Value Based Design

Cyndy Nayer

Co-founder and CEO: Center for Health

Value Innovation

John Riedel

President: Riedel and Associates

Consultants, Inc.

Leveraging

Health:

A Primer for Health

Promotion

Practitioners Using

Value-Based Designs

2010 Board of Directors

Jan-Feb 2010©VBHEALTH.ORG

Buck Consultants

Caterpillar [Michael Taylor MD] Johns Hopkins HealthCare

City of Cincinnati Journal Communications

City of Springfield Or Jack Mahoney ~ Pitney Bowes

Detroit Regional Chamber of Commerce Cyndy Nayer

Genesis Health System Partners in Care

Goodyear/Whirlpool Plumbers and Pipefitters Local 525 H/W Fund

Group Health Cooperative Premera BC/Vivacity

Bob Holben ~Gulfstream Quad/Graphics; QuadMed

Peter Hayes ~Hannaford Quest Diagnostics

Health Alliance Med Plans State of Colorado

HEB Univ of Colorado Health Sciences

Horizon BCBS NJ WellPoint

Humana Whirlpool

IBM Yum!

IHP/Battle Creek

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.

Jan-Feb 2010©VBHEALTH.ORG 3

Center publishes the first book on

levers of VBD; white papers, evidence

Jan-Feb 2010©VBHEALTH.ORG

Also publishes evidence on sectors, innovation,

outcomes www.vbhealth.org

4

Fundamentals of Value-Based DesignValue-based design is an ENGAGEMENT TOOL

for the CONSUMER AND PLAN SPONSOR AND PROVIDER

April-May 2010©VBHEALTH.ORG 5

• Direct

• Indirect

DATA

• Insurance

• Incentives

DESIGN• HIT

• Services

• Communication

DELIVERY

• Health/Productivity

• Performance

• Quality

• Cost Trend Reduction

DIVIDENDS

April 2008

Uses Data to invest in

incentives…

…and services

that change

behaviors

for improved health,

quality, performance

and financial trend

VBD is focused on OUTCOMES

Evolution of the Health Value

Continuum© 2007


Value-Based Template

IncentivesPlan Design

Resources

Data

Jan-

Feb

201

0

©VBHEALTH.ORG 7

Prevention

and

Wellness

Chronic

Care Mgt Care

Delivery

Center contracts with

Buck consultants to

verify our work

Objective: Understand the experience of companies with value-based designs in place for 2 or more years

Over 100 companies responded

Represent over 1 million employees

Jumbo to small, public/private, non-profit 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

April-May 2010©VBHEALTH.ORG

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


VBD Are Economically Sustainable…


79% said no changes

were made in 2009-

2010 due to

economic downturn

…VBD Are Economically Sustainable


56% said no

changes due to the

economic downturn

were anticipated for

the next plan year

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”

Challenges to the VBD Benefit

Deployment are VariedEmployee Engagement is Key to Success


What Could They Have Done

Better?Better Employee Communication and Communication with the

Physicians/Pharmacists/Clinicians for Aligned Messaging


Center Launches the

Decision Matrix for

VBBD

Objective: Streamline the decision

process for levers and designs

Showcase examples of Levers for all 3

domains

Use levers in prevention and wellness

Use levers for chronic care

management

Use levers for guidance to

appropriate care delivery

April-May 2010©VBHEALTH.ORG

Fundamentals of Value-Based DesignValue-based design is an ENGAGEMENT TOOL

for the CONSUMER AND PLAN SPONSOR AND PROVIDER


• Direct

• Indirect

DATA

• Insurance

• Incentives

DESIGN• HIT

• Services

• Communication

DELIVERY

• Health/Productivity

• Performance

• Quality

• Cost Trend Reduction

DIVIDENDS

April 2008

Uses Data to invest in

incentives…

…and services

that change

behaviors

for improved health,

quality, performance

and financial trend

VBD is focused on OUTCOMES

Leveraging Health Matrix


Decision Matrix Follows the Health

Value Continuum examples of levers

Solve for: Waste

Reduction

Future Risk

Reduction

Individual Health

Competency

Underuse/

Overuse/

Misuse

Compression of

Morbidity

Decision Support

for Health-Wealth-

Performance

Prevention and

Wellness

Remove

barriers to

primary care

Incentive for

early risk

reduction

Incentive for use of

PHR

Chronic Care

Management

Remove

barriers to

chronic care

Incentive for

adherence

Incentive for

counseling

Care

Delivery

Guide to

efficient care

site

Incentive for care

coordination

Disincentive for ER

use


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


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


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

2010©VBHEALTH.ORG 21

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

Behavioral Change is the Key to

Sustainable Value


Obesity Example for Individual Health Competency

Sponsor Goal Lever Action HPP Role Metrics Report to Sponsor

Transfer Reduced Receive nutritional Provide nutritional counseling, P in modules, % participation

responsibility insurance cost counseling, participate provide coaching, changes in % completing

for 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 in

management 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.


Obesity Example for Condition Management


Increase adherence Reduce cost ofTx Enroll in disease mgmt. Provide education about Improvement % change in weight

to chronic care when individual obtain lab values as obesity, perform ongoing in testing result, % change in BMI

management 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)


Obesity Example for Care Delivery


Use of appropriate Reduce cost of Use of PCP network defined Education about condition Degree of % in-network care

provider based upon primary physician by plan sponsor, adherence or lifestyle, provide referrals adherence to PCP utilization

evidence 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)

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


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

Cyndy Nayer

John Riedelwww.vbhealth.org

[email protected]


Economy & Finance

Value Based Design