Outcomes-Based Contracting^tm: The Value-Based Framework for Optimal Accountability

Wisconsin–the state best identified with cheese, high taxes, the Green Bay Packers and beer–is also known for health care, creating diverse collaborative health care systems and well-established prevention programs. But it is also plagued by high costs and expenses.  Despite Wisconsin’s health care woes–it ranked as the 16th state with the highest health spending per capita in 2004 (the most recent year for which comparative state-level data are available), it is a state primed for reform, a path it has been pursuing throughout the past decade. Employers, health plans and county governments all share in the journey towards cost-effective, high-quality, accessible health care.

This report, Wisconsin: Levers Drive Value-Based Innovation Across the State, makes a business case for value-based design as illustrated by Wisconsin companies Quad/Graphics [QuadMed], Humana, Journal Communications and Chippewa County. The four organizations are a representative sample of how innovation is providing resolution and relief in Wisconsin and how the state culture has contributed to the success of their solutions. The report is built on the Health Value Continuum, a development pathway for value-based design that shows the route to quality health improvement and behavior change. The Health Value Continuum was developed by the Center for Health Value Innovation to detail the experiences and path of early innovators in value-based benefit design. The four organizations highlighted in this paper (QuadMed, Humana, Journal Communications and Chippewa County, WI) have each reached different points along the Continuum as they move toward optimal health.

“We think Wisconsin is a truly unique learning laboratory,” says Cyndy Nayer, president and chief executive officer of the Center for Health Value Innovation.  “Wisconsin has demonstrated a willingness to innovate, share, and do more. We want to learn about and share the experience of these Wisconsin companies by cataloguing the levers–or incentives–currently in place, the metrics used to measure outcomes, and how statewide efforts can be replicated in the marketplace. These companies are all members of the Center, and our mission is to provide evidence of improved health value so that other companies can improve the value of their health care spend.”

For the complete report in PDF format, please click here.

Understanding that things had to change if employers were to be able to continue to afford health care, a few forward thinking payers and influencers began to rethink their health care strategies. Two health care pilots began to take hold. One involved refocusing employees on the virtues of health and wellness. The other focused on decreasing the financial barriers to some of the care that would actually put healthier people back to work because they were compliant with their treatments.

These experiments that utilized reductions in co-pays for some populations continued to broaden with the inclusion of incentives for participation in annual or baseline health risk assessments, health fairs, and disease management. So began the development of behavior change through incentives that actively engage consumers to participate in their health and healthcare. The use of these incentives have evolved into the levers of population change that form the core of value-based design initiatives.

Learning Objectives:

Understand the nature of value-based design and the challenges it is designed to resolve.

Be conversant with the 4 Ds of value-based design . . data, design, delivery and dividends.

Know why health promotion is a foundational element of value-based design.

Learn the key skills and competencies that health promotion practitioners bring to successful implementation of value-based design.

Cyndy Nayer and John Riedel, Leveraging Health: A Primer for Health Promotion Practitioners using Value-Based Designs from Michaela Conley, HPCareer.Net on Vimeo.  Learn more about HPCareer.net here!

SeeChange Health – The New Value-Based Health Insurer Aligns Benefits with Preventive Care and Chronic Condition Management

San Francisco, CA–March 22, 2010 – SeeChange Health today launched the first new value-based health insurance company in California, offering personalized, value-based health plans that provide incentives to encourage individuals to play an active role in their health management and improve their quality of life. As the first value-based health insurance company to launch in the United States, SeeChange Health brings affordable, next-generation insurance designs to the employer group market. The plan will be available initially in Fresno, California, but the company plans to expand their offering to Los Angeles, San Diego, Bakersfield, Monterey, Sacramento and San Francisco in the coming months.

Value-based health care encourages individuals to access preventive care, which will identify looming health problems before they become serious – and expensive. Participants who complete a health questionnaire along with age and gender specific preventive examinations, including cancer screenings and basic lab tests, are rewarded with enhanced benefits such as reduced coinsurance and deductibles along with cash rewards.

