Republicans and Democrats agreed on a promising health insurance reform? Unheard of. Absurd. Medicare's Innovation Center put it in motion without opposition from Capitol Hill? Unthinkable.
And it starts Jan. 1 in three states? Where do they think they are? In Sweden? In France?
Apologies to Sheldon Harnick, who wrote lyrics for “Fiddler on the Roof.” But they came to mind last week—and not just because it was the Jewish High Holy Days. A miracle of miracles seems to be happening in Washington.
During a week when 179 lawmakers including one Democrat called on the CMS to “stop experimenting with Americans' health” with mandatory payment reforms, the CMS announced without fanfare or opposition that it will allow some of the nation's leading insurers selling Medicare Advantage plans to use value-based insurance design in as many as 10 states starting in 2018.
OK, it's only a pilot. But VBID remains one of the most promising reforms to health insurance to come along in decades. Medicare beneficiaries in VBID-style plans will be paying lower co-pays and deductibles for high-value healthcare services. VBID is the antidote to the high-deductible plan trend among employers. Left on their own to pick up anywhere from $1,000 to $5,000 in first-dollar coverage, people inevitably make poor choices.
Studies have shown most patients-as-consumers, bereft of guidance beyond the internet, often use low-value services because they are cheap or they've been recommended by a specialty provider who may be driven by fee-for-service incentives. They also too often ignore high-value preventive services that might keep them from incurring huge hospital bills later on.
In an ideal VBID plan, patients would pay higher cost-sharing for services that insurers consider of little or no value. But that was the bridge too far for Congress, which had to pass a special exemption to Medicare's nondiscrimination-in-benefits clause to get this far.
The CMS is moving slowly. It carefully screened the applicants looking to set up plans in the seven eligible states. Only nine plans serving Indiana, Massachusetts and Pennsylvania made the grade. They checked to make certain the plans paid close attention to experts in identifying the high-value services eligible for low or no co-pays.
The targeted populations in those states will be small at first. But backers hope the program will prove popular among the third of Medicare beneficiaries already in HMO-style plans.
The conditions targeted are some of the biggest cost-drivers in Medicare. They include diabetes, chronic obstructive pulmonary disease and congestive heart failure along with patients with past stroke, hypertension, coronary artery disease and mood disorders.
People with these chronic conditions in VBID plans will have a different benefit plan than other Medicare beneficiaries. Diabetics and pre-diabetics may be given annual eye exams free of charge, for instance, since deteriorating vision is an early warning sign of poorly controlled diabetes.
The plans will also use lower co-pays to channel beneficiaries to high-value physicians, hospitals, ambulatory surgical centers and skilled-nursing facilities “based on their quality and not solely based on cost.” A physician who has consistently demonstrated the ability to keep their diabetic patients' HbA1c under control, for instance, will be more likely to get a VBID enrollee's business.
VBID plans won't save money right away, although analysts suggest they will cut costs for congestive heart failure patients in the first year through better care coordination.
Private insurers that have experimented with VBID plans with their under-65 population have reported reduced overall costs on chronic-disease patients as early as year three.
It's important to take the long view. The buzzword “consumer-driven medicine” gets thrown around a lot and is considered an important component of “value-based care.”
Yet where are the price signals that enable patients to understand what constitutes real value in healthcare? VBID plans—familiar to those who already have lower co-pays for generic drugs—is the best idea yet for sending those signals for the full range of healthcare services.
