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Value-based health plan adoption lagging: NEBGH panelists


NEW YORK — Insufficient price transparency and lagging health management accountability are among issues impeding adoption of value-based health plans, providers and benefit managers say.

Integration of value-based health plan designs among employers has actually contracted in the past year, declining to 11% this year compared with 15% last year, according to a March survey by New York-based Towers Watson & Co.

Additionally, the percentage of employers offering favorable cost-sharing models to their employees for using high-performing provider networks or centers of excellence dropped to 12% this year versus 18% last year, according to the survey.

Panelists at the Northeast Business Group on Health's 2nd Health and Wellness Benefits Conference in New York agreed Wednesday that while most stakeholders seem to recognize that improving the overall quality of health care is vital to the sustainability of employer-sponsored benefit programs, reforming plan designs, care delivery models and payment structures has proven exceeding difficult.

“Some employers have been aggressive about these kinds of things, but it's still a very small number,” said Laurel Pickering, president and CEO of the New York-based NEBGH. “We've been talking for years about how important payment reform and transparency are to transforming health care, but progress has been really limited.”

A key obstacle providers and employers said they must overcome is the widespread lack of consumerism and accountability for health management among individual employees.


Under traditional benefit designs — in which the employer is responsible for 80% or more of the annual premium while holding deductibles at relatively low levels — employees typically are unaware of the true cost of their coverage, let alone how their individual health management decisions can affect those costs over time, panelists said.

“If I go out at night in my car and start smashing into fire hydrants, the cost of my car insurance is going to go up and up,” said Peter Hotz, a Philadelphia-based group vice president at The Walgreen Co. and Take Care Health Systems L.L.C. “We've got to get consumers to take more responsibility for the health care services that are being provided to them.”

Marco Diaz, vice president of benefits at Thompson Reuters Corp. in New York, said even if employees have a general sense of the need to improve the quality of the health care they receive, their willingness to support value-based initiatives rarely extends to their own health plans.

“Whether it's behavioral economics, or whatever the root cause might be, employees might understand that there's a problem and that value-based plans are part of the solution,” Mr. Diaz said. “But then they say to us, 'Don't you dare change my health plan.'”

Another barrier to wider implementation of value-based health care delivery and plan designs is the limited exchange of pricing information, claim histories and other data needed to formulate a comprehensive cost-management and care delivery strategy, panelists said.


While access to pricing and hospital quality information generally improved this year compared with last year, according to Towers Watson's survey, panelists said employers, providers and insurers must broaden their communication channels to effect lasting, positive changes in care quality and cost control.

“Not only do we need transparency on pricing, but we need the claims data as well,” said Robert Brenner, chief medical officer at the Summit Medical Group in Summit, N.J. “It takes a true partnership between employers and providers, and there's been a fair amount of reluctance on this. There has to be some give at both ends.”

Other impediments panelists noted included a lack of uniformity in value-based products from insurers and employer reticence to spearhead value-based benefit design adoption within their peer groups.

More than 210 benefit managers, health care providers, insurers and consultants attended the Wednesday conference.

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