New designs for worker benefits aim to make good health less costly

    In health care, as in life, some things provide a bigger bang for your buck.

    That’s the theory behind a new way of designing — and pricing — worker health benefits. The approach, called value-based insurance design, clears away financial roadblocks to encourage workers to take steps that keep them healthy.

    Neil Goldfarb leads the Greater Philadelphia Business Coalition on Health. His group and researchers at the Jefferson School of Population Health are working up a list of “high value” health care services to lower high blood pressure, cholesterol and get more Philadelphia residents to quit smoking.

    “Most employment pharmacy plans currently have the employee paying a co-payment. Whether it’s $5 for a generic drug or $25 for a brand name drug, it’s something coming out of the employee’s pocket,” Goldfarb said.

    Under value-based pricing the things that work the best cost the least.

    “Let’s take diabetes, you would lower or eliminate the co-payments, for drugs you believe important in controlling diabetes and achieving blood sugar control,” Goldfarb said.

    Mark Fendrick, who leads the Center for Value-Based Insurance Design at the University of Michigan, says the value-based movement largely began with physicians, like him, who struggled to get their patients to take health-saving medicines.

    “I was literally begging them to take the drugs. They said they couldn’t afford it,” said Fendrick, an internist.

    You might expect value-based pricing would pit one drugmaker against another, or one device maker against competitors. But, Fendrick says, not yet.

    “They don’t actually get down to specific drugs or specific devices,” he said. “We tend to keep things in classes of services, such as drugs to treat hypertension or diabetes, to treat depression or smoking cessation.”

    The concept of value-based insurance design is already embedded in the Affordable Care Act. The health law requires private insurance firms to offer preventive care services, such as mammography and colon screening, for free to consumers.

    It’s hard to fight inertia in the insurance field, but Fendrick says the health law mandate leads the way for individual companies to restructure their benefit packages.

    In Pennsylvania, Independence Blue Cross and Highmark Insurance offer plans that incorporate core elements of the value-based idea. Companies promise gift cards or other rewards when workers complete a health assessment or other activities that their employers deem valuable to health.

    The coalition and Jefferson University are working on the research project for the city of Philadelphia using grant money from the Centers for Disease Control and Prevention.

    Goldfarb says the next step is to introduce the idea to companies around the region.

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