Dividends in value-based benefit design, embedded in health care reform, are accelerated with an Outcomes-Based Contract™ that improves population health and employee health care benefits, as evidenced in recent results from the CIGNA and Merck contract for diabetes control. This adds to the remarkable evidence cited in the latest Health Affairs November, 2010 issue on VBID, which contains articles highlighting Pitney Bowes, the work of our co-founder, Dr. Jack Mahoney and close allies Niteesh Choudhry and Mark Fendrick.

You may remember that I was asked to comment on the groundbreaking Outcomes-Based Contract™ that was launched by CIGNA and Merck in 2009. Nayer Commends CI-Merck Yesterday, Oct 28, 2010, the first-year results were announced by CIGNA and they are stellar. To Cut to the Punchline: CIGNA estimates that up to $8000 per patient per year can be saved by instituting a comprehensive VBBD, including reduction in care acquisition costs (lower co-pays) plus enrollment in coaching/counseling. http://tinyurl.com/CI-Merck-OBC

Aligning incentives across all of the stakeholders, the definition of an OBC™, means that both CIGNA and Merck took risks to engage, activate, and create accountability for the diabetes patients in this total health management approach. A long-time colleague, Dr. Jeff Kang, who is the CI Chief Medical Officer, is quoted as follows:

“Because CIGNA is able to coordinate data and resources within our company, we are better able to support the health needs of the whole person,” said Dr. Jeffrey Kang, CIGNA’s chief medical officer. “By integrating medical and pharmacy programs, we can identify people who may need extra support early in the diagnosis and progression of their diabetes, which means customers can potentially stay healthier longer.”

Kang said CIGNA is uniquely positioned in the industry to successfully complete an outcome-based contract, and that this is the first of what the company expects will be many more such contracts with pharmaceutical manufacturers. “It’s a key aspect of the future of pharmacy contracting,” added Kang.

Early results showed : improved blood sugar levels of more than 5 percent for those continuously enrolled in the program regardless of which diabetes drug they were taking. Customers who actively participated in CIGNA’s diabetes support program were 3 percent more likely to have their blood sugar under control than those who were not in the program. There was also a 4.5 percent increase in blood sugar lab testing during the period.

• Blood sugar levels improved by more than 5 percent
• Individuals who participated actively in CIGNA’s diabetes support program were more likely to control their blood sugar than those not in the program
• 87 percent of people taking Merck’s Januvia® and Janumet® took their medications correctly
• Savings could be as much as $8,000 per person when medications are taken properly

“Merck is pleased to partner with CIGNA on this program,” said Sethu Reddy, M.D., MBA, vice president medical affairs, Merck. “As the number of people with diabetes continues to increase in the United States and globally, achieving blood sugar control and increasing adherence to diabetes treatment regimens are important goals for patients with type 2 diabetes and their doctors.”

I’ve had the great good fortune to work closely with colleagues at CIGNA and at Merck. You know that I’ve worked for many years with Michael Sokol, MD, who is now the global medical director for Merck; much of our work together was done before he moved to Merck, but we continue to be in close contact and he recently published new analysis of VBBD. Some of you know that I participate as a speaker for Merck events on VBBD, and that I was a co-creator of the toolkit for VBBD for them.

I’ve had long discussions, in various venues, with many of the leaders and innovators in both companies, including Rick Brush, Jeff Doemland and Gary Earl (and Dr. Kang and his team) at CI, Jerry Vuocolo, Pat Counihan, Jeff Niekelski, Rich Patrylak, and Dr. Sokol, among many others at Merck (including some who have moved on to other companies, as well). Real concerns were debated, such as how to measure success, the acquisition of data and measurement of impact, and the bottom-line definitions of value among stakeholders. There was even trepidation as to whether a payer (employer) and a provider group would agree to the intricacies needed to conquer this tipping point.

Yet, when the debates slowed down, and in each instance, when we removed the real and perceived barriers and said, quite simply, “Yes, but what if…What would that new health system look like if we could get this to happen? How can we make this happen?” that’s when the real work ensured. Each time, at each venue, we agreed that focusing on the patient outcomes was not only the right thing to do, it was the only way to change the system and drive accountability all the way to the consumer level, and that’s when the magic began.

This week (11/1/10) is being touted as the “test” of health care reform as the elections draw near. I say, “no,” the real tests are already happening. It takes renegades to be brave enough to test new concepts, to move the dial, and to publish measured results that show directional improvement. I go on record to note, instead, that this week is, in fact important, as Health Affairs publishes a whole volume on Value-Based Insurance Design—and many of the folks on our panel of experts are publishing great work. I go on record to note that it’s not only about the insurance, but it’s about the system-wide accountability that uses data and accountable care to improve outcomes. It’s about the consistent, focused, deliberate efforts of the Experts at the Center for Health Value Innovation that have shown, and continue to show, that value-based benefit designs deliver dividends that matter to individuals, providers, plan sponsors, businesses, and communities—all of which manage a health-wealth-performance© portfolio of their own.

Another tipping point is achieved. Hurray and congratulations to CIGNA and to Merck. Great job! to the patients who enrolled and the care providers who coached them forward.

Look ahead, now: there are more tipping points in the distance, and we will climb every point necessary to improve the health value and economic balance of our country.

“It’s very significant for the industry. There is a commitment on both sides to improve the
health of the population.”

Read the full story here or download it as a PDF.

Merck has agreed to peg what the insurer Cigna pays for the diabetes drugs Januvia and Janumet to how well Type 2 diabetes patients are able to control their blood sugar.

And last week, the two companies that jointly sell the osteoporosis drug Actonel agreed to reimburse the insurer Health Alliance for the costs of treating fractures suffered by patients taking that medicine.

“We’re standing behind our product,” said Dan Hecht, general manager of the North American pharmaceutical business of Procter & Gamble, which sells Actonel with Sanofi-Aventis. “We’re willing to put our money where our mouth is.”

Cigna’s press release quotes CHVI’s Cyndy Nayer:

This alignment is exactly the kind of innovation that supports the ultimate goal of better health for the patient. Our primary goal should be aligning incentives so that the result is a healthier individual. We applaud CIGNA and Merck, and we look for increasing evidence that this kind of thinking can improve the health of our families, our businesses and our communities.