West Health Policy Center launches study with Harvard and University of Michigan on expanding insurance options for chronically-ill patients

WASHINGTON, Feb. 13, 2014 /PRNewswire/ -- The Gary and Mary West Health Policy Center is spearheading a research study by leading academic researchers at Harvard University Medical School and the University of Michigan Center for Value-Based Insurance Design. The study will determine if insurance plans can be specifically tailored to individuals struggling with chronic illnesses to encourage the use of high-value tests and treatments so that both the individual and the health plans save money. If so, the study will inform future research concerning whether these savings could ultimately translate to federal health plans such as Medicare and Medicaid.

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"The West Health Policy Center is pleased to bring together some of the brightest minds in the country to study the benefit of appropriate incentives in value-based insurance design for patients struggling with chronic illness," said Joseph M. Smith, MD, PhD, FACC, chairman of the West Health Policy Center board of directors. "This research will increase our understanding of the potential role of value-based insurance design to lower overall healthcare costs by helping chronically ill patients choose higher value healthcare services."

As healthcare costs continue to consume a higher percentage of employer and household budgets, more employers are adjusting their benefit offerings to include high deductible health plans. These plans typically have lower monthly premiums than traditional plans, but institute a significant deductible that enrollees must pay before comprehensive coverage is available. A tax free health savings account (HSA) or health reimbursement account (HRA) is often attached to these plans and employers may contribute seed money to assist employees with the healthcare spending. While these plans can motivate employees and their families to research and seek high-quality care at a competitive price, for those individuals diagnosed with a chronic condition, satisfying the deductible before coverage of necessary treatment services may impact adoption of these plans.

"Changes in benefit design are likely to be an important part of future cost containment strategies," said Michael E. Chernew, PhD, Leonard D. Schaeffer Professor of Health Care Policy at Harvard Medical School. "It is important that new benefit options do more than just shift costs to patients, but instead also encourage efficient use of care. We are privileged to be working with West Health Policy Center to study ways to build smarter insurance products."

"We are pleased to work with the West Health Policy Center and Harvard on this important set of research projects that will provide key pieces of information to determine what a high deductible health plan of the future may look like," said A. Mark Fendrick, M.D., director of the University of Michigan Center for Value-Based Insurance Design.

V-BID CONCEPT AND CHRONIC DISEASE SUPPORT:

Value-Based Insurance Design (V-BID) is driven by the concept of clinical nuance, which recognizes that medical services differ in the benefit provided and that the clinical benefit derived from a specific service depends on the patient using it, as well as when and where the service is provided. V-BID aligns consumer incentives with clinical evidence by reducing barriers to high-value services and providers and discouraging the use of low-value services and providers.

Currently, chronically-ill populations face challenges when enrolled in high deductible plans. For example, a person living with diabetes enrolled in a high deductible plan must pay out-of-pocket for medically necessary treatment such as blood pressure and cholesterol checks, certain medications, eye and foot exams, and glucose monitoring supplies until the deductible is reached and insurance coverage begins. Modifying a high deductible plan to lower the patient's out-of-pocket cost for clinically recommended diabetes treatment services has the potential to reduce health complications and overall spending. Maintaining the deductible structure for medical goods and services not affiliated with diabetes management will continue to motivate employees and their families to research and seek high-quality, necessary care.

The study will develop and price hypothetical high deductible health plans that incorporate V-BID principles and estimate the potential impact on enrollment in such plans by individuals with chronic conditions. The study hopes to show that chronically ill individuals will find these plans attractive and lead to better health outcomes and lower overall spending on their health care. Results are expected in the second quarter of 2014. Leading researchers contributing to the study include:

Michael E. Chernew, PhD, Leonard D. Schaeffer Professor of Health Care Policy at Harvard Medical School.  Dr. Chernew's research examines several areas related to controlling healthcare spending growth while maintaining or improving quality of care.  His work on consumer incentives focuses on V-BID, which aligns patient cost sharing with clinical value. Dr. Chernew is also the Vice Chair of the Medicare Payment Advisory Commission (MedPAC), an independent agency established to advise the U.S. Congress on issues affecting the Medicare program.

A. Mark Fendrick, M.D., Professor of Internal Medicine in the School of Medicine and a Professor of Health Management and Policy in the School of Public Health at the University of Michigan. Dr. Fendrick currently directs the Center for Value-Based Insurance Design at the University of Michigan, the leading advocate for development, implementation, and evaluation of innovative health benefit plans.  His research focuses on the clinical and economic assessment of medical interventions with special attention to how technological innovation influences clinical practice, benefit design, and healthcare systems.

Stephen T. Parente, PhD, Minnesota Insurance Industry Professor of Health Finance and Insurance in the Department of Finance in the Carlson School of Management at University of Minnesota where he specializes in health economics, health insurance, medical technology evaluation, and health information technology.

ABOUT THE WEST HEALTH POLICY CENTER

The Gary and Mary West Health Policy Center is a nonpartisan, non-profit organization seeking to lower healthcare costs by researching innovative, patient-centered policy solutions that deliver the right care at the right place at the right time. Launched in January 2012, the Washington, D.C.-based West Health Policy Center is unique: it does not accept outside contributions, does not make political donations, and has no financial interest in the outcome of any policy it explores. Solely funded by the philanthropic Gary and Mary West Foundation, the Policy Center focuses on identifying implementable policies that will lower the cost of healthcare while preserving quality and access. It is one of four entities under the West Health initiative with a shared goal to reduce the cost of healthcare, including the Gary and Mary West Health Institute, a nonprofit medical research organization; the Gary and Mary West Health Policy Center; the Gary and Mary West Health Investment Fund, which invests in mission-aligned companies; and the West Health Incubator, which provides investment and expertise to mission-aligned businesses. For more information, find us at www.westhealth.org and follow us @westhealth.

SOURCE Gary and Mary West Health Policy Center

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