Are you ready for a value-based benefit design?

By Bart Halling

If you are indeed interested in incorporating a benefit program with successful value-based outcomes, the first step should be to perform an evaluation or assessment of your organization’s readiness for change.

Organizational Culture on Health

There are several critical elements and qualities to have in place in order to implement a successful program. One of the first is an evaluation of your organizational culture as it relates to health. You can start by assessing your corporate beliefs. Does the organization believe in creating a connection between health and wealth? Do you think accountability should be shared among all constituents of care, including providers, employees, the insurance/health system and the organization itself? Does physical employee “vitality” hold a valued asset position in your organization?

Fundamentally aligning health management goals with business goals should be considered as well as the long-term health plan strategy. Do you have the capacity and willingness to look at your strategies in a multi-year, phased approach?  How do the business cycles in your industry help or hinder your ability to create a benefit strategy horizon?

As with any strategic initiative, an additional key factor to measure is targeted senior leadership buy-in. Support at critical levels of the organization is important to provide the necessary resources, financial commitments and time to ensure the program is successful, creating tangible results.

Data Analysis and Health Strategy

Beyond having the desire and organizational buy-in for change, employers can benefit greatly by performing a fact-based analysis to determine if a change is truly warranted. Do you have the ability to capture and analyze data that depicts your total health care costs and trend? If so, does the data provide a clear understanding of the leading health conditions that impact the productivity of your employee population?

If that type of information is not currently in place, implementing or upgrading your data capture and analysis capabilities would be a valuable initial step regardless of how seriously you are considering a move toward a VBBD.

In addition to basic medical claims data and pharmacy utilization, there are a variety of other informational channels – such as clinical health risk assessments and biometric screenings – that can help you better define the health status of your workforce and plan members, including your at-risk population.

Depending on your health strategy to date, you may have already implemented or considered implementing one or more care management programs, such as case management, disease management or a health and wellness plan offering. Perhaps some type of consumer-driven health option has also been considered or incorporated.  Each existing program and their relative levels of success dictate the current environment within which you make future strategy decisions and create new benefit direction.

Assessing Where You Are

At this point, you may be wondering exactly where you fit in the process of developing a benefits plan that meets your value-based goals. In most cases, particularly with self-funded, employer-sponsored plans, there is no one-size-fits-all plan model. That said, there are various steps or stages of plan development that can help give you a better gauge of where you’re at.

Here’s a quick overview of a five-step “roadmap” that can help you navigate your way toward a value-based benefit strategy. Keep in mind this is only an example designed to be suggestive, thought provoking and at the same time, flexible:

➢    Step 1 – Basic Plan: For the purposes of this article, we will consider a basic plan to be a traditional high premium/low deductible arrangement that would include utilization management (UM) and case management (CM) with a limited preventive care offering. Most organizations falling into this category have barely “dipped a toe” into the waters of a CDH or VBBD.
➢    Step 2 – Introduce FSA/Wellness Program: At this second-year stage, an organization is beginning to test the CDH waters by introducing a basic flexible-spending account (FSA) along with a more expansive preventive care program and possibly some introductory member incentives to go along with the traditional plan. In addition to UM/CM, the preventive plan could grow to include a clinical health risk assessment (CHRA), a maternity management program, some type of wellness program and a disease management prevalence analysis. Small incentives might be an option to encourage participation in the CHRA (40 percent to 50 percent participation in the first year would be a goal) along with a small reward for maternity management participation.
➢    Step 3 – Introduce HRA/HSA, DM Program and “Pay for Participation”: After participants have gotten a small taste of the CDH experience, this step will take it to another level with the introduction of a qualified high-deductible health plan with either a health reimbursement account (HRA) or health savings account (HSA) or both. A traditional plan might still be an option, but the list of products and services are increased along with incentives. The biggest addition in terms of products and services might be a disease management program with other programs, such as biometric screenings and personal coaching added to the mix. Biometric and coaching incentives can be added to encourage participation along with member education and decision support tool incentives to assist plan participants in gaining a better understanding of the expanded program offerings and services.
➢    Step 4 – Full Replacement CDH and Continued Pay for Participation: At this point, an option will be to eliminate the traditional plan and make many of your incentives optional. It may also be the perfect time to introduce optional value-based rewards for things such as condition-specific care compliance, improved health status, expanded preventive care usage, use of quality/efficient providers and engagement in targeted messaging programs.
➢    Step 5 – Value-Based Benefit Design and Transition to Pay for Results: By now, you are most likely several years into your plan, and pursuing many of the tactical initiatives outlined in Step 4. The biggest difference in this final stage is that the value-based rewards should be included in the plan vs. just being an option. An expanded preventive care offering may also be introduced based on age, gender and health status.

In summary, a successful value-based benefit design is as dependent on an organization’s readiness to change as it is the willingness of individual plan members to participate and modify their behavior regarding health and wellness. To truly incorporate a plan that pays for results rather than simply participation, an employer needs to eliminate barriers that may keep people with unhealthy lifestyles from moving down a healthier path. An additional objective should be to keep your healthy team members healthy and develop a well-rounded program that engages all employees and plan members, including those that might not be as motivated by financial incentives.  Employee population vitality as a goal in itself pays dividends across the metrics that many of us value in our particular line of business.  Value-based benefit strategies and a commitment to build out programs that drive for results can open up avenues for your business that lead directly to a deeply ingrained culture of health.

Biography

Barton Halling is Vice President of product management for consumer driven and emerging markets for UMR, the third-party administrator (TPA) unit of UnitedHealthcare.  Halling leads efforts to aggressively leverage the unique competitive position of UMR,—with core functionality and capabilities at the convergence of the health and wealth industries.