Maximizing Benefit Value

“Sometimes, a brand-name drug is the best drug available for treating a particular condition,” Pare agrees. “Oftentimes, because it is a brand name, it is put in a higher cost category, which may require the employee to pay a bigger copay on that drug. Perhaps that bigger copay incents the employee to not fill the prescription. So then the person doesn’t go and get the drug that they really need to manage their condition, and their condition worsens.” A value-based plan, then, might single out certain highly effective drugs for 100 percent coverage and thereby improve the overall health of the plan members.

Conversely, many conditions can be treated extremely effectively with generic drugs. The problem is that many consumers aren’t aware of them, so both they and their health insurers end up paying more for brand-name prescription drugs, even when they aren’t necessary.

Steve Burrows, director of major account sales and strategic relations at Eagan-based health insurance company BlueCross BlueShield of Minnesota, says his company has piloted a no-copay generic benefit to help overcome this roadblock. And perhaps even more interestingly, it has created a special benefit that applies to certain indigestion and allergy medications that are available in reduced doses over-the-counter.

“Often that smaller, over-the-counter dose may be just what the doctor ordered,” he says. “But if it’s not covered, the consumer will often ask the physician to prescribe the stronger [prescription] dose and cut the pills in half. So we’re experimenting with—and we’re suggesting to our larger employers, too—making an over-the-counter benefit available for selected medications.”

Customizing Services

While value-based health care has so far been limited mostly to drug coverage, many consultants and providers advocate expanding the concept to a broader range of services. Some have even piloted benefits that reflect a value-based ethos. In many cases, it’s not necessary to develop new types of coverage. Employers can realize great cost and health benefits simply by analyzing claims and choosing benefits in a way that’s most appropriate for their particular employee populations.

“Employers are much more interested than they used to be in drilling down into their claims to figure out where they are having problems,” says David Martin, president of David Martin Agency, Inc., an employee benefits consulting company in Edina. “I’m finding that our employers are not necessarily eliminating benefits in the areas where they are finding a lot of use, but instead they’re trying to manage those sectors so the use that they are getting may be more appropriately applied.”

As an example, he names bar-iatric surgery, which is becoming more and more prevalent as Americans become heavier. Instead of ceasing to cover these surgeries, he says, some employers are choosing to focus on ensuring the best possible outcomes. “Maybe they’re trying to make sure that there are appropriate follow-up services,” he explains. “Or maybe [they are supporting] other methods of weight loss that can be tried before you go right under the knife.”