| Test Your Human Resources Knowledge | ||
|
| Labor Law Journal Submissions | ||
|
| Labor Arbitrators' Awards and Biographies | ||
5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: Value-based insurance design (VBID) suggests that copayment rates should be set based on the value of clinical services (benefits and costs)—not exclusively on the costs. Two recent studies reported in the journal Health Affairs investigated how VBID can be used for cost control and in consumer-driven health plans.
VBID ultimately would improve patient health and reduce costs, according to a paper entitled, “Value-Based Insurance Design,” which was published in the January 30 edition of Health Affairs. The paper was written by Michael E. Chernew, a professor of health care policy at Harvard University, Allison B. Rosen, an assistant professor of general medicine at University of Michigan, and A. Mark Fendrick, a professor of internal medicine at University of Michigan.
VBID encourages the use of services when the clinical benefits exceed the cost of the services and likewise discourages the use of services when the benefits do not justify the cost. The VBID approach advocates setting copayment rates based on the value of clinical services (benefits and costs)—not just on costs.The authors have previously published other papers advocating VBID.
Some employers already are experimenting with the VBID approach, targeting either valuable services for certain chronic diseases or patients with select clinical diagnoses such as congestive heart failure, diabetes, and asthma, with services valuable for those diagnoses. Targeting patients with certain chronic diseases provides the most favorable financial outcomes, the authors assert. For example, Pitney Bowes’ program of lower or no copayments for drugs for diabetes, asthma, and high blood pressure, implemented in 2001, had yielded net savings of $1 million one year later.
Programs at the city of Asheville, N.C., and at the University of Michigan (UM) target diabetics and cost-effective medications for their disease. These entities lowered copayments for selected medications for diabetes, the article notes. In the UM program, the pharmacy benefits management firm provides reductions at the point of service. Five years after the pharmacist-led Asheville program, including patient self-management training, was implemented, adherence to the targeted prescribed diabetes medications rose, sick time off was halved, and the medical trend was 58% lower than expected.
On July 1, 2006, UM implemented its M-Healthy: Focus on Diabetes Program for its 2,200 employees and dependents with a diagnosis of diabetes mellitus. This program reduces copayments to targeted patients (diabetics) for targeted interventions proven by medical evidence to be highly beneficial. The targeted services include several drugs that affect blood sugar, blood pressure, cholesterol, and depression and that help prevent or reduce the long-term complications of diabetes. Copayments for annual eye exams also were reduced for enrollees in the UM health care plan. Only people with diabetes, identified by pharmaceutical claims, are eligible for lower copayments.
“Existing cost-sharing arrangements often discourage the use of the high-value services encouraged by P4P [pay for performance] and disease management,” the authors concluded. “Through an alignment of incentives based on overall value of clinical services, not just cost, VBID could ameliorate this concern. By using our knowledge wisely and abandoning the archaic principle that all services must cost the same for all patients, regardless of clinical situation, we can move toward a high-value health care system for all.”
Consumer-driven health care (CDHC) has helped consumers become more conscious of the money that they are spending on health care, according to another Health Affairs perspective. The perspective, Value-Based Insurance Design and the Next Generation of Consumer-Driven Health Care, written by Troyen Brennan and Lonny Reisman, warns that Americans need to ensure that CDHC does not obstruct access to cost-effective care, but instead becomes a value-based plan design.
The authors believe that the following three components should ensure that CDHC members will be provided with cost-effective care:
The authors conclude, “We believe that this next generation of CDHC has major potential for improving quality while decreasing costs—a critical issue in our health care system. But it will take a commitment to removing inadvertent barriers to access by reevaluating benefit design; by integrating the latest evidence base issuing from medical science into insurance arrangements; and by developing information systems that can turn clinical data into useful consumer information for members and better advice for physicians.”
Both reports were published in the January 30 issue of Health Affairs. For more information, visit http://www.healthaffairs.org.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
Visit our News Library to read more news stories.
©2005-2024 CCH Incorporated or its affiliates
