Transcript Case Studies in Value-Based Benefit Design – Results and Lessons

Case Studies in
Value-Based Benefit Design –
Results and Lessons Learned
Jerry Reeves MD
HEREIU Welfare Funds
Health Innovations
Value-Based Benefit Design
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VBBD is a strategy that minimizes or eliminates out-of-pocket
costs for high-value services in defined patient populations
 High-value services are identified through scientific evidence
 The more clinically beneficial and cost-effective the therapy is
for a patient group, the lower the out-of-pocket costs
Lowering out-of-pocket costs for high-value services has been
found to improve access to and use of those services
More effective use of high-value services may positively impact
the health of the targeted population
 Preventable adverse health consequences reduced
 Related high-cost health care services avoided
Chernew ME et al. Health Aff (Millwood). 2008;27:103-112; Fendrick AM et al. Am J Manag Care. 2001;7:861-867;
Fendrick AM, Chernew ME. Am J Manag Care. 2006;12 (special issue):SP5-SP10.
Value Based Intervention Strategies
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Identify Top Risks
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Cost and Use Outliers
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Chronic Disease Drivers
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• Diabetes, Blood Vessels
• Depression/Anxiety
• Lung Disease, Smoking,
Cancer
• Sedentary, Musculoskeletal
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Structured Interventions
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HRA, Screen Tests, Measures
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Tobacco Cessation,
Medication Adherence
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Preventive Services Campaign
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Steer to Best Value Providers
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Steer to Best Value Services
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• Ofc visits vs. ER, Hospital
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Medical Home (Top Docs)
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Engage the Patients &
Providers
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Multiple Touches• Face to Face if Possible
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Incentives
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Know Their Numbers
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Wellness Programs
• Walking- Steps per
Week
• Weight and Waist
• EAP/ Substance Abuse
Coordinate the Partners
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“Connect the Dots”
Measure / Report Results
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Prescribing Patterns,
Provider Profiles
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Care opportunities taken
Improve
Cost and Use Outliers - 50,000 Feet View
Importance Index
Small Plans
N (% Change)
Mid Size Plans
Importance
Index*
N (% Change)
Importance
Index*
Lives
3,709 ( - 8.2%)
31,152 ( - 0.5%)
Patients
1,631 ( +5.8%)
27,292 ( + 6.9%)
$6,389 ( +13.3%)
$91,577 ( + 8.5%)
Patients/1000
440 ( +14.6%)
876 ( + 7.4%)
Physician $pmpm
$447 ( +24%)
107*
$383 ( +10.6%)
42*
OP Facility $ pmpm
$304 ( +37.3%)
112*
$304 ( +19.6%)
61*
IP Facility $ pmpm
$332 ( +3.0%)
10*
$269 ( - 2.8%)
-8*
Drugs $ pmpm
$122 ( +10%)
12*
$208 ( + 8.0%)
17*
All Medical $ pmpm
$1257 ( +18%)
1150**
$1225 ( + 9.0%)
2803**
Paid (000s)
•* Importance Index by Service Category = $ pmpm times the % Change
•** For All Medical, it is % Change times the total paid in 000s
Impacts of Surgery and Anesthesia - 5 Plans
Paid
(000s)
PMPM
Yr to Yr
Change
InPt FacilityMed/Surg
17,901
239
-4%
Outpt Surg Facility
6,378
85
16%
IP Surgeon
1,541
21
15%
Outpt Surgeon
2,003
27
11%
Office Surgeon
2,340
31
10%
IP Anesthesia
587
8
-6%
OP Anesthesia
1,494
20
28%
Total
32,244
431
10%
Surgery and anesthesia = 35% of total medical spend
MD Cost Variation; Same Outcome
Specialty
Condition
Low
Average
High
Otitis media $46
$109 (+137%)
$412 (+796%)
Bronchitis
$89
$150 (+69%)
$771 (+766%)
UTI
$81
$140 (+73%)
$778 (+860%)
Angina
$86
$297 (+245%)
$743 (+764%)
Angina
$241
$611 (+154%)
$1389 (+476%)
Knee surg.
$2,727
$4,473 (+64%)
$9,383 (+244%)
FP
IM
Cardiology
Orthopedics
Site of Care Matters –
5 Plan Units
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Hospital – cost per admit =
Emergency Room – cost per visit =
Urgent Care – cost per visit =
Office Visit – cost per visit =

Doctors receive 6 times as much payment to
administer chemotherapy and specialty drugs in an
outpatient facility compared to in their office.
$9,363
$737
$64
$69
Data Based Interventions

