Value Based Design

Leveraging Health: A Primer for Health Promotion Practitioners UsingValue-Based Designs Cyndy Nayer Co-founder and CEO: Center for Health Value Innovation John Riedel President: Riedel and Associates Consultants, Inc.

2010 Board of DirectorsBuck ConsultantsCaterpillar [Michael Taylor MD] Johns Hopkins HealthCareCity of Cincinnati Journal CommunicationsCity of Springfield Or Jack Mahoney ~ Pitney BowesDetroit Regional Chamber of Commerce Cyndy NayerGenesis Health System Partners in CareGoodyear/Whirlpool Plumbers and Pipefitters Local 525 H/W FundGroup Health Cooperative Premera BC/VivacityBob Holben ~Gulfstream Quad/Graphics; QuadMedPeter Hayes ~Hannaford Quest DiagnosticsHealth Alliance Med Plans State of ColoradoHEB Univ of Colorado Health SciencesHorizon BCBS NJ WellPointHumana WhirlpoolIBM Yum!IHP/Battle Creek©VBHEALTH.ORG Jan-Feb 2010

Our Mission  Our mission is to drive the value of every dollar invested in health  Our goal is to identify and link innovators and innovation that broaden the boundaries of health value  Our work is focused on defining value, creating relevance to shareholders and stakeholders, and improving the health and economic viability of communities.©VBHEALTH.ORG Jan-Feb 2010 3

Center publishes the first book on levers of VBD; white papers, evidence Also publishes evidence on sectors, innovation, outcomes www.vbhealth.org©VBHEALTH.ORG Jan-Feb 2010 4

Fundamentals of Value-Based Design Value-based design is an ENGAGEMENT TOOL for the CONSUMER AND PLAN SPONSOR AND PROVIDER DESIGN DIVIDENDS • Direct • HIT • Health/Productivity • Indirect • Insurance • Services • Performance • Incentives • Communication • Quality • Cost Trend Reduction DATA DELIVERY Uses Data to invest in …and services for improved health, incentives… that change quality, performance behaviors and financial trend VBD is focused on OUTCOMES April 2008©VBHEALTH.ORG April-May 2010 5

Value-Based Template Data Incentives Plan Design Resources Prevention Chronic and Care Mgt Care Wellness Delivery Jan- Feb©VBHEALTH.ORG 7 201

 Objective: Understand the experience of companies with value-based designs in place for 2 or more yearsCenter contracts with  Over 100 companies respondedBuck consultants to  Represent over 1 million employees  Jumbo to small, public/private, non-profitverify our work and governments-as-employers  Levers cover all 3 domains  87% Use levers in prevention and wellness  60% Use levers for chronic care management  26% Use levers for guidance to appropriate care delivery  54% use levers for Depression management  NOTE: some numbers may not add up to 100: this could be due to rounding errors or because companies were allowed to choose more than one response ©VBHEALTH.ORG April-May 2010

What We Now Know…  No VBD succeeds without a primary focus on prevention and wellness  All successful adoptions and accelerations of VBD are linked to the level/timing of communications  And no one succeeds when only communicating 1 time per year  Acceleration occurs when aligned incentives drive outcomes  This includes patient-centered coordinated care  This includes use of community-based assets  This includes communication no less than quarterly to keep stickiness of behavior change across all stakeholders  Sustainable and measurable value occurs across silos, into the community (when providers achieve improvement in health and financial outcomes) and into families©VBHEALTH.ORG April-May 2010 9

VBD Are Economically Sustainable… 79% said no changes were made in 2009- 2010 due to economic downturn©VBHEALTH.ORG April-May 2010 10

…VBD Are Economically Sustainable 56% said no changes due to the economic downturn were anticipated for the next plan year©VBHEALTH.ORG April-May 2010 11

Communication is Key to Behavior Change and Better Utilization 69% of companies communicate at least quarterly Most use a variety of media to reach and retain “stickiness”©VBHEALTH.ORG April-May 2010 12

Challenges to the VBD Benefit Deployment are Varied Employee Engagement is Key to Success©VBHEALTH.ORG April-May 2010 13

What Could They Have Done Better? Better Employee Communication and Communication with the Physicians/Pharmacists/Clinicians for Aligned Messaging©VBHEALTH.ORG April-May 2010 14

 Objective: Streamline the decision process for levers and designsCenter Launches the  Showcase examples of Levers for all 3Decision Matrix for domainsVBBD  Use levers in prevention and wellness  Use levers for chronic care management  Use levers for guidance to appropriate care delivery ©VBHEALTH.ORG April-May 2010

Fundamentals of Value-Based Design Value-based design is an ENGAGEMENT TOOL for the CONSUMER AND PLAN SPONSOR AND PROVIDER DESIGN DIVIDENDS • Direct • HIT • Health/Productivity • Indirect • Insurance • Services • Performance • Incentives • Communication • Quality • Cost Trend Reduction DATA DELIVERY Uses Data to invest in …and services for improved health, incentives… that change quality, performance behaviors and financial trend VBD is focused on OUTCOMES April 2008©VBHEALTH.ORG April-May 2010 16

