Dr Mark Fendrick Outlines Progress in VBID

There has been tremendous momentum in the value-based insurance design movement in the US healthcare industry, but there are 3 specific ones that are noteworthy, according to A. Mark Fendrick, MD, professor of internal medicine at the University of Michigan School of Medicine, director of the Center for Value-Based Insurance Design at the University of Michigan, and co-editor-in-chief of The American Journal of Managed Care.

Transcript (slightly modified for readability)

What is the latest in value-based insurance design (VBID)

So the value-based insurance design movement has tremendous momentum in many areas, but there are 3 specific ones that I think are worth noting. First, is our 8-year advocacy to allow VBID principles into Medicare Advantage space. And we were absolutely thrilled to see CMS through the innovation center at the Centers for Medicare and Medicaid Innovation announce a VBID demonstration test in 7 states in 7 conditions in Medicare Advantage plans.

To change the nondiscrimination aspect of Medicare in that everyone has to have the same benefit design was an extraordinary challenge even though people understood that the delivery of precision medicine shoudl have precision benefit design, it required a multistakeholder, bipartisan effort to convince CMS, and the US Congress to back this idea. And we are absolutely over the moon with the fact that on January 1, 2017, a large number of health plans in 7 states will make this happen.

Another key initiative in the VBID space is in the commercial sector, which as tried to implement value-based insurance design principles in the fastest growing type of health plan in the US, which is health savings account high-deductible health plans (HSA-HDHPs). It turns out an unintended consequence of the initial guidance for these types of plans did not allow any services besides some highly selected primary preventive services like screening and shots and counseling to be covered in these plans before the deductible was met. Sojust about all of the high-value services that we've been emphasizing in VBID in common chronic diseases are not covered at all in HSA-HDHPs until people meet sometimes a $5000 individual deductible and sometimes a family deductible of over $10,000.

So we have put togeher this wonderful strange bedfellow coalition of manufacturers, consumer advocates, policy makers, hospitals, health scientist companies, who actually work very closely with the US Congress and the Internal Revenue Service within the Department of Treasury to actually expand the definition of what services might be included in a pre-deductible safe harbor, such as drugs for chronic diseases—HIV, depression, diabetes—or diagnostic tests—like cholesterols or blood counts—or certain services—like a diabetic eye exam or physical therapy after hip replacement. So we're very pleased that it is our real hope and expectation that as we were able to influence the Obama administration to allow VBID in Medicare, that we will also be able to make a very good point to allow VBID in HSA high-deductible health plans.

The last, and somewhat timely for our work in The American Journal of Managed Care, is where does VBID fit in a very high-profile, controversial discussion about high-cost, high-value specialty drugs, such as those that treat rheumatoid arthritis, cancer, and now hyperlipidemia. We don't set the prices of these things, we understand that this is an area of great controversy and consternation—what we care about in the world of VBID is that patients get the right drug, by the right provider, in the right time in their disease at the right price. And while we strongly support many of our health plans that we work closely with to recommend strongly through financial and other incentives to get individuals to use first-line, low-cost agents, such as generic drugs, it's important for people to understand that in most chronic diseases, diseases change over time, and multiple therapies are often needed.

So what we have put forth is an idea called "Reward the Good Solider," which is something like step edit with co-pay relief. Which means if you have a disease that has a first-line, low-cost therapy, and you take it as you should, but the outcome that the patient and the clinician want doesn't happen—your blood pressure is not lowered, your blood sugar is not lowered, your joints don't feel better in rheumatoid arthritis—that you actually get a co-pay reduction on what is now considered very high-price, often out-of-reach branded drugs to treat these conditions. So along the line of clinical nuance, we don't recommend first-line of these high-cost drugs for everyone. But at the same time we want to make sure that when the clinical needs arise to need a high-cost therapy, that the patient actually gets rewarded for doing the right thing and understanding that sometimes there's no option in the low-cost drug category.