Value Based insurance design, commonly referred to as Value Based Benefits (VBB), provides opportunities for Payers to reduce risk and capture new cost savings. The positive financial results from Value Based insurance depends upon the structure of benefits and the level of automation and system integration.
Historically VBB plans have been confined to prescription medications for chronic disease. Over the past three years the market presence of VBB plans has accelerated. Product design has expanded to include benefit elements such as treatment choice, provider choice, utilization of preventive services and incentives to opt-in for care management and wellness programs. Product design includes deductible and co-payment tiering that may be conditional, situation and/or time-based.
The financial value of VBB plans depends on benefit structures, including the direction and magnitude of co-payment, member/population targeting and new business practices relative to provider contracting and reimbursement. A high degree of automation and integration among enterprise systems is necessary.1
FJA’s Healthcare solution set:
- Product Machine ®
- Plan Configurator ®
- Group Configurator ®
- Benefit Query ®
We provide Payers with the tools required to construct, administer and extract financial value from VBB plans. Structuring and administering VBB plans requires the integration of a range of systems and alignment of business processes. It also requires extensive automation to achieve scale. FJA is a unique business partner, in that we can provide the software tools, integration know-how and discipline to help you capture new cost savings and achieve increased automation.
Market Growth
According to the Institute for Advanced Policy Solutions, 75% of healthcare costs are linked to lifestyle choices and chronic condition mismanagement. Individuals and employers seeking to trim healthcare costs need benefit options that drive both health and value improvement.2
Value Based design of benefits will have a positive impact on Payers business on two significant competitive fronts:
- New Business: VBB will have a moderate to high impact on winning new business.
- Business Retention: VBB will have a medium to high impact on retention rates.
Based on 30 years of experience in insurance product design, FJA has the expertise, software technology and business process experience to help Payers design and implement effective VBB plans. Leveraging product components from the Product Machine® (situational, conditional and temporal benefit management) and an array of provider/network selections from the Plan Configurator ®, FJA can help Payers rigorously structure benefits, co-insurance choices, care location choices and automate business processes required to achieve scale.
Properly structured, VBB plans align financial incentives with EBM. Risk is reduced. Value and health quality are increased. VBB is not a cost-shifting vehicle. It is a systematic application of benefit design, utilization of high value services, and selective provider and care delivery venue.
Example:
Structure of higher co-payment for low-value services.
Structure of lower co-payment for preventive services and adherence to care management.
FJA’s tools help Payers build and implement VBB plans:
- Identify and structure specific high-value services/benefits
- Identify and structure high value preventive care benefits
- Structure choices for cost-effective providers and care delivery venues
- Structure benefit incentives toward chronic care management and disease management
- Identify specific elements within the benefit structure that require enhanced claim detail and adjudication support
- Support integration with claims, enrollment and other systems, including 3rd party incentive vendors
Tapping into FJA’s experience and solution set, Payers are better able to create VBB plans, streamline workflow and achieve high levels of automation.
Schedule your customized VBB product design session today.
Call Marc Dutton at (212) 840-2618
Email: advantage@fja.com
1. Aligning Incentives and Systems: Promoting Value-Based Insurance Design, Patient-Centered Primary Care Collaborative.
2. What Accounts for the Rise in Health Care Spending, K. Thrope and L. Ogden Institute for Advanced Policy Solutions.