Focus scheduled meetings with UM partners and PPO network partners
on action plans
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•
•
•
Avoidable non value added surgery and imaging - action plans
Require “expected impact on management” in prior auth for imaging studies
Require independent radiologist evaluation of abused imaging studies
Informed consent and patient education on alternatives as part of the prior
authorization process
• Retrospective medical record reviews of medical necessity and impacts on
subsequent treatments
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Consider higher co-pays or co-insurance for non value added imaging,
ER visits and elective surgeries
Consider contracting radiology sub-network and/or radiology benefit
management company
Consider contracts with Centers of Excellence (“medical tourism”) and
oncology management company
Steer to “Infusion Centers”, free standing surgery centers for better rates
and service
Consider investigations of suspected churning and upcoding
Consider implementing “Tel-A-Doc”, phone nurses, “Doctor Tomorrow” &
self-care guides to reduce unnecessary ER visits.
Incentives to use retail clinics & doctor offices instead of ERs.
Focus for Lower Costs and Better Outcomes
Priorities for Lowering Illness Burden
Health Risk Measure
Added Cost per Year
Believe health is fair or poor
(reaction to stress)
$3,530
Feel depressed
(reaction to stress)
$2,326
Have high stress
(reaction to stress)
$1,435
Poor life or job satisfaction
(reaction to stress)
$1,313
High blood sugar
(diabetes)
$1,150
Overweight by BMI (>27.3 women, >27.8 men)
$690
Current smoker
$447
High cholesterol (>239)
$428
More than 14 drinks per week
$398
BP above 139 systolic or 89 diastolic
$390
Walk < 30 minutes per week
$339
No self-care book being used
(not “engaged”)
From: University of Michigan Health Management Research Center and W ellness, Inc.- 2005
$225
5
Health Improvement
Opportunities
9000
8000
Acute Illness Opportunity
Serious disease
7000
Minor Disease
6000
4000
Chronic Condition
Opportunity
No Disease
5000
Prevention/ Fitness
Opportunity
3000
2000
1000
0
Q_12
Q_9
Q_6
Medical and Drug Costs only
Q_3
Q0
Q3
Q6
Q9
From Dee Edington, University of Michigan
Q12
Many At Risk Are
Unaware/Undiagnosed
CONDITION
Hypertension (Adults)
Diabetes (Adults)
Pre-Diabetes
(Ages 40-74)
High Blood Lipids
(LDL above 129 mg/dl)
% UNAWARE/
UNDIAGNOSED
37%
29%
> 50%
41%
From: “Metabolic Syndrome and Employer Sponsored Medical Benefits: An Actuarial Analysis’
K Fitch, B Pyenson, K Iwasaki; Milliman Consultants and Actuaries, March 2006.
11
Lower rates of medication adherence lead to
higher total medical costs in patients with diabetes
Mean medical and drug costs by adherence-rate category
over 12 months (patients with diabetes)
 Patients who were
most adherent had
total costs 49%
lower than patients
who
were least
adherent
were reported for
hypertension and
hyperlipidemia
Medical Costs
$16,498
16,000
Drug Costs
14,000
$13,077
$11,484
10,000
$8887
$15,186*
8000
$11,200*
$11,008*
6000
$9363*
$6377
4000
2000
Patients who were
most adherent were
less likely to be
hospitalized than
patients with lower
adherence levels
(P<.05)
$12,976
12,000
Cost ($)
 Similar findings
18,000
0
$1312
182
$1877
$1970
$2121
$2510
n=182
n=259
n=419
n=599
n=1801
Least
Adherent
Less
Medium
More
Most
Adherent
259
419
599
1801
*P<.05 compared with medical costs for most adherent.
Retrospective cohort study of sample of 137,277 patients aged <65 years.
Adapted from Sokol MC et al. Med Care. 2005;43:521-550.
Obesity Trends in the U.S.
Medical Complications of Obesity
Pulmonary disease
abnormal function
obstructive sleep apnea
hypoventilation syndrome
Nonalcoholic fatty liver
disease
Idiopathic intracranial
hypertension
Stroke
Cataracts
steatosis
steatohepatitis
cirrhosis
Coronary heart disease
Diabetes
Dyslipidemia
Hypertension
Gall bladder disease
Severe pancreatitis
Gynecologic abnormalities
Cancer
abnormal menses
infertility
polycystic ovarian syndrome
breast, uterus, cervix
colon, esophagus, pancreas
kidney, prostate
Osteoarthritis
Skin
Gout
Phlebitis
venous stasis
MEDICAL COST INCREASES
BY BMI STRATA (US)
BMI
25-29.9
BMI
30-34.9
BMI
35-39.9
BMI
>40
3,915
MEN
+17%
+21%
+58%
+105%
3,999
WOMEN
+9%
+27%
+43%
+112%
From: Bachman K. Obesity, Weight Management, and Health Care CostsA Primer. Disease Management 2007; 10:129-137
Impacts of Chronic Disease – 5 Plans
LIVES
% OF
ALL
LIVES
PAID/PATIENT
(YEAR)
RATIO TO
AVERAGE
PATIENT
TOTAL PAID
(MILLIONS)
ALL LIVES
IN 5 PLANS
31,152
100%
$3,355
1.00
$91.6 M
DIABETES
2,206
7.1%
$7,337
2.19
$17.9 M
ASTHMA
1,656
5.3%
$5,149
1.53
$8.1 M
CAD
1,166
3.7%
$10,230
3.05
$12.0 M
COPD
464
1.5%
$12,182
3.63
$5.9 M
CHF
472
1.5%
$13,941
4.16
$6.9 M
ONE OR
MORE
4,580
14.7%
$6,609
1.97
$31.5 M
CHANGE VS
PRIOR YR.
4.4%
2.5%
Recommendations: Implement “Chronicare” Programs; Integrate health management
outreach for primary and secondary prevention of chronic disease;
Implement obesity management programs for moderate and severe obesity.
Chronic Disease Interventions
High Cost Claimant Care Coordination
Example Employee # 1
Total Cost: $16,305 (6 months)

