Bana Jobe

Insurance Plan Design: All Roads Lead Back to Value

How exactly is an insurance plan made? It depends, to a certain extent, on when it was designed.

Some 15 or 20 years ago, health plans centered primarily on cost, risk assessment and a “fee-for-service” model, which paid providers based on patient volume. Following suit, insurance companies designed plans without regard for outcomes. Now, patients have become smarter health care shoppers and showed they want more value from their visits — and insurers have taken notice. The result? Value-based insurance design.

The Responsibility of Insurers

Born from the value-based care movement, which prioritizes quality and outcomes of care over sheer volume, value-based insurance design works to give policyholders the most bang for their buck by connecting them with the providers, procedures, tests and treatments that have been shown to provide the highest value at the most sensible price. To achieve that ideal mix of cost and care, insurance companies have to take into account heaps of clinical research and performance data. Value-based insurance design happens when payers take into account some or all of the following:

  • Effectiveness. To receive truly valuable care, that care has to be effective — not just inexpensive. That’s why value-based insurance designers assess providers and interventions that offer the best track record for healthy outcomes and work to build special networks and policy parameters around star performers.
  • Individual circumstances. Just as treatments are tailored to specific conditions, plans should be tailored to specific patients. Value-based plans incorporate a patient’s particular needs by assessing smaller patient populations rather than solely putting patients into broad categories, such as low- or high-risk patients.
  • Patient experience. A person’s experience with their health care matters, and while effectiveness is important, so is patient satisfaction. As a result, certain health plans are designed to accommodate patient preferences in network planning, such as picking out providers with stellar bedside manners or hospitals that offer a comforting environment.

The Responsibility of Providers

The burden of covering high-value care may fall on the shoulders of insurers, but someone has to deliver that care. That’s why health care providers are faced with having to demonstrate value to patients.

In 2016, the American College of Physicians (ACP) recognized this with a position paper that laid out key strategies that all health care players — providers included — should follow to reduce costs while increasing value. Of those specifically targeted at providers, a common theme of systematic and team-based collaboration carried through, including:

  • Coordinated care. Citing the need for more “team-based care that emphasizes prevention” and integration between health care professionals, the ACP called for a greater effort to cross-collaborate and connect wellness-focused care for a better patient experience.
  • Resource planning. The ACP also called for “allocating resources with a focus on medical efficacy, clinical effectiveness and need,” informed by clinical data.

The Responsibility of Employers

Beyond simply offering more value-based plans in their benefits mix, employers can boost the health of their employees by focusing on value-based wellness in the workplace. Wellness programs — from smoking cessation to chronic disease management — firmly check that box. Outside of those resources, employers can actively inform and customize their own plan designs to suit the specific needs of their workforce. Common tactics include:

  • Differentiated prescription copays. According to the National Conference of State Legislatures, as yearly care costs exceeded $400 million, hospitality giant Marriott International lowered copays for medications to treat conditions like diabetes, heart disease and asthma. These investments brought greater returns by improving the health of the company’s workforce overall. Shipping services company Pitney Bowes experienced similar results when they cut chronic disease medication copays to as much as 10 percent of the original drug cost.
  • Disease management incentives. By giving employees premium incentives for completing a health risk appraisal system and companion disease management program, construction machinery company Caterpillar reduced disability days by 50 percent overall. As many as nine in 10 employees participated in the appraisal.

According to a study of more than 6.2 million Blue Cross Blue Shield members, an emphasis on healthier employees through high-value care can lower aggregate cost trends by as much as 35 percent. It just goes to show: When you invest in the health of your employees, you invest in the long-term growth of your business. Choosing a carefully designed insurance plan that puts value front and center is a great way to start.

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