Unlike typical health insurance companies, SeeChange Health designed its benefit plans to encourage individuals to see their doctor. SeeChange Health covers preventive examinations, including cancer screenings and associated lab tests, at 100 percent.

“We are thrilled to partner with a health plan that rewards its members for building and maintaining a relationship with their doctor,” said Dr. Daniel Bluestone, Chief Medical Officer of Santé Community Physicians. “SeeChange Health promotes healthy behaviors, which will ultimately reduce chronic illnesses and help people live fuller, healthier lives.”

In addition to providing enhanced benefits for completing preventive examinations and related screenings, SeeChange rewards its members with financial incentives for completing health actions necessary for proactively managing chronic conditions, such as diabetes, asthma and coronary artery disease.

“When SeeChange approached us with its groundbreaking solution, we eagerly embraced the only health plan to completely align its benefits with preventive care and chronic condition management,” said Cyndy Nayer, President of the Center for Health Value Innovation, the nation’s premier information exchange for value-based design.

“The reaction and feedback we are receiving from employers is overwhelmingly positive,” said Chuck Trogdon, CEO of Renberg, Trogdon, & Cavale Insurance Services. “Employers are clamoring for affordable health plans with benefits designed to support individual efforts for staying healthy. This approach drives down health plan costs and promotes a healthier workforce.”

Why the initial focus on California? One out of seven residents are uninsured and the number is growing. In the coming months, SeeChange will expand their health insurance offerings throughout California and into twenty-four states where they are licensed to sell value-based health insurance.

“While the nation debates the merits of a national health care plan, the elephant in the room is who is going to pay for it,” said Martin Watson, CEO of SeeChange Health. “With our new plan, we are effectively showing that you can lower health care costs and improve the quality of care while you’re doing it.”

About SeeChange Health

SeeChange Health provides fully-insured, value-based health insurance to employer groups. The company combines value-based benefit designs, data analytics and an interactive personal health record to consistently improve the health profile of individuals. Preventive health actions are assigned and tracked at an individual level. Individuals with disease states such as pre-diabetes, diabetes, asthma and heart disease receive specific health actions based on their medical condition. SeeChange Health is headquartered in San Francisco and is focused on reducing health care costs through proactive health management and early detection of health conditions.

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PRSeeChangeLaunchMarch22-2010

As the country approaches the end of a year of promised reform that would deliver more health care, bend the trend on costs, and get more uninsured people into the system, weariness and wariness have taken root. The focus has moved from “bending the trend” to insurance reform, but the plan sponsors—most often employers of many sizes and sectors—have a job to do, and they need health and productive employees to do it.

Value-Based Designs Deliver Dividends—But Overcoming Non-Adherence Is Key
Adherence indicators may well be part of the “holy grail” for beneconomic outcomes. Using a suite of levers, defined as insurance design, incentives and disincentives, the benefits and compensation decision-maker has the power to influence behavior change for desired results. But the arbitrary implementation of iconic models of value-based designs, using these levers to  remove cost and access barriers for certain populations, is not without consequences.  Value-based designs do work, influencing patient and consumer behaviors in  prevention/wellness, chronic care management, and choice of care delivery.

Read more.  Nayer, Mahoney J Comp Ben Behavior Change and VBBD JCBv26#1 copyright

“Reprinted from Journal of Compensation and Benefits. Copyright © 2010 Thomson Reuters/West.

For more information about this publication please visit www.west.thomson.com

Read more of the primer by clicking here.

AHP HPP primer 3.2010

FOR IMMEDIATE RELEASE

TriZetto Joins Center for Health Value Innovation, Signals Role of Healthcare Information Technology in Accelerating Adoption of Value-Based Solutions

ST. LOUIS, Mo./NEWPORT BEACH, Calif. – March 01, 2010 – The Center for Health Value Innovation (www.vbhealth.org), the nation’s premier information exchange for value-based design, today announced that The TriZetto Group, Inc. (www.trizetto.com) has joined its growing membership of healthcare industry innovators.  This collaboration is expected to accelerate the development of new value-based strategies, which many industry analysts and leaders believe are vital to healthcare reform.

