Value-based insurance design

Creating a predictable health cost trend

A conversation with Cyndy Nayer, MA, President and CEO.
The Center of Health Engagement; founder, Center for Health Value Innovation

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Ms. Nayer is a nationally recognized thought leader on value-based insurance design. We talked with her about designing innovative benefit structures that improve engagement, accelerate accountability and create a predictable health-cost trend.

Q: Can you explain value­based insurance design, or VBID?

A: VBID, or VBBD (value-based benefit design), is a long-term risk management strategy for reducing health and financial risks to businesses and beneficiaries. It unites in building a health plan benefit focused on the long-term outcomes of improved health. As a result, we pay more for the activities that truly bring value, and pay less for the things that don’t.

VBID has matured to include reimbursement to health systems, care providers and technology. That’s where the rapid innovation is occurring, and rapid innovation for health outcomes is where I’m focused now.

Q: VBID has a different goal than traditional insurance?

A: Yes. In a traditional insurance plan design, the goal is to manage costs down by decreasing use. The plan manager identifies high costs by line items, and then designs plan changes that focus on reducing utilization of these items. In a value-based plan design, the goal is to get better outcomes by engaging in appropriate health care use, a long-term strategy that is not driven by line item.

Q: What is the key to managing down the risk?

A: It’s about changing behavior and getting employees, their families and their providers more engaged in better health management, and employers and plan sponsors keeping their eye on the changes in utilization with the goal of increased participation in healthy behaviors and adherence to treatment.

Q: VBID is a longer-term strategy. How long does it take to see results?

A: We used to say a minimum of three years. But in the past 10 years, we’ve amassed enough evidence to shorten that timeline by focusing on high-cost drivers, such as cardiometabolic disease.

Q: How do you know when you’re succeeding in your engagement activities?

A: It’s a process that evolves in stages. Early in my work, before CHVI was even founded, I began to see the continuum of sequenced movement. This evolved into the Health Value Continuum: monitoring and measuring what people do, assigning priority values to those activities, providing feedback that encourages engagement in desired activities and creating a predictable, downward-moving cost trend.

Health Value Continuum
EY Health Value Continuum

Q: You mention health information technology as central to this strategy. Describe for us your vision of the role of IT in engagement and outcomes.

A: Data is just that — but what we do with data is very important. When data is portable, such as on a smartphone, care will be more efficient. That’s the message of rapid innovation: identify gaps, identify solutions, create outcomes that matter, modify with new data and innovate again.

Q: Many of the initiatives you've been describing to us sound like powerful innovations. In a nutshell, what is your concept of innovation?

A: To me, health innovation is making health rapidly accessible and then letting the user define the priorities. In an innovative approach, if we first change the main goal that we are trying to achieve — better health — we can achieve our other desired goal, reduced health cost trends.

Health Value Continuum

EY - Health Value Continuum

Source: © Cyndy Nayer, 2013