred health care providers. The term health care provider can be broadly defined to include physicians, physician assistants, nurse practitioners, pharmacists, physician offices, urgent care clinics, and ancillary services such as imaging centers. In some instances, even medical travel and on-line coaches and physicians are being utilized.

For the first line of care, this approach drives consumers to high quality, cost-effective care centers. It is important to understand that compromising on quality out of concern for cost may be shortsighted. Generally, these preferred providers have been shown to follow accepted guidelines, have external accreditation or certification, improved safety records and/or have proven patient health outcomes all within a cost-effective framework. (However, it is important to note that many chronic conditions do not have recognized guidelines.) Provider choice incentives are oftentimes coupled with additional incentives for the provider as well as the consumer.

This design’s advantage is that it can address behavior change not only in the health care consumer but also in the providers, yielding additional positive outcomes across an entire community. Its challenge is that health care consumers may have to change their provider in order to receive the benefit, and providers must be willing to participate. Furthermore, there may be a greater reliance on and need for administrative and technological data support in order to implement this design. It will also be necessary to clarify the criteria by which a provider is designated as preferred in order to ensure that it is not simply an insurance-tiered network based only on costs but not on health outcomes.

Because this is a growing area of interest in VBBD, this guide devotes two entire chapters to physician payment reform and physician performance measurement and reporting where these approaches will be discussed in greater detail.

Individual Health Competency

This design incentivizes employees to be accountable by participating in a number of health and wellness activities that are fundamental components of total health management. Jack Mahoney believes that if employers are going to change from a culture of managing disease to one of managing health, there needs to be a consensus of shared accountability among employer, employee, and health plan/provider. He explains that it is like a three-legged stool: “if one of the legs doesn’t hold up its end of the bargain, the entire effort collapses.”[7] Although your employee must be responsible for their individual choices--healthy behaviors and use of health care resources--they do need the education and tools to support their end of the “shared accountability” stool.

Wellness tactics may include employees filling out health risk appraisals (HRA), adhering to a care plan, participating in health management programs, and undergoing immunizations and preventative chronic disease screenings. This model is fairly inexpensive to implement compared to other approaches and can easily be applied across a broad population.

IBM has taken a slightly different approach. Predicated on the results of studies that show paying cash incentives is an important part of making corporate wellness effective, the company runs a health living rebate program which offers employees five different $150 cash incentives for improving their lifestyle.[8]

6. Understand and Comply With All Legal Requirements

As you move forward with VBBD, it is critical that your company comply with all legal requirements, particularly those related to privacy and nondiscrimination. Three laws in particular govern this space: 1) the Americans with Disability Act (ADA), 2) the Health Insurance Portability and Accountability Act (HIPAA), and 3) the Genetic Information Nondiscrimination Act (GINA). The information below is intended as an introductory overview and checklist to help guide you through benefit design and implementation. It is not intended as nor is it a substitute for legal advice. We cannot stress enough the importance of consulting with your attorney or legal team.

Privacy is one of the most important and challenging facets to successful value-based benefit design. In addition to the legal requirements, both federal and state, the issue is of paramount importance to your employees or beneficiaries. In an era of financial and medical identity theft, people are justifiably interested in assuring that their personal information is protected. In addition, people have fears of their medical information impacting their employment if employers or coworkers were to learn of it, regardless of whether such use of the information is prohibited by law.

Furthermore, with respect to the implementation of wellness programs, there are many intersecting and seemingly conflicting legal jurisdictions, which have not been definitively laid out in federal regulation. The Equal Employment Opportunity Commission (EEOC) would be the ultimate arbitrator in situations where employers are perceived to be violating the employer provisions of these laws. However, EEOC has yet to issue a clarifying formal opinion on the laws’ interplay, which had been promised by mid-2010. (For more information, see Legal Requirements)