“TriZetto will share its knowledge to demonstrate how technology can be used to promote the adoption of value-based designs, and our value-based solutions will incorporate the ideas and principles of the Center,” said Jeff Rideout, M.D., chief medical officer and senior vice president of cost and quality at TriZetto. “As a leader in healthcare payer technology, TriZetto recognizes the potential of value-based designs for healthcare reform and will assist the Center in evaluating value-based strategies, developing critical analytics and leveraging technology to refine programs and measure outcomes.”

The introduction of “levers” of value-based design incentives is now recognized as one of the most effective approaches to encourage individuals to adopt healthier lifestyles and effectively manage chronic conditions by adhering to recognized healthcare guidelines. In its recently released book, Leveraging Health (2009), authors from the Center articulate the role of value-based solutions to enhance workplace health and productivity and promote financial sustainability for organizations.

Gail Knopf, vice president of enterprise strategy at TriZetto, added, “This collaboration presents both TriZetto and the Center with significant opportunities to leverage the latest innovations and best practices to help unlock the potential of value-based designs.  Together, we plan to develop value-based strategies that improve member health, successfully address healthcare economic inflation and drive Integrated Healthcare Management (IHM) and its subset, Systematic Health Management (SHM).”

TriZetto’s industry vision, IHM is the systematic application of processes, shared information and aligned incentives to optimize the coordination of benefits and care for the healthcare consumer. TriZetto’s IHM vision encompasses three areas for payers: administrative costs, supply-driven costs and demand-driven costs. TriZetto has become well recognized for its administrative solutions that increase efficiency for payers and their employer customers and members. TriZetto’s new SHM process focuses on the supply and demand drivers to address clinical cost and quality challenges that primarily manifest themselves in unwarranted variations in care, which create significant waste.

Cyndy Nayer, president and CEO of the Center, said, “With the recent introduction of its Value-Based Benefits Solution, TriZetto demonstrates a serious commitment to developing technology to administer value-based benefits on an individual level and integrate the process in real-time with claims processing. We are grateful to TriZetto for sharing its talent, expertise and technical experience, and look forward to working closely with its leadership.”

About The Center for Health Value Innovation
Information Exchange for Value-Based Design
The Center for Health Value Innovation has grown into the nation’s premier organization dedicated to sharing the evidence of improved health and economic outcomes through value-based designs for sustainable health and financial improvement.
www.vbhealth.org

About TriZetto
Founded in 1997, TriZetto is the leading privately held healthcare information technology company to the healthcare payer industry. With its technology touching half of the U.S. insured population, TriZetto is Powering Integrated Healthcare Management®, the systematic application of processes and shared information to optimize the coordination of benefits and care for the healthcare consumer. The company’s offerings include enterprise and component software, hosting, outsourcing services and consulting that help payers implement and optimize their operations and minimize the risk of bringing to market new products that drive competitive differentiation.

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TriZetto Joins Center for Health Value Innovation, Signals Role of Healthcare Information Technology in Accelerating Adoption of Value-Based Solutions | Business Wire

The Value of Dividends in Health: A Call to Align Stakeholders
Cyndy Nayer, MA
Center for Health Value Innovation, St. Louis, Missouri

ABSTRACT
Objective: The purpose of this paper is to describe the philosophy and utility of value-based designs (VBDs), with an eye toward defining a pathway for a shift to VBDs acros US businesses involved in the health care discussion.

You can read more by clicking here.   Clinical Therapeutics Value of Dividends-Nayer Drug Ben

The Value of Health in Health Reform

by Cyndy Nayer

Health care reform is the topic of every conversation, it seems, and many of these conversations are quite impassioned.

