Recording and written materials of AIS's audioconference on September 18, 2008

Finding ‘Value’ in Value-Based Rx Benefits: ROI Strategies for Health Plans and Employers

Interest in “value-based insurance designs” (VBIDs) is exploding. Health plans and self-insured employers have moved beyond their exploration of the concept and are now implementing VBID programs in rapidly increasing numbers. The theoretical payoff: Lowering financial barriers to “high value” pharmaceuticals will boost patients’ Rx compliance, thus avoiding more expensive medical costs down the road. But how does that concept play out in reality? If you eliminate patient copayments on high-value drugs — such as asthma controller therapies or cholesterol-lowering agents — will you actually see a significant return on investment in the form of fewer patients ending up in the hospital? What other methods are there for measuring the ROI of a value-based program?

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The value-based insurance design concept grew out of a concern that high drug copays reduce utilization of valuable therapies, which in turn results in worse health outcomes and higher medical expenses. Under the VBID concept, the more clinically beneficial a drug is for a patient, the lower that patient’s cost share would be. The result? Greater Rx utilization and lower medical costs.

Some industry experts, however, contend that such an ROI under a value-based program can be elusive. The loss of copay revenue may not be recouped in avoided trips to the doctor and hospital, and financial incentives alone may not be enough to improve Rx compliance, they argue. But early adopters of VBID, including mail-services firm Pitney Bowes Inc., tell a different story. And other supporters of the concept contend that ROI includes more than the medical bottom line, and can be realized through improved employee attendance and productivity.

Two leading experts on value-based programs offer their strategic insights on how health plans and self-insured employers can get the best “value” out of their VBID program. Key ROI strategies discussed in detail include:

• Best practices for implementing VBID at health plans and self-insured companies.
• Low-hanging fruit — therapeutic categories that hold the most promise for a value-based approach.
• Lessons of early VBID implementers — what works, what doesn’t work?
• Key pitfalls to avoid when launching a new VBID program.
• Suggested ways to measure ROI.
• The future of VBID, including remaining obstacles to broader acceptance.

 

JACK MAHONEY, M.D., is corporate medical director and global health care management director at Pitney Bowes Inc. He also is chief medical officer at the recently formed Center for Health Value Innovation. In his role at Pitney Bowes, Dr. Mahoney has oversight of all clinical support services. He is responsible for strategic health initiatives such as designing health benefits for employees and integrating disability and disease management and wellness initiatives. Prior to joining Pitney Bowes, Dr. Mahoney was vice president of integrated health management at Aetna Inc., where he was responsible for integrating all health-related employee programs within Aetna to achieve improved productivity and effectiveness of employees through organizational and individual health. Dr. Mahoney received his undergraduate degree from Boston College and his medical degree from the Medical College of Virginia. He also received a master’s degree in public health from the University of California, Los Angeles.

BRIAN SWEET, chief pharmacy officer at WellPoint, Inc., is responsible for overseeing all clinical pharmacy services of the 36-million-member health-benefits company, headquartered in Indianapolis. Mr. Sweet is involved with developing WellPoint's clinical product line, aligning strategic partnerships with pharmacy based organizations, and overseeing pharmacy programs for WellPoint nationally. Prior to joining WellPoint, Mr. Sweet had experience in a staff-model HMO, an independent practice association (IPA) HMO, and in the PBM industry. Mr. Sweet also has authored formulary and clinical pharmacy intervention program successes in various managed care settings. He received his master’s of business administration from the State University of New York at Buffalo School of Management in May 1994, and his bachelor’s of science in pharmacy from the State University of New York at Buffalo School of Pharmacy in May 1988.

Moderator: Neal Learner, managing editor of AIS’s Drug Benefit News.