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Updated 2/20/2018 "Value-based insurance design" aims to increase health care quality and decrease costs by using financial incentives to promote cost efficient health care services and consumer choices. Health benefit plans can be designed to reduce barriers to maintaining and improving health. By covering preventive care, wellness visits and treatments such as medications to control blood pressure or diabetes at low to no cost, health plans may save money by reducing future expensive medical procedures. Benefit plans may create disincentives as well, such as high cost-sharing, for health choices that may be unnecessary or repetitive, or when the same outcome can be achieved at a lower cost. To decide what procedures are the most effective and cost efficient, insurance companies may use evidence-based data to design their plans. Good data about the effectiveness of value-based insurance design are limited, but early results have been promising. This webpage is designed to provide information about value-based insurance design, its role in the Affordable Care Act, examples of its use, and information about complementary and related cost containment strategies. Value-Based Insurance Design in the Affordable Care ActThe Affordable Care Act (ACA) of 2010 emphasizes increasing quality and efficiency in health care through access to preventive services and providing appropriate treatment, when needed. In an effort to prevent expensive illness and medical procedures, Section 2713 of the Act requires that all health plans include certain preventive services without a copayment for the patient. The required preventive services for adults include blood pressure screening, colorectal cancer screening, and screening for sexually transmitted infections. A list of required preventive services for various populations can be found at Healthcare.gov. Section 2713 of the Affordable Care Act also allows the secretary of the U.S. Department of Health and Human Services (HHS) to establish guidelines to permit a health insurance plan to use value-based insurance design. In December 2010, HHS published in the Federal Register a request for public comments related to implementing value-based insurance design and coverage of required preventive services in health plans. The U.S. Department of Labor website displays public comments received in response to the request, including statements from insurance companies, business groups, medical associations, and leaders in the field. Federal guidance regarding the implementation of value-based insurance design in health plans will be issued in the coming months. President Obama Signs 2017 Defense Bill Authorizing TRICARE V-BID Pilot On Dec. 27, 2016, President Obama signed a $619 billion defense bill that calls for a pilot program to demonstrate and test the feasibility of incorporating Value-Based Insurance Design into the TRICARE program. The pilot aims to improve health outcomes and enhance the experience of care for U.S. Armed Forces military personnel, military retirees, and their dependents. Section 701: (1) IN GENERAL -- Not later than January 1, 2018, the Secretary of Defense shall carry out a pilot program to demonstrate and assess the feasibility of incorporating value-based health care methodology in the purchased care component of the TRICARE program by reducing copayments or cost shares for targeted populations of covered beneficiaries in the receipt of high-value medications and services and the use of high-value providers under such purchased care component, including by exempting certain services from deductible requirements. The pilot includes an evaluation of how reducing or eliminating the cost-sharing for specified high-value medications and services impacts: (I) adherence to medication regimens; (II) quality measures; (III) health outcomes; and (IV) beneficiary experience. This major policy milestone builds on growing bipartisan support and the expanded role of V-BID in public and private payers, including the Medicare Advantage V-BID demonstration and H.R. 5652 "Access to Better Care Act of 2016," a bipartisan bill that provides high-deductible health plans the flexibility to provide coverage for services that manage chronic disease prior to meeting the plan deductible. -Descrption by VBID-Center, 12/27/2016 State and Local Examples of Value-Based Insurance DesignAs health care costs continue to rise, public entities strive to contain the costs of employee health plans. Many state and local governments face steep budget cuts, reinforcing the need to keep costs low and help maintain healthy and productive public employees. Below are examples of a few public entities that have implemented aspects of value-based insurance design in public employee health plans.
Value-based insurance is a relatively new approach to health insurance in which financial barriers, such as copayments, are lowered for clinical services that are considered high value, while consumer cost sharing may be increased for services considered to be of uncertain value. Such plans are complex and do not easily fit into the simplified, consumer-friendly comparison tools that many state health insurance exchanges are formulating for use in 2014. Nevertheless some states and plans are attempting to strike the right balance between a streamlined health exchange shopping experience and innovative, albeit complex, benefit design that promotes value. For example, agencies administering exchanges in Vermont and Oregon are contemplating offering value-based insurance plans as an option in addition to a set of standardized plans. [Read more] Health Affairs - 2013. (reviewed 2016)
Smaller Hospitals and Health Systems Struggle to Deliver Value-Driven Care; Financial Future at Risk. Competing priorities and regulatory uncertainty are making it difficult for health care organizations to transition from fee-for-service to fee-for-value, according to a new report released in mid-2017. The report details insights from a national survey EY conducted with 700 qualified health care professionals. Published by the Ernst & Young LLP Advisory Health practice, July 12, 2017 The American College of Physicians (ACP), in a new position paper,
"Addressing the Increasing Burden of Health Insurance Cost-Sharing," recommends the implementation of value-based insurance design (V-BID) as a potential solution to make patient cost-sharing more equitable. Currently, "consumer cost-sharing, particularly deductibles, may cause patients to forgo or delay care, including medically necessary services." July 2016. Value-Based Insurance Design can drive innovation in Health Insurance Exchanges. A fact sheet for states considering the role of VBID in health exchanges; published by the Center for Value-Based Insurance Design (V-BID), University of Michigan School of Public Health. January 2012. Prescription Drugs and Value-Based Purchasing or Contracting.In 2017, a newer version of value-based purchasing emerged, with strong support from individual brand-name pharmaceutical manufactuers and individual mjaor insurance comnpanies. These arrangements have attracted attention from health academics, journalists and analysts. These are some initial descriptions and resources: > BIOTECHNOLOGY AND STATE ROLES - NCSL live session at Legislative Summit in Boston - August 8, 2017. Biotech research is growing fast. In Massachusetts, more than 63,000 biopharma employees are working on more than 1,600 potential new medicines. Learn how new models for pricing and research are hoping to bring down the cost.
