Eliminating Low Value Care While Incentivizing High Value Care

July 17, 2020

On July 16, the Florida Alliance for Healthcare Value held the initial session of its first-ever virtual Summer Education Series which was created in lieu of the Annual Conference this year due to COVID-19. The two-hour session featured two dynamic speakers who focused on sharing innovative ways to drive high-value care.

COVID-19 Pandemic Highlights the Need for Value-Based Insurance Design

A. Mark Fendrick, MD, Director of the University of Michigan Center for Value-Based Insurance Design, spoke first and discussed the need for new solutions to protect consumers, reward providers and preserve innovation, especially in light of COVID-19. He began by talking about the weaknesses of the most commonly used strategy to reduce healthcare costs in recent years — consumer cost-sharing — and how it is a “blunt” instrument in that patients pay more out of pocket for all care regardless of clinical value.

Dr. Fendrick also explained that while 40 percent of Americans don’t even have $400 in the bank, the average individual annual health insurance deductible now ranges from $1,200 – $1,850.

“The growth in high deductibles is what keeps me up at night,” said Dr. Fendrick. “Americans do not care about healthcare costs; they care about what it costs them. If you make people pay more, they buy less.”

Instead of high-deductible plans, Dr. Fendrick proposes using a clinically-driven approach that encourages consumers to use more high-value services that will make them healthier, but discourages the use of low-value services that provide little benefit and may carry high costs. Examples of identified low-value care included Vitamin D screening tests, diagnostic tests before low-risk surgery and branded drugs when identical generics are available.

“There is enough money in the US healthcare system. We just spend it on the wrong services and in the wrong places,” he explained. “Clinically-driven plan designs like V-BID X that reduce spending on low-value care create headroom to allocate spending to high-value services without increasing consumer’s premiums or deductibles.”

Dr. Fendrick went on to explain how the COVID-19 pandemic has uncovered a flaw in benefit designs that don’t provide affordable coverage for critical services, including care to treat COVID-19 related illnesses. He believes the time has come for public and private health insurers to revisit their benefit designs to provide better access to essential services and deter the use of low-value care. His three main action items include:

  1. Expand pre-deductible coverage/reduce consumer cost-sharing on high-value clinical COVID-19 related care and other essential chronic disease services.
  2. Identify, measure and reduce low-value care to pay for more generous coverage of high-value care.
  3. Implement clinically-driven plan payment reform, technologies and benefit designs that increase use of high-value services and deter low-value care.

“A clinically nuanced approach brings people together and has rare bipartisan and multi-stakeholder support,” concluded Dr. Fendrick. “There are a large number of plausible combinations of services and cost-sharing strategies that could fit different needs and goals, depending on the carrier and market.”

Mike Stubee, Assistant Vice President of Managed Care at Orlando Health, asked Dr. Fendrick how healthcare providers can enhance the narrative of VBID. He responded that their approach should be “pay clinicians more for providing services that are known quality metrics, such as diabetic eye exams and colonoscopies for those between 50-75, and hold us accountable for those things we shouldn’t be doing like low-value pre-operative testing.”

Click here to view Dr. Fendrick’s presentation and other V-BID Center resources.

Unique Virginia Public-Private Partnership Collaborates to Accelerate Health Care Value

Beth Bortz, MPP, President and CEO of the Virginia Center for Health Innovation, also spoke at the first session of the virtual Summer Education Series and shared her experiences creating a Virginia Dashboard to identify and measure key healthcare value indicators as well as to prompt action for improving healthcare value throughout the state. She also discussed a new statewide pilot project to reduce the provision of low-value health services in Virginia. This three-year initiative will employ a two-part strategy to reduce seven identified sources of provider-driven, low-value services as well as prioritize a set of consumer-driven measures for phase two:

  1. Clinical Learning Community — Health system and physician partners (1,000+ practice sites and nearly 7,000 clinicians) are working together to reduce the seven provider-driven measures.
  2. Employer Task Force — A group of 17 Virginia employers are working together to increase their knowledge of low-value care and identify consumer-driven measures to drive change through benefit design and employee education.

The work of these two teams will culminate in a combined conference and development of A Virginia Plan to Improve Health Value.

“Our goal is that within three years, we will produce a 25% relative reduction in seven low-value care measures that are provider-driven while prioritizing up to six consumer-driven measures for our next phase of work,” explained Bortz.

She believes customized, quarterly Provider Performance Data Reports provide the key to success of the Clinical Learning Community component. The aim is to increase clinician competence in reviewing performance reports and implementing targeted intervention to improve outcomes.

“Our approach with talking to healthcare providers about our findings is not a ‘gotcha’  or a ‘blame game’ but instead to share our findings and work with them to drill down into the data and identify opportunities for improving the value of care provided,” said Bortz.

The presentation concluded with a discussion on replication of the project in other states and the keys to success with this type of initiative. Florida Alliance for Healthcare Value Board member Mark Weinstein, who serves as the President and CEO of the Independent Colleges and Universities Benefits Association (ICUBA), asked how Florida could prepare to do similar work. Bortz emphasized that the two most important components are a champion and “coalition of the willing” like the Florida Alliance for Healthcare Value, and a strong back-end data source. She also emphasized the importance of provider buy-in from both the clinical side and the chief financial officer as well as choosing and focusing on just a few low-value measures.

Click here to for more information

Thank you to our Summer Education Series sponsors: Amgen, Centivo, Genentech, Heron Therapeutics and Signify Health.