When a self-insured health plan adopts value-based purchasing and insurance design, its goal is to persuade workers to adopt a healthy lifestyle and go to the best performing providers. That’s how plan savings occur, by catching cases before they become acute care cases that harm a self-insured health plan.
Self-insured health plans that want to adopt value-based benefits have at least three major tasks at hand: (1) finding and purchasing from the high-performing provider in the area; (2) designing a benefit that will steer employees to those high-performing providers; and (3) emphasizing effective preventive care, so chronic ailments don’t become acute and costly. A speaker at the National Business Coalition on Health’s annual conference in Washington, D.C., on Nov. 12 told attendees how to achieve these goals.
Importance of Basing Strategies on Data
Before even starting, plans should collect and study data to identify which aspect of the benefit most needs work at improving performance and lowering costs. An understanding of the relevant health plan data must underpin all efforts to control costs. Frequent examples are programs to improve pharmacy benefits, diabetes management initiatives, and promoting physical exercise and nutrition, Gary Rost, Executive Director of the Savannah Business Group said.
Self-insured health plans must do a health risk assessment to find out what their liability risks are for its population, stratify them, pick the one that’s going to cost them the most, and make a program to address that cost. It’s nice to have all these bells and whistle programs, but plans need to know the areas that are costing them the most money and address them.
Rost says there are four major things health plans must do to control health plan costs:
- Negotiate the best price you can get.
- Get the best quality you can, “and if you can’t, then work with physicians to improve quality with the providers you have.”
- Design your plan to drive at-risk patients to the better providers.
- Work on improving health in your community. “See what the community is working on and see if you can integrate that into what you’re doing, so you don’t have to redesign the wheel,” Rost said.
Rost described the importance of data, identifying cost control targets and revising plan design to drive participation by the workforce.
You can’t do anything until you know what your utilization is, what your risks are, what your liabilities are, who’s seeing what physicians, what they’re seeing the doctors for. Start looking at your data.
Then you decide what you want to go after, by asking: Where are our risks, where are the opportunities, what do we need to work on. You make a design with benefits and incentives; then you decide how are we going to provide that through your network, by deciding: How do we structure programs to achieve that, how do employees access those programs.
Importance of Multi-year Strategy
And while employers can make quick progress on these four things, Rost says a value-based program really needs time to work: value-based changes require a multi-year commitment to strategic progress, and not just taking things as they come
[Pursuit of value] leads plan sponsors to creating a strategic management process designed to decide how health benefits will be managed. Many, many employers have no long-term strategic goals — they just go year to year … leading to consultant fees. Plans that want to implement VBID have to have a long range vision about plan design and what they plan to do about the productivity of their people.
A New Cost-quality Equation
The cost and quality equation is more complicated than it used to be, giving plans more levers to develop good value-based programs. In addition to cost and quality, plans now can and do track: (1) patient satisfaction; and (2) population health, as part of grading providers for value and quality.
High patient satisfaction scores usually coincide with high provider quality, Rost said. A measure of patient satisfaction is patients’ reports on physician empathy. Physicians with high empathy scores had better clinical outcomes than physicians with lower empathy scores, he said.
Thanks to the program, Rost said, the City of Savannah has seen the following outcomes:
- 13-percent increase in primary care physician visits;
- 5-percent reduction in specialist visits;
- 12-percent reduction in outpatient surgeries;
- 24-percent reduction in outpatient diagnostic;
- 18-percent reduction in intensive care admits; and
- 19-percent reduction in intensive care days.