> Drug Effectiveness and SMART-D Alternative Payments in Medicaid
> Tackling Low-Value Care: A "Top Five": List for Action. A "Top Five" list of low-value services that purchasers and providers should target for reduction was featured in a Health Affairs Blog post. Read the Health Affairs article on the $billions spent on commonly used low cost, low-value services identified from the Virginia All-Payer Claims Database. - February, 2018. *NEW* Examples of Value-Based Insurance Design in Industry & EmployersAs health care costs continue to rise, many large companies look for ways to control their employee health care spending. Instead of increasing cost-sharing, which can lead to immediate savings but higher costs down the road if employees discontinue preventive care, some corporations have implemented forms of value-based insurance design.
Federal CDER and Counter-ArgumentsInfographic: How Should We Assess Value? NPC illustrates what value frameworks are, who uses them, the challenges associated with them, and our Guiding Practices for Patient-Centered Value Assessment in this easy-to-read infographic. August, 2016 by National Pharmaceutical Council. Beyond the Affordable Care Act: A Physicians’ Proposal for Single-Payer Health Care Reform. Unfortunately, empiric support for this approach is lacking, and it rests on dubious assumptions about measurement and motivation. In assessing outcomes, isolating the
“signal” of medical quality amidst the “noise” of genetic, social and behavioral factors that influence health is almost impossible. No current or foreseeable risk-adjustment algorithm reliably accounts for the many patient factors that are beyond clinicians’ control. Despite decades of effort to develop inpatient risk adjustment, four widely used algorithms yield strikingly divergent rankings of hospital mortality performance.39 Hospitals that appear first-rate according to one
algorithm can appear hazardous according to another. Similarly, even excellent doctors who care for disadvantaged patients often score poorly on quality metrics.40 The largest hospital P4P demonstrations found initial gains, but no lasting improvement in outcomes.41-43 Systematic reviews on P4P have concluded that high-quality evidence of benefit is lacking.44 Value-Based Purchasing and Other Cost Containment StrategiesHealth plans have implemented numerous cost saving strategies, including value-based insurance design. With health care costs continuing to rise and a renewed emphasis on controlling costs and increasing quality through provisions in the Affordable Care Act, other cost containment models are being tested in conjunction with, and outside of, value-based insurance design. Below are a few of the more prominent cost containment strategies gaining attention. Additional information, as well as other cost containment strategies, can be found on NCSL's Cost Containment Briefs webpage.
High-Needs,High-CostS Patients: Challenges and SolutionsIt is widely known and accepted that five percent of the population consumes about 50 percent of the health dollar in the Unitd States. The top one percent of costly patients ahve an even larger impact of health budgets. States, federal, commercial and academic experts have tackled this ongoing math puzzle with innovative expeiments, attempts at cost constraints and othe approaches. This toolkit list describes both resources and live programs.
Visit this web-based report online at http://www.ncsl.org/issues-research/health/value-based-insurance-design What did the Affordable Care Act do?Make affordable health insurance available to more people. The law provides consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level (FPL). Expand the Medicaid program to cover all adults with income below 138% of the FPL.
What are 2 ways the Affordable Care Act improves access to health insurance?The ACA enabled people to gain coverage by 1) expanding the publicly funded Medicaid program to cover adults with annual incomes up to 138% of the federal poverty level; 2) establishing the Health Insurance Marketplace for individuals and small businesses, allowing them to purchase private health insurance (PHI); and 3 ...
What was the original Affordable Care Act?The Patient Protection and Affordable Care Act was signed into law by President Obama on March 23, 2010. It is more commonly known as the Affordable Care Act (ACA) or its nickname, Obamacare.
Which president was responsible for passing the Affordable healthcare Act?President Obama signs the Patient Protection and Affordable Care Act, which signifies the biggest reform of the healthcare system in over 50 years.
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