June Newsletter: Value-Based Insurance Design

"Many private employers and insurers have successfully lowered health care costs and improved patient outcomes through value-based insurance design."

-Joe Pitts (R-PA), Chairman,

Energy and Commerce Health Subcommittee, U.S. House of Representatives

June 12, 2013

V-BID Newsletter
June 2013

June's newsletter highlights:

V-BID improves diabetes medication adherence
Seniors who hit Part D doughnut hole less likely to fill prescriptions
Misuse of medications by physicians and patients costs $200B annually
Disabled Medicare recipients with cost-related medication non-adherence more likely to visit ED
Number of employers offering CDHPs continues to grow
CDHPs can lead to lower utilization of high-value care
Benefit redesign and strong beneficiary support reduce costs for one large employer
High-priced California hospitals cut prices after CalPERS caps reimbursements
V-BID Center brief: Opportunities for V-BID in Medicare
State health policy leaders discuss V-BID use

V-BID improves diabetes medication adherence for at least three years

Incorporating V-BID and disease management into health plans improves medication adherence for diabetics more than disease management alone, according to a new analysis published in The American Journal of Pharmacy Benefits. For both brand and generic drugs, patients were more likely to adhere when cost sharing was reduced.

Medicare Part D doughnut hole associated with lower adherence

According to a new study published in the American Journal of Managed Care, when seniors hit the coverage gap in Medicare Part D, commonly known as the doughnut hole, they are less likely to fill prescriptions. The reduction was primarily in brand name drugs, and the effect was lower in essential medications such as those for heart failure.

Misuse of medications costs $200 billion annually, report finds

A report from IMS Health says that billions of dollars could be saved with the more responsible use of medications by health care professionals and patients. It cites medication adherence as the largest avoidable medication cost. The report also notes that delayed evidence-based treatment practice, the misuse of antibiotics, suboptimal use of generics, and mismanaged polypharmacy in older adults all continue to be significant issues.

Cost-related non-adherence leads to ED use for disabled Medicare beneficiaries

According to a study in the Annals of Emergency Medicine, disabled Medicare beneficiaries who report severe cost-related medication adherence problems are more likely to make at least one trip to the emergency room than either elderly or disabled beneficiaries without adherence problems.

Growing number of employers offer CDHPs

High deductible health plans coupled with a health savings account were the only type of consumer directed health plan that grew in 2012, according to a survey from the American Association of Preferred Provider Organizations. In 2012, 22 percent of all employers offered a CDHP, more than double the number that offered such a plan in 2008.

CDHPs lower use of potentially high-value care

According to a new study in Health Affairs, beneficiaries in consumer-directed health plans were less likely to see a physician or fill a prescription, but slightly more likely to use an emergency department. The study concluded: "If CDHPs succeed in getting people to make more cost-sensitive decisions, plan sponsors will have to design plans to incentivize primary care and prevention and educate members about what the plan covers."

One company saves money through benefit design and strong customer support

Kraft Foods medical spending trend dropped precipitously after implementing benefits that coupled incentives and penalties with comprehensive support through highly trained and responsive customer service representatives.

Reference pricing drives some California hospitals to drop prices

The California Public Employees' Retirement System saved $5.5 million over two years after the system instituted reference pricing for knee and hip surgery, as reported in a Los Angeles Times article. Reference pricing was introduced in 2011 and, according to a New York Times article, is being carefully tracked by employers and hospital systems around the country.

V-BID in Medicare: Opportunities to control cost without sacrificing quality

This month's V-BID Center brief focuses on the opportunities to implement V-BID in Medicare and Medicare Advantage plans. In a recent hearing of the U.S. House of Representatives Energy and Commerce Committee on Medicare, all three witnesses invoked V-BID concepts in discussing how the program should innovate.

V-BID gets attention from state health policymakers

In case you missed it, V-BID has garnered a lot of attention from state health policymakers lately. Both South Carolina and Maryland officials spoke recently about their hopes that V-BID will be incorporated into benefit plans.

The University of Michigan Center for Value-Based Insurance Design (V-BID) leads in research, development and advocacy for innovative health benefit designs.

To contact the V-BID center, email us at vbidcenter@umich.edu or call 734-615-9635

For examples of V-BID programs from across the country, visit our V-BID registry.

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