You can read more by clicking here.  Trends Nayer-Health in Healthcare Reform

Interview with Cyndy Nayer from the Center for Health Value Innovation

January 22, 2010

Posted by George Van Antwerp in Blogroll, Books / Articles, Healthcare, Innovation, Leadership, Managed Care, Marketing / Communications, Methodology, PBM / Pharmacy, Research, Silverlink, Value Propositions.
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I had a chance yesterday to sit down and talk with Cyndy Nayer (President, CEO, and co-founder) from the Center For Health Value Innovation. For some of you, this is a new buzzword for others it has been around a while. I remember back in the early 2000s when stories of Pitney Bowes kept popping up and then working with a few of our clients (like Marriott) when I was at Express Scripts on what were being called “value-based designs”. [I even had an offer to go to ActiveHealth (now part of Aetna) and work on their Value Based offerings several years ago.]

And, it’s a small world. Several people from my past are involved: (1) Peter Hayes was a client at Express Scripts and (2) Roy Lamphier played soccer with me in high school.

What is the Center For Health Value Innovation?

The center is an “information exchange” for value based design which as she points out is much more than just a prescription benefit and not simply giving people free drugs to make them more compliant. [If only it were that easy!]

What do you mean by Information Exchange?

A place where people can share stories, trends, info, and research. They see their job as getting information out there and providing support around modeling, analysis, and identifying gaps. [And, I know they do a lot of education as you can see Cyndy at many conferences.] She talked about educating the marketplace on an “actionable format” for implementing value-based design.

Can you describe Value Based Design?

Value Based Design is a suite of insurance design, incentives, and disincentives that support prevention and wellness, chronic care management, and care delivery. It is focused on linking stakeholders across the care continuum and developing structures like outcomes-based contracting where all stakeholders benefit from better health outcomes.

She mentioned that in an upcoming edition of the Journal of Benefits and Compensation that there will be a paper that builds on some adherence concepts to discuss the 5 Cs of Value Based Design: [Noting that the first 3 come from some work from Merck.]

• Commitment
• Concern
• Cost
• Communication
• Community

We talked about the need for communications to be multi-directional and include the patient, the physician, the pharmacy, and other caregivers. We talked about community needing to expand on that to include family, the employer, and other entities. [As we all know, health care is local and value based design is no different.]

We spent a little time here talking about community, and the need for this to happen at a community level. [Much like e-prescribing and other things have found out that localized momentum is important.] One question in my mind is who is the catalyst – the hospitals, the physicians, the local managed care companies, employers, grocery stores, wellness companies, pharmacies.

We talked about the fact that this isn’t the same as Accountable Care Organizations, but like that concept, this has to be developed as part of the fabric of the community not imposed on the community.

Being from Detroit, I asked if this was a model for them to help develop around. That is an area of focus and there has been some work done in the Battle Creek, Michigan area.

Why are employers so interested in Value Based Design?

Originally, employers were interested since it was something new, but the recession forced them to look at this more seriously. But, this is a long-term process and something which they benefit from. Better health lowers absenteeism, and businesses need health communities and healthy workers for growth.

Why don’t companies implement Value Based Design programs?

Companies don’t implement them because they’re not prepared for the amount of work needed to get started and it’s not a cheap fix. [If you want to save money, just drop the benefits…not that anyone really advocates that.] We talked about that lots of people react to the urban legends of just giving out free drugs [which isn't Value Based Design] which would be easy. Companies need to realize there is work to be done to communicate this, design it, and manage the implementation across the community. BUT, once it’s installed, it’s completely sustainable.

Is there a certification (i.e., URAC) for value-based design?

She told me that nothing exists today and that it would be hard to do. Today, there isn’t alignment in the marketplace around incentives and a standard model. They spend a lot of time working with different groups to drive education and training to link health and productivity measurement with value and functional performance.

What’s next for 2010?

