According to a survey of hospital executives, three of the nation's five largest insurers had higher negative approval ratings than positive ones. Minnetonka, MN-based UnitedHealth Group Inc., which has contracts with 96 percent of the hospitals responding to the survey, was hit with the worst ratings. UnitedHealth Group received an "unfavorable" opinion from 91 percent of the hospital executives who responded.
The popularity of health savings accounts has grown, attracting employers and workers with a price tag that's significantly lower than other forms of insurance. But skeptics say HSA growth potential is exaggerated, and that the accounts target healthy people, siphoning them out of insurance pools and leaving sicker patients behind. Critics also say HSAs lack consumer-friendly information that allows people to make informed decisions on services, such as a comparison of hospitals and doctors' prices and effectiveness.
Healthways Inc., a Nashville-based provider of disease management services, has announced that CIGNA has agreed to extend a contract under which the company provides disease management support for programs that serve more than 1.2 million CIGNA members. Through the programs, CIGNA enrollees that have chronic diseases and persistent conditions receive help managing their illnesses, avoiding unnecessary hospitalization, and slowing or stopping progression of their disease.
Humana is launching a complex-care management program for chronically ill Medicare members in several states. The program will attempt to prevent unnecessary trips to the hospital by making sure seniors have the right medications, transportation to appointments, and safety measures such as grab bars and ramps in their homes. Care management will be provided by a telephonic and field-based team of social workers, nurses, health coaches and Humana managers.
A couple retiring in 2008 will need about $225,000 in savings to cover medical costs in retirement, according to a study released by Boston-based Fidelity Investments. The figure, calculated for a couple age 65, is up 4.7 percent from the $215,000 estimate for 2007. It is similar to other projections for healthcare costs in retirement, figures that show longer life spans also are requiring workers to increase retirement nest eggs dramatically.
Faced with escalating healthcare costs, most health plans and employers increase copays and deductibles to bridge gaps, but growing research is showing that the reverse is actually the better alternative.
A recent study published in Health Affairs of a large employer's value-based insurance design (VBID) program showed how cutting copays for life-saving medications increases adherence. VBID supporters say the theory works: Affordable medicine increases adherence, improves outcomes, and may even save money in the long run through averted ER visits, hospitalizations, and decreased costs associated with chronic disease.
In the study, the employer reduced copays for five chronic medication classes within a disease management program: angiotensin-converting enzyme (ACE) inhibitors and angiotensin receptor blockers (ARBs), beta-blockers, diabetes medications, HMG-CoA reductase inhibitors (statins), and inhaled cortiocosteroids (steroids). And these cuts were significant. The copayment rates for generic medications went from $5 to zero. Copays for brand-name drugs were lowered by 50 percent.
The results showed increased medication adherence in four of the five medication classes and reduced non-adherence by 7-14 percent.
VBIDs have grown in popularity since Pitney Bowes blazed the trail in 2002 by reducing copayments for several classes of prescription drugs. The Stamford, CT, company reported favorable clinical results, medication compliance, and cost savings. Since those first days of VBIDs, a growing number of employers, organizations, health plans, and academics have promoted VBIDs as a solution to medication compliance problems.
I am hosting an audio conference on the topic of VBIDs on March 13 with two of the leaders in the movement, A. Mark Fendrick, co-director of the University of Michigan's Center for Value-Based Insurance Design, and Gregory B. Steinberg, MD, chief medical officer at ActiveHealth Management in New York. Fendrick and Steinberg will provide information on VBIDs, and will highlight the study in Health Affairs.
They will also talk about how a more advanced VBID program could mean greater long-range savings. A tighter VBID option that offers different copays depending on health status goes beyond the more basic programs described earlier in this column. The more sophisticated design:
Uses decision-support algorithms to identify people who, based on medical literature, would benefit from specific medications
Identifies those who are already appropriately on therapy as well as individuals who are not (but should be)
Notifies both the member and the doctor that the member is entitled to a reduced copay
Evaluates each consumer's health situation to decide copay costs, which could mean two people who purchase the same drug could pay different copays depending on health status
The tighter option needs a decision-support system to identify the right people and create an infrastructure that ties the pharmacy benefits manager to adjudicate and administer the program once the individuals are identified.
With an increasing number of studies showing the benefits of VBIDs, why have health plans been slow to join the party?
Here are three reasons:
The program's newness combined with a lack of detailed research
The potential confusion and anger that could come from creating a system with differing copays--and the education program needed to inform people and quell complaints
For the tighter program, the initial costs to implement the program's infrastructure scares away some insurers and pharmacy benefit managers--though long-term savings are possible
There is the possibility of great advancement in VBIDs, particularly as health plans and pharmacy benefit managers find ways to better utilize technology.
There are lingering questions about actual savings, but the literature is pointing to its potential. What's needed now is for health plans and the greater healthcare system to fund further VBID research and programs to see if the theory's potential matches reality.