7. Effectively Communicate the VBBD Benefit to Your Employees

In their book, Total Value/Total Return: Seven Rules for Optimizing Employee Health Benefits for a Healthier and More Productive Workforce, Dr. Jack Mahoney and David Hom share the lessons they learned implementing value-based strategies for Pitney Bowes. They relate the story of an employee who retired after many years with the company. Within months of retirement—a time he should have been enjoying with his wife, children and grandchildren—he had a massive heart attack and died. “This man was too young and too nice to die,” Mahoney and Hom recall. Their next thought was, “why hadn’t his condition been prevented or treated earlier?” Unfortunately, he had not been seeing his doctor regularly and had not been adhering to heart medications or a healthy lifestyle. Mahoney and Hom conclude, “that was a defining moment for us. We realized among other things, that our health management initiatives needed a stronger emphasis on the individual.”[9]

This hard-learned lesson underscores not only the role of personal responsibility in managing one’s health, but also the importance of effective communication. An employer’s efforts and investment to implement value-based strategies for employees and their dependents are lost if the individual does not understand the benefit and act by routinely seeing health care providers, adhering to treatment regimens for diagnosed conditions, and adopting healthy behaviors.

Essential to the success of the new benefit design is the ability to clearly and effectively communicate its value to employees and plan participants. You may even find yourself having to reinforce your priorities with vendors who may not be well-versed on value-based benefit designs or who may try to steer you toward more cookie-cutter approaches for your workforce’s health care benefits.

Mapping out a communication plan should not be considered an after-thought in the implementation phase as it is a strategic element that will maximize the benefit for both the employees and the employer. Therefore, begin creating a communication plan and a timeline well in advance of the new benefit to ensure that the outreach is thorough and the messages and information resonate with all employees.

Most people are not compelled to truly understand their health benefits until they are in a position to actually need them. Value-based benefit designs reward people for taking proactive steps with their health. Therefore, consider communication tools and venues as opportunities to educate and motivate employees to engage in constructive use of their benefits and adopt healthy lifestyle changes that will further enhance all facets of their lives. Relate the information in a personalized manner that connects the individual to the new program and motivates them to participate.

A targeted benefit will not be provided to each and every plan participant. Nevertheless, it will be necessary to communicate with all employees—even those not receiving the benefit—so that no one believes that some employees are receiving preferential treatment. Underscore this is “value-added” for everyone: everyone benefits by reducing absenteeism and presenteeism, increasing worker productivity and satisfaction, and curbing health care costs overall. These types of strategies keep employee benefits sustainable and companies viable.

Know Your Employee Audience

As our health care system becomes more technologically and scientifically sophisticated, it is becoming increasingly difficult to be a truly informed consumer. Research shows that people who are better informed about their options and who understand the rationale behind certain approaches to health care may have better health outcomes. Those without adequate understanding cannot function successfully in a market designed for pro-active, well-informed consumers.[10]

An effective communication plan begins with a firm understanding of the audience intended to receive it. Take time to understand the challenges and the opportunities that may exist with your employee population. Survey your employees to determine how they prefer to receive information about their health benefits, keeping in mind that you may have to rely on several forms of repeated communication to fully reach your targeted audience.

Choose your words carefully when sharing information about the benefit. Prepare glossaries that fully explain key terms and are free of confusing jargon or acronyms. (See the Glossary section on this website for key terms and definitions to incorporate into to your company’s communication and outreach materials.) Consider that about 20% of the U.S. population is functionally illiterate.[11] Medical literacy, which includes the ability to understand prescription drug instructions, appointment slips, patient brochures, doctors’ directions and consent forms as well as the ability to navigate health systems, lags even further. Approximately 40% of American patients cannot comprehend directions for taking medication on an empty stomach.[12] These statistics underscore the importance of not over-estimating the comprehension level of your employees and, as a result, undermining the success of the new benefit even before it goes into effect.

It may be necessary to conduct communication in several languages, requiring a thorough understanding of cultural connotations and barriers that may lead to a misinterpretation of your intended message. Enlisting the help of staff members familiar with these cultural and linguistic distinctions will ensure your message is properly communicated and received.

Covered employees are not the only audience. Consider how best to convey information to family members also covered by the benefit. Their full engagement in the benefit will also contribute to the success of the overall program.

