INSURING YOUR HEALTH
Like a lollipop at the dentist's, but for grown-ups
What if, instead of you making a $10 insurance co-payment for your cholesterol-lowering drug, your employer provided it - and other drugs to manage chronic conditions - for free? What if your company also paid for weight-management and smoking-cessation classes? You'd probably give your employer high marks for looking out for your health.
Now, what if your employer said that if you want certain procedures that it believes to be overused, such as an MRI scan or knee surgery, you'll have to pay $500 extra? Those employer decisions might not be nearly as welcome.
Both, however, are part of an approach to health care that shares a common perspective: the idea that consumers' out-of-pocket medical costs should be based on the value of a service to their health rather than its price.
Although relatively rare, the model is garnering increasing attention among employers, insurers and policy experts. Mercer, a benefits consulting company, found in a 2008 survey that 19 percent of employers with at least 500 employees were charging workers less for services the companies considered to have a higher value for workers' health. In addition, more than 80 percent of employers with at least 10,000 workers surveyed by Mercer in 2007 said they were interested in adopting this model in the next five years, according to a paper published in the November issue of Health Affairs. It was one of several on value-based insurance design, as it's called, in that issue.
Some provisions of this year's health-care overhaul also embrace value-based insurance principles, including the requirement that new insurance policies provide free recommended preventive services such as mammograms and colon cancer screenings starting this fall.
"It's all in keeping with the idea that some things are so valuable to health care that there should be no barriers to their use," says Niteesh Choudhry, an assistant professor at Harvard Medical School and lead author of two of the Health Affairs articles.
A landmark 1982 study showed that consumers spend less on health care as their out-of-pocket costs rise. But they scrimp not just on care that's ineffective or unnecessary but also on care they need, treatment that's highly effective at addressing their condition.
Mike Hardy had a heart attack during the lunch hour at his job at office products and services supplier Pitney Bowes nearly three years ago. The 65-year-old e-commerce manager says he was surprised to learn that the medications he needed post-heart attack - including the statin Lipitor, blood-clot preventer Plavix, a beta blocker and an ACE inhibitor to control his blood pressure - were all provided to him free. Smoothing the way even further, staff at the medical clinic at the company's Stamford, Conn., headquarters wrote prescriptions for him and the on-site pharmacy delivered the drugs to his office. "Zero barriers does make a difference," he says.
Pitney Bowes is an old hand at value-based benefit design. Since 2001, the company has been providing drugs to treat employees' heart disease, asthma, diabetes and high blood pressure, among other things, free or at reduced cost.
The pharmacy plan works in tandem with comprehensive disease management and wellness programs to help employees prevent and manage chronic conditions, says Brent Pawlecki, medical director for Pitney Bowes.
Indeed, experts agree that eliminating financial barriers isn't enough to ensure that people stick with their medication regimens, get necessary preventive screenings and seek high-value medical care. Health coaching and other support services are also critical, says Eric Grossman, a senior partner at Mercer.
So far, nearly all employers and insurers that have adopted value-based insurance benefits have done so by dangling the promise of free or cheaper benefits. But such an approach is unlikely to reduce overall health-care spending, say some experts. In fact, it may actually increase it, as employees get the care they might have otherwise skipped.