In 2010, they will be bringing much more information forward on how to support and extend the work done in the 1^st book (Leveraging Health…which Dr. Jan Berger, Silverlink’s Chief Medical Officer co-authored with the Center) and the decision matrix that they recently published. They will continue to serve more as a guide helping interested parties in private, invitation only events to design solutions and then bring those solutions to market.

You can learn more about George and his work at this site:  Enabling Healthy Decisions

February 2, 2010 was our third birthday, and what a celebration was had!  We’ll be updating this post and adding more, but here are a few highlights for you:

JOHN J. MAHONEY MD AWARD for community health innovation was announced.  Polishing Jack’s star is hardly necessary, yet we created this award to expand the concepts and innovations in value-based benefit design that has made Jack the icon that he is.  For those who don’t know, Jack is a co-founder of the Center, serves as our Chief Medical Officer, and still spends a great deal of his time at Pitney Bowes and the Florida Business Health Coalition.  Pitney is where Jack created the first value-based benefit design–but what most don’t know is that it was focused on behavioral health  Rosenheck, Yale Pitney Bowes study EAP A surprise to Jack, this award is an innovator’s dream:  a Pay-it-Forward award.  Initial funding came through an educational grant from Johnson and Johnson Health Care Services, then the Center matched the funds.  Now, multi-stakeholder collaboratives within a community can apply for the $40,000 award and the Center will provide oversight, training, and suggest innovative technology that will fuel value-based benefit designs.  BUT THERE IS MORE:  The community that wins the award must contribute $40,000 into the award “pot” so that the next community that applies will get the same oversight, etc., as the first–that’s the cool Pay-It-Forward concept, and it’s just how Jack works!  He shares openly on his learnings, his experiences, and his challenges.  For more on the award, Mahoney Award App FINAL Dr. Cathy Baase of Dow, medical director for Dow, a member of our Board and an expert in community health improvement, will chair the judging committee–all applications must be received electronically at the Center no later than May 31, 2010.

Michael Taylor MD (Chairman of our Board) and Wayne Burton MD (new Strategic Advisor and Master of Ceremonies for the Award announcement) were nothing short of stellar at the Board Meeting.  You know Dr. Burton as the former Medical Director of JPMorgan Chase (and, before that, BankOne) and the research guru of Health and Productivity Management.  Mike, of course, is the Medical Director for Health Promotion for Caterpillar.  Over 80 people attended our Celebration and we inducted new members into the Fellows of the Center as well (more to follow later). Other luminaries included not only our Board of Directors, but also Mike Critelli (former CEO of Pitney Bowes and now the Chair of Dossia and the Dossia Foundation), Tom Parry (President of the Integrated Benefits Institute), Ron Loeppke MD (Chair of IBI, head of ACOEM’s HPM subgroup, and, now the President of US Preventive Medicine), Andy Webber (President of the National Business Coalition on Health), Tracey Moorhead and Jeanette May of DMAA: the Care Continuum Alliance (Tracey is President and Jeanette is VP of Research), Judy Cahill (Executive Director of AMCP), Sally Greenberg (Executive Director of National Consumer League) and Dr. Joycelyn Elders, former US Surgeon General and now a mainstay in our board meetings–she provides the inspiration close to the hard work we are all doing together.

Finally, at the Annual Meeting we launched the brand new survey that we commissioned from Buck Consultants (Michael Jacobs, National Practice Leader for Buck, is now on our Board of Directors).  Our goal was to survey experienced companies for their view of value-based benefit designs.  Key learnings:  87% use the VBD approach for prevention and wellness, 60% for chronic care management, and 26% for guidance in care delivery.  Most important learnings:  engage the employees faster AND make sure to engage the physicians/pharmacists/clinicians sooner.  CHVI-BUCK VBD 2009 FINAL- Report

We’ll be posting more here, but, as I head off to the IBI-NBCH meeting in San Antonio, I was determined to get the highlights up so you could all share!  Stay tuned, there is SO much more that we’re doing.

Be well,

Cyndy