Disease Management

Plans Experiment With 'Value-Based' Benefit Designs, but Cite Operational Challenges

Reprinted from the March 5, 2007, issue of HEALTH PLAN WEEK (formerly Managed Care Week), the industry's leading source of business, financial and regulatory news of health plans, PPOs, and POS plans.

Some health plans and employers are beginning to experiment with "value-based" benefit designs, in the hopes that lowering the costs of preventive services and drug copayments for certain at-risk patients may lead to increased compliance and fewer hospitalizations. But others remain wary, citing operational difficulties such as identifying appropriate patients and offering different cost sharing for the same benefit.

WellPoint, Inc. said on Feb. 27 that it is offering blood glucose meters from Roche Diagnostics and LifeScan, Inc. at no cost to its members with diabetes. The program is open to all diabetic members who monitor blood-sugar levels. The health plan says that physicians will be notified in writing about the voluntary program and will be sent educational materials about the available glucose meters. About 1 million of its members are eligible for the program, and they were identified using integrated medical and pharmacy data, according to Brian Sweet, chief clinical pharmacy officer at WellPoint.

"There is a real need for additional testing for our members, which is not unique to WellPoint," he says. "Some members don't test due to financial constraints, or because they don't know how to use the device, or because they don't feel that it's necessary." In addition to improving members' health, Sweet says the health plan expects over the next two to five years to see cost savings stemming from fewer emergency department, hospital and physician office visits.

While WellPoint's program offers a free medical device to members, most other value-based approaches reduce or eliminate copayments for certain prescription drugs. For example, Blue Cross and Blue Shield of Michigan subsidiary Blue Care Network offers reduced copays for seven brand-name asthma control medications, including Schering-Plough Corp.'s Asmanex and GlaxoSmithKline's Flovent. The insurer is hoping to increase compliance with control drugs, reduce dependence on rescue medications and eliminate some hospitalizations.

"People are starting to understand that there is something potentially dangerous about preventing patients from accessing services that would not only benefit them from a clinical perspective, but also end up reducing costs as far as preventing hospitalizations," says Lonny Reisman, M.D., CEO of ActiveHealth Management, Inc., a health management and data analytics subsidiary of Aetna, Inc.

ActiveHealth administers a program that offers employees of Marriott International, Inc. differing copays depending on their level of benefit for drugs that treat heart disease, diabetes and asthma. The firm analyzes data on approximately 100,000 employees to select which ones could potentially gain from the service. Reisman tells AIS that "several thousand" employees have benefited so far from the year-old program, but would not discuss any specific results until the findings are published in peer-reviewed journals.

Administration Challenges Give Plans Pause

The complexity of administering value-based benefit designs makes health plans cautious, says Paul Ginsburg, president of the Center for Studying Health System Change and co-author of a study, "Benefit Design Innovations: Implications for Consumer-Directed Care." Ginsburg says that plans implementing these programs face challenges such as retooling information systems, rewriting contracts and communicating varying benefit levels to enrollees.

In the study, Ginsburg describes Pitney Bowes Inc.'s value-based benefit designs. The firm reduced copays for all drugs that treat diabetes, asthma and hypertension to the lowest benefit tier, cutting the average cost of a 30-day prescription refill by 50% to 85%. Pitney Bowes says it has experienced cuts in both direct medical costs, including emergency department visits and hospitalizations, and indirect costs such as sick-leave and disability rates.

Some plans institute an across-the-board reduction of copays for certain classes of drugs, while others lower costs for patients with a specific diagnosis. Based on interviews with health plans and large employers, Ginsburg tells AIS that he does not see a trend toward either approach, but notes that there are operational advantages in linking copay reductions directly to drugs.

Diagnostic data on outpatient claims often are not reliable, and payment rarely depends on what diagnosis a physician records, he says. The rationale for linking to a class of drugs is that "there are a lot of drugs that are very specific to particular diseases, so if someone is taking that drug, you have much more confidence that they have that disease," he adds.

PBMs also may prefer targeting a class of drugs instead of specific members. "From an operational standpoint, it is simpler for us to approach a class of drugs rather than people who carry a certain diagnosis," says James Hartert, M.D., chief medical officer and senior vice president of PBM Prime Therapeutics, LLC. In November, the firm released studies showing that patients with lower copays for generic statins and antihypertensives stayed on their medications longer than did those without a discounted copay.

Identifying members taking a certain class of drugs is faster, since a PBM can adjudicate payment of drugs in real time, explains Hartert. For a medical diagnosis, however, there is often a time lapse of 30 to 90 days before that information is relayed to a health plan, he adds.

Reisman notes that identifying patients also helps exclude those who may suffer from drug interactions. The ActiveHealth program flags these patients and does not offer copay discounts to them. As an example, he cites Bristol-Myers Squibb Co.'s diabetes drug Glucophage, which is contraindicated for people with kidney failure.

MCOs Consider Requiring DM Participation

There is a debate as to whether health plans should require members to join disease management (DM) programs as a requirement for receiving lowered or eliminated copays. The ActiveHealth program is available to eligible employees regardless of their participation in a DM program, says Reisman. Ginsburg adds that requiring members to enroll in a DM program to qualify for lower payments may serve as an incentive for them to do so. Although it is not a feature of the ActiveHealth program, Reisman contends that DM members should get an even bigger discount than those who are not, as an incentive to stay in the programs.

"There is a paradox of having a nurse in a disease management program talking to a patient about how important it is to take their medicine, when in reality the patient simply can't afford to take it," he says. "If we're going to encourage them to take these medications in the context of a disease management setting, why don't we give them the drugs for free or at a significant discount?"

Hartert says that although his PBM's clients are intrigued by value-based designs, none have yet implemented a program. Some clients raise concerns about the equitable administration of insurance benefits. "Are certain disease conditions more worthy than others," he asks. "Should people in disease management programs be given preferred status?" Some health plans may be waiting to see how these issues play out in the marketplace, he adds.

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