Employees who do not have the chronic conditions targeted in the value-based design will need to appreciate how it benefits them as well. Help them understand that while they are not benefiting health-wise from the program, the engagement of those with the conditions is not preferential treatment, but another way for the company to minimize risk, increase productivity and control health care costs for everyone.

Who Should Communicate the Benefit – A Trusted Source

The messenger is as important as the message. People are more likely to hear and act on information shared by a trusted source. When conveying the value of benefit design approaches in health care, utilize health care professionals such as nurses, physicians and pharmacists to help explain it. If and when providers are selected to be part of the health care support team, they should make a point to visit work sites to better understand the work environment in which employees operate. It will help the professionals better understand the employee’s perspective and build a comfort level between them. Back the team’s expertise with secondary information such as links or brochures from credible health care institutions located in your area and nationwide. Choose such information carefully to ensure the information is easy to understand and geared to a patient audience.

Employees may have an inherent suspicion that anything coming from management cannot be good or truly in the best interest of the worker. Be aware of this as you choose “employee champions” who can help deflect negativity and dispel misgivings. If possible, recruit well-respected employees to be part of the communication team. These are not necessarily the leaders or company management; they’re people to whom others are drawn informally. They are individuals who help shape their peers’ work morale.

What to Communicate

  • Privacy. Reassure workers that their privacy is being maintained. Print it and say it continually in the information you share. Let employees know that they have privacy rights under federal law that protect their health information. Tell them they have the opportunity to opt out of the program and that federal law limits the use of personally identifiable health information. It is important for employees to know that in the establishment of the new health benefit, all privacy laws were followed and will continue to be upheld not only by the employer, but also by the doctors, nurses, pharmacists, hospitals, clinics, insurance companies and pharmacies helping to implement the program. All health care providers are required by federal law to present employees/patients with an explanation of their privacy practices. Health information cannot be given to employers and use of personally identifiable health information for marketing is strictly limited and generally requires the employee’s prior authorization.
  • Value. Explain the rationale for the new benefit and why, as their employer, you want them to utilize their health benefits. Health of the individual reflects the health of the company: healthy employees mean lower health care costs for everyone, a more productive workforce with less absenteeism and presenteeism, and a sustainable business model for the company to be more competitive overall.
  • Personalize the benefit. Personalized benefits opportunity statements are a great way to relate the benefit message. These can be particularly helpful to introduce programs with value-based design approaches because they help the employee or plan member understand how it affects them personally. Content should include: 1) the services or drugs that they have or should have received in the past; 2) what the associated costs were in the past; 3) what the costs will be under the new model; and 4) how to take action within the new plan.
  • Use examples. If personalized benefit opportunity statements are not possible, personalization can also occur by using examples that best mirror the targeted population. Examples should include both genders, various ages and ethnicities, and the targeted chronic conditions.
  • Value-based plan features. Not all benefits are created equal in a value-based plan. Most individuals equate higher quality with higher costs. This issue will need to be explained. The Midwest Business Group on Health suggests that employers strive to reframe employees’ perceptions of the health care marketplace: higher quality can equal lower cost.[13]
  • Health information. Despite public awareness campaigns and increased health-related media coverage—particularly during the reform debate—don’t assume that your employees and dependents understand the connection between leading chronic diseases such as diabetes, hypertension, asthma and depression and modifiable lifestyle behaviors. Furthermore, nutritional and appropriate daily caloric needs are not well understood, making it difficult for the vast majority of Americans to make proper dietary choices. Your vendors should be able to assist you in this aspect of communication. In addition, the Centers for Disease Control and Prevention and the National Institutes of Health have a lot of reliable information on their respective websites. They are trusted, scientifically-based government sources.
  • Medical adherence. According to the World Health Organization, in developed countries, adherence to treatment for chronic conditions only occurs half of the time (50%).[14] What a different health care landscape could be created if more people with chronic conditions followed their doctor’s orders! Reinforce the importance of adhering to the prescribed treatment regimen and how it leads to better health outcomes, fewer catastrophic health events and lower costs for everyone.
  • Take action. Simplify and streamline the process for individuals to enroll in the benefit.

