One way to increase the value of insurance coverage is to eliminate or lower a patient's out of pocket costs (OOP), i.e., their co-pays and/or deductables, for health care services that are of high value, for example, vaccines and/or alternatively increase OOP costs for low value service, for example, certain imaging tests. The concept is based on the straight forward rationale that, based on clinical evidence, certain health care products or services are proven to be more effective than others. (This is the rationale for the Choosing Wisely program, at: https://www.choosingwisely.org/.) OOP costs therefore should not be uniform for all services and medications, particularly when non-adherence rises along with rising health care OOP spending. This largely explains the problem of medication non-adherence. Phrased another way, we need need to solve for the increasing problem of under consuming high value care. This idea was recognized in the 2010 Affordable Care Act, specifically Section 2713 [c] that eliminates patient cost sharing for specific preventive care services. For example, OOP costs for significantly under-utilized breast and colorectal screenings, for which approximately only 72% and 60% of patients, respectively, are screened. The value-based idea was furthered by the ACA-created CMS Innovation Center that in 2017 the launch the MA VBID demonstration - that was recently extended to 2024. (This discussion is related to or can serve as a follow up to my May 11th conversation with Professor Andrew Ryan concerning measuring for value or spending efficiency.)
During this approximately 30 minute conversation, Dr. Fendrick discusses moreover the creation of the University of Michigan's VBID Center, provides his assessment of the current CMS Medicare Advantage VBID demonstration, the U. of MI Center's just announced V-BID X insurance design, VBID efforts at the state level and the Treasury Department's just-announced guidance allowing Health Savings Account/High Deductible Health Plans to practice VBID.
Dr. A. Mark Fendrick is the Director of the Value-Based Insurance Design Center at the University of Michigan. He is also Professor of Internal Medicine in the School of Medicine and a Professor of Health Management and Policy in the School of Public Health at the University of Michigan. He has authored over 250 articles and book chapters and has received numerous awards for the creation and implementation of value-based insurance design. Dr. Fendrick is an elected member of the National Academy of Medicine (formerly the Institute of Medicine or IOM), serves on the Medicare Coverage Advisory Committee, and has been invited to present testimony before the U.S. Senate Committee on Health, Education, Labor and Pensions, the U.S. House of Representatives Ways and Means Subcommittee on Health, and the U.S. Senate Committee on Armed Services Subcommittee on Personnel. Dr. Fendrick is the co-editor in chief of the American Journal of Managed Care and is an editorial board member for three additional peer-reviewed publications. He is also a member of the Institute for Healthcare Policy and Innovation at the University of Michigan, where he remains clinically active in the practice of general internal medicine. Dr. Fendrick received a bachelor’s degree in economics and chemistry from the University of Pennsylvania and his medical degree from Harvard Medical School. He completed his residency in internal medicine at the University of Pennsylvania where he was a fellow in the Robert Wood Johnson Foundation Clinical Scholars Program.
For information about U. of Michigan's Center for Value-Based Insurance Design to go: https://ihpi.umich.edu/center-value-based-insurance-design-v-bid.
A summary of the V-BID X proposal is at: https://www.healthaffairs.org/do/10.1377/hblog20190714.437267/full/. The more complete white paper is at: http://vbidcenter.org/wp-content/uploads/2019/07/VBID-X-Final-Report_White-Paper-7.13.19.pdf.
For information concerning Dr. Fendrick's mention of the just-released US Treasury guidance allowing HSA-HDHP plans the flexibility to cover specified medications and services prior to meeting the plan deductible go to: https://ihpi.umich.edu/center-value-based-insurance-design-v-bid .
Dr. Mark Fendrick Discusses Value-Based Insurance Designs (July 19th)