VBID Summit: Addressing Underinsurance With a More Clinically Nuanced Approach

Underinsurance is a byproduct of the many changes being brought to the healthcare system, said Robert W. Dubois, MD, PhD, chief science officer and executive vice president of the National Pharmaceutical Council.

During the VBID Summit, hosted by the University of Michigan Center for Value-Based Insurance Design (VBID), he discussed the recently increasing phenomenon where consumers are insured, but not properly covered and how to reduce the underinsurance rate.

According to Dubois, underinsurance could be resulting from a number of changes:

• Formulary restrictions, where the formulary does not have what the patient needs or the drug is in a higher tier
• Provider payment changes, such as bundled payments that create a new set of incentives for physicians
• Guidelines and pathways that are typically not clinically nuanced in many cases

“There are many sources to the problem, and we can’t solve it unless we think about it in that way and earmark solutions for each one,” Dubois said.

Gary Bacher, co-director of the Smarter Health Care Coalition, pointed out that before the Affordable Care Act, underinsurance was often called medical bankruptcy. However, new benefit design created to try to balance affordability and coverage have resulted in higher cost sharing for many services and products in healthcare. Cost sharing “isn’t intrinsically bad,” but where cost sharing is placed is important.

“Is it nuanced to recognize high- and low-value care?” Bacher asked.

The underlying issue of the discussion is the overall high cost of care, said Michael E. Chernew, PhD, the Leonard D. Schaeffer Professor of Health Care Policy and director of the Healthcare Markets and Regulation Lab in the Department of Health Care Policy at Harvard Medical School.

There is a lot of high-value care, but also a lot that makes care expensive that isn’t high value, Chernew said. While the United States has been successful in provider better care, it has struggled to finance the care while wanting to provide everyone with access to the same care.

“The basic tension is that it would be nice if we could just have care free for everyone,” he said.

As cost sharing rises, an audience member posited a question: would cost sharing ever reach a point where there was a backlash? Chernew didn’t think so and explained that he believed there was no way to reverse cost sharing unless the healthcare industry found a way to control the trajectory of spending. But he added that VBID at least protected people from high cost sharing.

However, Dubois thought that data showing adverse outcomes might be powerful enough to reverse the direction of cost sharing. Dubois brought up the concept of “rewarding the good soldier,” a VBID idea that patients who try a lower cost medication that doesn’t work for them shouldn’t have to pay a higher price for the more expensive drug if that does work for them.

Bacher brought up the point that the work in benefit design cannot be done in isolation. It has to be integrated with what is being done on the payment side with alternative payment models.

Ultimately, a lot of the ramifications of underinsurance has to do with society. There is a lot about the issue that is related to the labor market. There is a large and growing income gap in the United States, and the country’s healthcare system doesn’t have a mechanism in place to make it possible or easy for everyone to have access to care regardless of income, Chernew said.

Maybe what the system needs, suggested moderator Clifford Goodman, PhD, of The Lewin Group, is both clinical nuance and income nuance to address the problem of underinsurance.