How to Communicate

The communications strategy you and your colleagues implement should encompass many different forms of communication—all of which are chances to educate and encourage employees to sign up for the new benefit. However, to the extent possible, a thorough explanation of the plan should be conducted in-person so employees and health plan participants have an opportunity to ask questions. Even the most well-prepared information may not be understood or interpreted correctly. Such meetings are a great opportunity to clarify points and fine-tune related communications in the future.

Every person learns and takes in information differently. Therefore, it is important to integrate the in-person communication with letters, personalized benefits opportunity statements, posters, email, videos and testimonials from colleagues enrolled in the program. Include information in payroll stuffers and employee handbooks. Studies have shown that multi-touch and multi-modal communication tends to be the most effective.

Company “competitions” or team challenges for exercise or weight management may also heighten enrollment in the new benefit and inspire camaraderie among workers. Colleagues can be a good source of both peer pressure and encouragement.

Conclusion

Employers are responding to many different and oftentimes competing forces as they assess their health benefit offerings. VBBD is empowering employers to expect and attain higher value and more customization of benefits and supporting programs to better meet the needs of their employee populations and stem the tide of increasing health care costs.

Despite limited academic research, many VBBD innovators have shared their experiences with business coalitions and peers in order to define the essential procedures, data elements and benchmarks necessary for gauging success—both in clinical and financial outcomes.

VBBD does not provide a quick solution, resulting in immediate ROI. However, VBBD when thoughtfully implemented will prove to be a set of valuable tools that helps your company minimize risk, increase productivity, and improve the overall health of your workforce.

Additional Resources

1. The University of Michigan Center for Value-Based Insurance Design was established in 2005 to develop, evaluate, and promote value-based insurance initiatives in order to ensure efficient expenditure of health care dollars and maximize benefits of care. The Center is the first academic venue in which faculty with both clinical and economic expertise conduct empirical research to determine the health and economic impact of innovative benefit designs. The Center is co-directed by Dean Smith, Ph.D. and Dr. A. Mark Fendrick. Michael E. Chernew, Ph.D. serves as a consultant.

Available on-line at http://www.sph.umich.edu/vbidcenter/index.html

2. The Center for Health Value Innovation brings together a community of employers and payers building evidence, tools and competency in value-based design for improved health and reduced cost trends. The Center was founded by five equal partners and is now headed by Cyndy Nayer, President and Chief Executive Officer.

Available on-line at http://www.vbhealth.org

3. The Texas Business Group on Health's Compendium of Best Practices in Value-Based Benefits presents stories of seven pace-setting Texas employers who are taking a value-based approach to benefits design and achieving better health outcomes for every healthcare dollar they spend.  Individually and together, these companies are improving the health of their 
workers, their organizations, and their communities. More information about the Compendium is available at http://tbgh.org/compendium.htm



 

[1] PriceWaterhouseCoopers, “Behind the Numbers: Medical Cost Trends 2011,” June 2010;4. http://www.pwc.com/us/en/health-industries/publications/behind-the-numbers-medical-cost-trends-2011.jhtml

[2] Hunt S, Maerki S, Rosenberg W, “Assessing Quality-Based Benefit Design,” prepared for the California HealthCare Foundation and Pacific Business Group on Health, April 2006, p. 7, http://www.pbgh.org/news/oubs/reports.asp.

[3] Houy M, “Value-Based Benefit Design: A Purchaser Guide,” National Business Coalition on Health. January 2009;11, http://www.nbch.org/Library.

[4] Nayer C, Mahoney J, Berger J, Leveraging Health. 2009;54.

[5] Ibid, 55.

[6] Mahoney J and Hom D, Total Value Total Return: Seven Rules for Optimizing Employee Health Benefits for a Healthier and More Productive Workforce, Philadelphia: GlaxoSmithKline Group of Companies. 2006;46.

[7] Ibid, 64.

[8] Scott M, “IBM’s Plan to Save By Upping Workers’ Health Care Could Inspire Copycats,” Daily Finance. November 3, 2009. http://www.dailyfinance.com/story/company-news/ibms-plan-to-save-by-paying-for-workers-health-care-could-insp/19216386/.

