The United States spends more on healthcare per capita than any other nation. As healthcare costs have continued to increase over the years, out-of-pocket payments have also increased – almost doubling between 2012 and 2015. In part this trend reflects the expansion of high-deductible health plans (HDHP), which have been a popular solution to address rising healthcare costs.
According to research from America’s Health Insurance Plans (AHIP), nearly 22 million Americans enrolled in a health savings account-qualified HDHP in 2017, almost 10 percent more than the year prior. And according to a 2018 survey by the National Business Group on Health, 39 percent of larger employers only offer a high-deductible health plan option.
As cost-sharing has increased, more evidence is emerging that consumers may put off care as a result, which can cause larger issues down the road. So as consumers have taken on more financial responsibility for their healthcare, payers and policymakers have explored solutions designed to simplify how consumers use their benefits and put consumers at the center of their care.
In 2010, the passage of the Patient Protection and Affordable Care Act (ACA) mandated preventive care with no cost-sharing for plans captured by the law, including annual wellness check-ups, flu vaccines, and certain screenings. And in the last decade, federal regulators, employers and health plans have explored the use of value-based insurance design (VBID) to encourage consumers to use high-value care while avoiding low-value services. These efforts aim to reduce costs for individuals, build and strengthen the relationship between patients and their primary care providers, and improve outcomes by supporting the health of the whole person.
Value-Based Insurance Design (VBID) Models
VBID removes or reduces consumer cost-sharing in the form of out-of-pocket costs for high-value services – such as primary care visits – and retains or increases out-of-pocket costs for those low-value services that provide little to no health benefit. In some cases, low-value services – such as costly screenings for low-risk individuals, a head scan for simple dizziness, or unnecessary lab tests – may actually harm an individual’s health. Additionally, VBID may give individuals incentives to use certain healthcare services that can help providers detect and treat potentially negative health events at an early stage before they lead to more serious issues that can result in costly procedures and even hospitalizations.
These value-based models of care have been tested in public and private settings and with specific patient populations, including those with diabetes or chronic obstructive pulmonary disease (COPD). VBID is also one of the ways Anthem is increasing affordability and making consumers more active participants in their care.
AJMC Study: Evaluation of Value-Based Insurance Design for Primary Care
To better understand the potential health and financial benefits of VBID models for consumers, we evaluated the impact of a large employer’s decision to remove employee and dependents’ out-of-pocket costs for primary care physician (PCP) visits. The study, Evaluation of Value-Based Insurance Design for Primary Care, was published in the American Journal of Managed Care (AJMC) and compared six years of data for their commercially insured members of Anthem’s affiliated health plans who had no out-of-pocket costs for PCP visits (“VBID cohort”) with those who were responsible for those costs (“comparison cohort”). As part of the study, we measured how often consumers visited their physicians, total healthcare spending, out-of-pocket costs and more.
Key Findings: Evaluation of Value-Based Insurance Design for Primary Care
The findings of the study revealed that by removing out-of-pocket costs for PCP visits, out-of-pocket costs for all physician visits decreased by nearly 13 percent annually for those in the VBID cohort. For the comparison cohort, who did not see a similar out-of-pocket benefit change, out-of-pocket costs for all physician visits increased by nearly 10 percent. Those in the VBID cohort also had a significant reduction in the number of outpatient and emergency department (ED) visits for conditions that could be treated with a primary care visit, compared to the comparison cohort. Total medical spending for the VBID cohort increased at a slower rate, translating to $12 in savings per member per month for the consumer and health plan compared with the comparison cohort.
“Primary care utilization improves care continuity, intensifies the patient-provider relationship, emphasizes potential disease prevention, and improves the management of existing conditions, which can reduce unnecessary specialist care, hospitalizations and emergency department visits.”
– American Journal of Managed Care, Evaluation of Value-Based Insurance Design for Primary Care
The Potential Benefits of VBID for Employee Populations
By removing or reducing cost-sharing for primary care visits, employers can improve affordability for employees and help to drive down the use of high-cost medical services, including ED visits and hospitalizations. Eliminating potential cost barriers to primary care can allow employees to work more closely with their physicians to address their personal and sometimes complex health needs earlier, through more cost-effective strategies that improve outcomes and reduce the need for high-cost services later on.
The Potential Benefits of VBID for Employers
In a competitive labor market, employers can use VBID models to further differentiate themselves to prospective employees based on the benefits they provide. By reducing or completely removing out-of-pocket costs for primary care visits, employers may be able to attract more talent and potentially support a healthier workforce. For those employers who do explore VBID, consumer education is critical to ensure that employees know about the primary care and other benefits that are available to them at no cost.
At Anthem, we recognize that removing financial barriers to primary care can help us deliver a more positive and accessible healthcare experience that puts the consumer at the center of everything we do. We are committed to evaluating and implementing innovative solutions that make it easier for consumers, providers and employers to navigate the healthcare system and manage costs. We will continue to explore how VBID can help us control costs, strengthen the patient-provider relationship and emphasize the value of prevention.