Heart Disease
 Pulmonary / Respiratory Issues
 Esophageal Issues
 High Blood Pressure
 High Cholesterol
 Joint Pain
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Example Employee # 2
Total Cost: $27,215 (6 months)
 COPD/Respiratory
Hypertension
 High Cholesterol
Depression
Seizures / Grand Mal
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Example Employee # 3
Total Cost: $93,244 (6 months)
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 4 PCPs
2 Physician’s Assistants
 2 Cardiologists
Heart Disease
Hypertension
High Cholesterol
5 PCPs
3 Cardiologists
 1 Pulmonologist
4 PCPs
2 Pulmonologists
2 Cardiologists
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Findings – High cost patients
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Obesity, chronic diseases, cancer, kidney failure (dialysis), serious heart
disease, and surgery complications drive the most costs.
Chronic disease patients who take their medications have lower costs.
Generic drugs cost $130 less / Rx / mo
Discontinuous care exaggerates complications and costs
Interventions
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Steerage and incentives to use “Blue Distinction” and other Centers of
Excellence
• Cardiac, Surgery, Cancer, Bariatric, Kidney
Integrate health management- primary and secondary prevention of
diabetes (obesity), cancer (smoking cessation, cancer screening), heart
disease (fitness), “Connect the Dots” (PBM/ medication adherence, UM)
Consider “Chronicare Program”, high touch disease management
Value based benefit design
• Lower out of pocket costs for higher value services (i.e. chronic
condition drugs, preventive services)
• Higher out of pocket costs for lower value services (i.e. imaging)
• Consider lower out of pocket costs for health age near chronologic
age
What We Must Do
 Engage
doctors and patients
through incentives and consequences
in rational decisions about
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Elective surgery
Non value added imaging
Lifestyle choices
Handling depression
Diabetes self care
Cancer prevention/ early intervention
Adherence to chronic medications
Connect the Dots Engage the Members
Welfare Fund/ Health Plan
(Claims Analysis, Benefit Design, Customer Service)
Work Site Programs
(Flyers, Lunch & Learns, HRA, Biometrics, Tests,)
PBM
(Care Tracking, Med Adherence)
Hospitals/ Education Centers
Doctors/ Clinics/ Pharmacies
Dieticians
Fitness Center
Participant
Weight Watchers
EAP, Mental Health
Tobacco Cessation Program
Phone Nurses
Case Managers, UM
Employee Cafeteria
Meals/ Snacks
Health Coaches
Laboratories
Pharma Companies
Case Studies
Lessons Learned
West Virginia
1340 Employees
Avg. Age= 44
PROBLEM
14.5% Annual Medical Cost
Trend
for 8 years running
Overweight:
VBBD Case Study
VALUE BASED DESIGN
Enrollment requires coaching
calls
Generic drug co-pays waived
HEREIU Welfare Fund
RESULTS
Saved $2 million first year
3 Year Annual Cost Trend <4%
(Rest of WV Cost Trends
+12%)
75%
Free self-care book
High BP:
41%
Free tobacco cessation
program
Use Tobacco:
31%
On site clinic
Generic fill rate: Increased 18%
Diabetes:
29%
Cost transparency
60% + Know Their Numbers
Prescribing transparency
Average Cholesterol: 8% lower
Co-insurance incentives
Quit Tobacco:
year
Didn't Know Their Numbers
Outpt hosp pmpm:
higher
Radiology:
Ofc visits:
Drugs:
88%
85% higher
66% higher
48% higher
Drug Cost Trend: Negative 9%
6% in first
Outpatient facility
Good nutrition:
increase
CT scans
Good cholesterol: 29%
increase
Steer to better value providers
Good exercise:
increase
50%
25%
Physician Prescribing
Transparency
DTC Generic Alternatives Campaign
Aurora Units Drug Trends - Successes
DRUG CLASS
DIFFERENCE
CLAIMS/1000
% DIFFERENCE
CLAIMS/1000
Antidiabetics
+5.9
+12.5%
Antilipemics
+7.5
+13.8%
Blood Pressure
+7.6
+12.0%
Asthma
+1.9
+8.1%
Antidepressants
+1.9
+7.5%
Cardiovascular
+1.4
+44.4%
As medication adherence increased, inpatient med/surg dropped 4%.
For 5 plans, drugs increased $1.1 M, IP med/surg dropped $0.8 M.
Chronicare Program Flow Sheets
Diabetes, Hypertension, Lipids
Summary
 Improvements
in health and medical cost
trends can be achieved through integrated
health management interventions.


Value based benefit designs and care
management engagement
Incentives and consequences for patients and
providers aligned with desired behaviors.
 Challenges
remain in moving health
choices from being externally motivated to
becoming internally driven.