[9] Mahoney J and Hom D, Total Value Total Return: Seven Rules for Optimizing Employee Health Benefits for a Healthier and More Productive Workforce, Philadelphia: GlaxoSmithKline Group of Companies, 2006, 35.

[10] Parker RM, Ratzan SC, and Lurie N, “Health Literacy: A Policy Challenge For Advancing High-Quality Health Care,” Health Affairs. July/August 2003;22(4):147. http://content.healthaffairs.org/cgi/content/full/22/4/147.

[11] The Informatics Review, “Comprehension and Reading Level,” http://www.informatics-review.com/FAQ/reading.html.

[12] Ibid.

[13] Midwest Business Group on Health, “Focus Group Research: Employees’ Readiness to Adopt Value-Based Benefit Design Strategies.” November 2008;19. http://www.mbgh.org/templates/UserFiles/Files/2008/Readiness%20to%20Change/VBBDFindings_white%20paper_Nov_2008.pdf.

[14] The World Health Organization, “Adherence to Long-Term Therapies: Evidence for Action,” 2003;11. http://www.who.int/chp/knowledge/publications/adherence_report/en/.


 Copyright © 2011
 National Business Coalition on Health.
 All Rights Reserved. Disclaimer.


 
The act of an employee’s physical absence from the workplace, often in a frequent or chronic pattern (and may be the due to an underlying health condition).
The act of an employee’s physical absence from the workplace, often in a frequent or chronic pattern (and may be the due to an underlying health condition).
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A chronic condition is a disease that has one or more of the following characteristics: (1) Is permanent; (2) Is progressive if unmanaged; (3) Is caused by nonreversible pathological alteration; (4) Requires special training of the patient for rehabilitation, self-monitoring, and self-management; or (5) May require a long period of supervision, observation, or care.
A system of coordinated health care interventions and communications for populations with conditions in which patient self-care efforts are significant. Physicians must be consistent with clinical guidelines and patients must monitor their own health and follow directions from clinicians.
A system of coordinated health care interventions and communications for populations with conditions in which patient self-care efforts are significant. Physicians must be consistent with clinical guidelines and patients must monitor their own health and follow directions from clinicians.
The extent to which care delivered by a physician conforms to evidence-based guidelines, based on their adherence to evidence-based guidelines and/or the health of the patient population they manage.
Financial cost, usually shared between an employer and an insured person, of obtaining health insurance coverage, paid as a lump sum or in monthly installments.
Health care services that are aimed at preventing complications of existing diseases, or preventing the occurrence of a disease. Recommended services may vary by age and gender. Examples of preventive services include physical exams, immunizations and certain cancer screenings.
Health care services that are aimed at preventing complications of existing diseases, or preventing the occurrence of a disease. Recommended services may vary by age and gender. Examples of preventive services include physical exams, immunizations and certain cancer screenings.
Value Based Benefit Design is the explicit use of plan incentives to encourage enrollee adoption of one or more of the following: 1) appropriate use of high value services, including certain prescription drugs and preventive services; 2) adoption of healthy lifestyles, such as smoking cessation or increased physical activity; 3) use of high performance providers who adhere to evidence-based treatment guidelines. Value-Based Benefit Design is distinguished from Value-Based Insurance Design in that it extends beyond the realm of insurance to include incentive-based programming such as wellness services.
Value Based Benefit Design is the explicit use of plan incentives to encourage enrollee adoption of one or more of the following: 1) appropriate use of high value services, including certain prescription drugs and preventive services; 2) adoption of healthy lifestyles, such as smoking cessation or increased physical activity; 3) use of high performance providers who adhere to evidence-based treatment guidelines. Value-Based Benefit Design is distinguished from Value-Based Insurance Design in that it extends beyond the realm of insurance to include incentive-based programming such as wellness services.
Value-based insurance design bases an individual's out-of-pocket costs according to the value of a medical service or product for a specific patient population. Although cost-sharing still occurs in this design, it is used to encourage use of the clinical intervention, mitigating adverse health consequences that may lead to even higher cost interventions. The value of the clinical intervention will vary across patient groups and their demographic differences and therefore be subject to different cost-sharing levels.
Login
space