Value-based insurance design helps more members quit smoking

After launching value-based insurance design programs for state workers in 2010, two Oregon public employee benefit boards have produced promising results, according to Joan Kapowich, administrator of the Public Employees' and Oregon Educators Benefit Boards. At last Friday's National Committee of Quality Assurance's policy conference, she described benefit design changes and their impact so far.

Some of the outcomes to date include increased use of preventive services. For example, the share of members who used tobacco dropped from 13 percent to 10 percent between 2005 and 2010. And between 9 percent and 11 percent of members at hundreds of work sites have signed up for free weight management programs, which have generated a return on investment of $2 million in its first year.

To promote better health and contain costs, the plans created a tiered coverage system, raising the copayments for overused services of lower relative value, such as sleep studies and procedures related to musculoskeletal system and connective tissues, while covering preventive and high-value services at low or no cost. Tobacco cessation and on-site, online and community weight management meetings are fully covered. Nor is there any cost sharing for 17 preventive services, such as periodic health exams; vaccinations; and screenings for breast, cervical, colon and prostate cancer.

Because plan members typically do not want to see benefits reduced or eliminated, the benefit boards combined the value tier with a disincentive tier that would affect few members but save money for the program. It's a change that affects only a small percentage of people, but saves money for the group, Kapowich said. The first tier covers preventive and high-value services at low or no cost while the highest tier requires a $500 co-pay for procedures such as spinal surgery, knee and shoulder arthroscopy and hip and knee replacement.

According to Kapowich, most members have accepted such targeted design, which is supported by data on excessive use.

Proponents of value-based insurance design say that it helps health plans achieve better health outcomes at any level of healthcare spending, Margaret O'Kane, president of National Committee of Quality Assurance said during last Friday's conference. "It does not restrict choice, or deny care, or have anything to do with the 'R word'--ration," she said.

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