Leveraging Health Matrix©VBHEALTH.ORG Jan-Feb 2010 17

Decision Matrix Follows the Health Value Continuum examples of levers Solve for: Waste Future Risk Individual Health Reduction Reduction Competency Underuse/ Compression of Decision Support Overuse/ Morbidity for Health-Wealth- Misuse Performance Prevention and Remove Incentive for Incentive for use of Wellness barriers to early risk PHR primary care reduction Chronic Care Remove Incentive for Incentive for Management barriers to adherence counseling chronic care Guide to Incentive for care Disincentive for ER Care efficient care coordination use Delivery site©VBHEALTH.ORG Jan-Feb 2010 18

Value-Based Design Is Sustainable When It’s Mapped to Productivity  Example: Back Pain  20% loss in productivity in high risk group  Waster Reduction Lever: mandatory fitness/rehab  Chronic Care Lever: EAP/Behavioral health coach  Care Delivery Lever: Physical Therapy  Example: Smoking  9% loss in productivity in high risk group  Waste Reduction Lever: mandatory cessation classes  Chronic Care Lever: reduction in Tx copays  Care Delivery Lever: Weekly IVR/ phone calls with counselor©VBHEALTH.ORG April-May 2010 19

Value-Based Design Can Drive Productivity Outcomes thru Levers  Reduction in Total Risks  At the Person level [SMALL Er]  W/3 risks costs $5952  W/1 risk costs $4480  Difference = $1494/year  At the Population level [Mid-Large ER]  100 people moved from 3 risks to 1 risk= $298,700 savings  Comparison Opportunity:  Waste Reduction: Behavioral Health and EAP education/screening  Chronic Care: Dx drives intensive screening/coaching; copays are reduced when enrolled in behavioral health coaching  Care Delivery: Increased reimbursement to care mgt teams for chronic care; reduction in copay for care by these teams©VBHEALTH.ORG April-May 2010 20

What Is the Value of 100+ Levers?  Individual Health Management: up to 50% trend reduction  1:1 to 1:1.5+ Dividend  $1mm in dividend including productivity losses  Condition Management: up to 50% trend reduction  21% decrease in sick days/unscheduled absence  Overall adherence improved in medications/treatment compliance  Provider Selection (Care Delivery): up to 35% trend reduction  Improved compliance with evidence-based guidelines  Suites  Up to 50% reduction in trend sustained for 4 years and more April-May©VBHEALTH.ORG 21 2010

Value of Health is Driven by Sustainable Behavior Change  Quality Improvement effort to develop predictability, alignment in care, and transparency for choice  Risk management focus to reduce inefficiencies and variability in care and outcomes  Challenge in plan design v incentives leads to innovative use of levers  Alignment of incentives between delivery system and consumer decisions reduces friction  Communication that is visible, public and promotional  VBD = PCPCC = Outcomes that drive sustainable behavior change and predictable reduced trend Nayer, Mahoney. Journal of Compensation and Benefits Mar 09©VBHEALTH.ORG Jan-Feb 2010 22

Behavioral Change is the Key toSustainable Value

Obesity Example for Individual Health CompetencySponsor Goal Lever Action HPP Role Metrics Report to SponsorTransfer Reduced Receive nutritional Provide nutritional counseling, P in modules, % participationresponsibility insurance cost counseling, participate provide coaching, changes in % completingfor personal for participation in coaching, complete design online module, eating patterns, interventions,health or for achievements an online educational provide reminders for updated status % change inmanagement module, update updating the PHR, of PHR, eating behavior,to individuals information in the PHR provide technical assistance. change In % change in weight weight, BMI, % change in BMI risks related to obesity. ©VBHEALTH.ORG Jan-Feb 2010 24

Obesity Example for Condition ManagementSponsor Goal Lever Action HPP Role Metrics Report to SponsorIncrease adherence Reduce cost ofTx Enroll in disease mgmt. Provide education about Improvement % change in weightto chronic care when individual obtain lab values as obesity, perform ongoing in testing result, % change in BMImanagement participates in required, adhere to lifestyle coaching related exams, and lab % change in chol. approved program recommended care obesity, provide coordination results; % change in HbA1C activities among care providers improvement when necessary in indicators (BMI, cholesterol, level, HbA1C) ©VBHEALTH.ORG Jan-Feb 2010 25

Obesity Example for Care DeliverySponsor Goal Lever Action HPP Role Metrics Report to SponsorUse of appropriate Reduce cost of Use of PCP network defined Education about condition Degree of % in-network careprovider based upon primary physician by plan sponsor, adherence or lifestyle, provide referrals adherence to PCP utilizationevidence and care and selected to Tx protocols that are to appropriate providers, recommended patterns,efficiency specialist care evidence-based coach on care mgmt. and providers; % change in diet communicating with your improved % change in weight physician about obesity- testing results % change in chol. related issues exams, and lab fractions, results; % reduction in ER use improved disease indicators and health status indicators (BMI, cholesterol level, HbA1C) ©VBHEALTH.ORG Jan-Feb 2010 26

Alignment: If Value Is Built on Outcomes, then Purchasing Must Be Built on Outcomes  Outcomes can be measured by determinants  Health (clinical)  Wealth (financial)  Performance (operational)  Outcomes-Based Contracting must align incentives between or across the signers of the contract©VBHEALTH.ORG Jan-Feb 2010 27

Innovator DNA Innovators embrace a mission for change.  Make mistakes  Take risks  Display courage  Transform ideas into powerful impact  Provide to the general community in order to change the ecosystem HBR Vol 87 #12, Dec 2009

Value Based Design

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Value Based Design — Presentation Transcript