Value-Based Design of Healthcare

Michael Thompson: Another avenue, or another element, of this is how front-loaded these designs are. They’re very much focused on the first several thousand dollars of expenditures, but we all know if they get a very expensive drug, if they go into the hospital, that’s all behind us very, very quickly. And so part of where some of this is going is around value-based design. How do we get smarter in how we develop these things? Any thoughts on where you see that headed?

Andrew Crighton, MD: It’s hard. Especially what I’ll focus on is biologics for arthritis, and the person has to pick up that cost the very first month, in January. So they’re paying the $2000, or whatever it is, in January rather than being able to spread it all out. I think there are some options that way too. But as we get into the value-based design, the question is still, what is the cost? What’s quality? Define quality. I think even in the medical profession we have trouble defining quality. So what’s the quality? And who’s value is it? Is it the employer’s value? Is it the patient’s value? Is it the medical carrier’s value? That may be different.

Michael Thompson: Any thoughts on value-based design and where that’s heading?

Bruce Sherman, MD: I think from a practical standpoint, relative to high-deductible health plans, we used to say, “Don’t get sick in July,” because that was when the interns were newly starting. Now we say “Don’t get sick in January,” because your employer may not have funded your HSA [health savings account] or HRA [health retirement] account. I think some employers have embraced the fact that they can front-load the HSA or the HRA account and in that way provide some level of protection for employees.

Patricia Haines: I also think it’s really generational. We have an older population, but if I spend any time with people under 35 who are looking at a healthcare plan, I think they are perfectly comfortable with mobile applications, WebMD, self-diagnosis, and telemedicine, and they’re going to save their money. And so I also think that there are generational issues that at least we have to consider.

Andrew Crighton, MD: You talk about what the opportunities of value-based care are. I think there are certain procedures that lend themselves to that, such as hip replacement. Certain procedures that are out there. In general care, it’s harder to define that. But for 1 specific event, in which you know the traditional recovery period is 6 weeks, that’s probably where it would come in best.

Michael Thompson: And my sense is that there is certain care that we need to eliminate some of the barriers to so that people get the advice that they need, to get the care they need. Right? Professional advice, right?

Andrew Crighton, MD: Yes.

Michael Thompson: And I think we need to start building in value-based discretion, almost reference-based pricing, if we can get to the point that we can have value-based contracting at the same time. And that’s a challenge. But I think the lesson we all take away from this is that healthcare is expensive—very expensive—and so often it’s way beyond the means of anybody. And so at the end of the day, we’re going to have to protect the consumer at some level if they’re going to actually have access to care. But that doesn’t mean we can’t get smarter in how we differentiate where that cost-sharing applies, and that’s the goal of value-based care.

Patricia Haines: And I would argue for a much broader definition of preventive. The diabetic who goes regularly to a physician, that’s preventive care. It is preventing exacerbation of a significant condition that can cause lots of other conditions. So I think we could stop narrowly defining that once-a-year annual checkup. And vaccines are preventive, but broaden that definition to include treating chronic conditions that we don’t want to be exacerbated.

Michael Thompson: And actually, even in the high-deductible plan modality, there’s policy activity looking at reinventing or redefining what an HSA-compatible high-deductible plan would be, to allow more things to be paid before a deductible along those same lines.