Center for Health Value Innovation">Center for Health Value Innovation

With 176 respondents to the Value Based Design (VBD) 2010 Survey, the data collected and presented in the following pages is truly enlightening and supportive of VBD being a fixture in the American healthcare benefit arena. This year, our survey respondents represent Publicly Traded, Privately Held, Not-for-Profit and Governmental entities in 16 different industry classifications. There are over 4 million active and retired employees represented in this data.

The majority of our respondents are self-funded (57%), and over half (52%) offer a high deductible health plan to plan participants. We can, with this survey, see the growth of the offerings, with the early pioneers representing a track record of more than 10 years, the largest group of respondents showing a track record of 2 to 4 years, and 16 percent of respondents just entering into the VBD market within the last year. That says volumes about the viral expansion of these innovators who are using the latest business-based evidence while the country waits for health care reform.

Because we asked a few more demographic questions this year THAN LAST YEAR, we were able to see the size of companies that have been deploying VBD for several years. While many think that these are the largest of the companies, in fact, our early examination of the data shows that many of the companies with the longest track record were under 10,000 employees, and there are two notable standouts in the 4-year- experience, one company of 80 employees and one company of 6 employees. New to the VBD platform (with a VBD in place just this past year) are companies as small as 13 and as large as 175,000 employees.

The encouraging proof that companies are designing the value more broadly is that 84 percent of those responding have used evidence-based design levers for 2 years or more (some for over 10 years). The use of levers (incentives and disincentives, within an insurance design or offered outside of the insurance plan) mirrors the responses of the 2009 survey, with one important exception:

• Eighty-seven percent use levers to promote appropriate member behavior in areas of Prevention and Wellness
• Fifty-four percent have promoted better adherence to Chronic Care Management, and
• Thirty-four percent offered levers to appropriate Care Delivery, an increase of 8 percentage points from the 2009 survey.

These organizations have already taken steps toward engaging their covered populations in their own healthcare, providing the tools and incentives to make the appropriate care choices.

When we looked more closely at the data, the numbers offering incentives were much larger than the 53% reported, meaning that the definition of VBD may still be stuck in the information gap surrounding value- based pharmacy design as a stand-alone solution, when in fact it is a part of a comprehensive wrap-around for better adherence and accountability in care. This means, then, that the Center, Buck, and our colleagues need to be even more diligent in our work to make sure that the market moves beyond the pharmacy benefit and includes prevention, wellness, and care delivery as part of their total benefit design package.

Chronic care management and care delivery are considered key components of any value-based design. The respondents to our survey have not only identified the disease states, conditions and benefits where they have invested in VBD, but also shared the dimensions of the plan and incentive designs that are getting better outcomes. One key finding is that amidst all of the economic turmoil facing employers in the United States, 16% of the respondents are new to the VBD platform (entering within the last year) and 41 percent of respondents do not anticipate making any changes to their VBD in the 2011 plan year.

What you will find in the following pages are details on how organizations promote appropriate health care utilization within the covered populations, what components of prevention and wellness programs are commonly incorporated into the VBD within the health plans, and some insight into how employers are reacting to the recently passed Patient Protection and Affordable Care Act (PPACA) legislation.

VBD is not a niche concept only administered by a few health care companies, it has expanded to all the national carriers and a number of local and regional managed care companies. The reasons are presented in the data: employers expect to see a return on their investment in VBD, such as a reduction in medical and pharmaceutical cost trends, and an improvement in health status of the covered populations coupled with reductions in disability and worker compensation claims.

But a successful VBD program cannot be implemented by modifying plan design alone. As presented in the survey (and reinforcing our findings from 2009), the mix of communication and service providers is a key engagement accelerator for employees, dependents and management. The communication must extend over longer periods of time as organizations collect information from a variety of sources, improving the precision of the VBD programs. The choice of service providers is expanding: in 2009, we asked questions related to 7 categories, this year we had responses to 11 categories, with “other” providing even more insight as to how plan sponsors are bringing appropriate services into the access and affordability of their populations.

The survey does identify areas where the development of new ideas in VBD is just beginning to take root in the US health care system. Outcomes-Based Contracting™, the concept of aligning incentives in the delivery of care with the behavior change needed in the population, is one example, and is reflected in the answers of 11 percent of the respondents, including the outcomes measures they need to build these contracts.

So where do we begin to implement and measure the effect of VBD in our benefit programs? Value-based designs are based on sound data collection and analysis. Respondents to the survey have used a number of vendors to perform these services, but the key to success is to integrate and analyze data points from medical, pharmacy, disability and workers’ compensation claims data to get a clear picture of the health status of the covered population, including utilization patterns and outcomes. Analysis of each individual ccompany’s data will point to the appropriate direction for each organization, building innovative VBD programs with unique success stories. Survey respondents shared their successes in their plan designs as well. Noteworthy this year is the reduction in emergency room use and the uptake in healthy lifestyle changes.

There will still be challenges both internal and external in the deployment of VBD. Legislative initiatives are changing the rules even as we deliver the important information in this report. How will the insurance exchanges and coverage of prevention/wellness initiatives change the momentum? The survey produces some insights from those already invested in VBD. Additionally, some of the key challenges identified from our respondents are once again presented for the readers, including what would they have done differently if they could: engaging senior leadership earlier in the process is one of the top “wishes” on the list.

The depth and breadth of the survey are a reflection of the remarkable growth in the interest and evidence of VBD. It’s our hope that you will read this report, consider the implications within your plan offerings, and share your successes with us so that others will follow. The faster we can engage individuals in managing their health well, the faster our communities will regain the business and social stability that have been uneven in the past few years.