Michelle Andrews, Kaiser Health News, November 30, 2010
What if, instead of making a $10 insurance copayment for your cholesterol lowering drug, your employer provided it and other drugs to manage chronic conditions for free? What if your company also paid for weight management and smoking cessation classes? You’d probably give your employer high marks for looking out for your health.
Now, what if your employer said that if you want certain procedures that it’s determined are overused, like an MRI or knee surgery, you’ll have to pay up to $500 extra, on top of your other coinsurance charges? Those employer decisions might not be nearly as welcome.
Both, however, are part of an approach to health care that shares a common perspective: The idea that consumers’ out-of-pocket medical costs should be based on the value of a medical service to their health rather than its price.
Although still relatively rare, the model is garnering increasing attention among employers, insurers and policy experts. Mercer, a benefits consulting company, found in a 2008 survey that 19 percent of employers with at least 500 employees were charging workers less for services the companies considered to have a higher value for workers’ health. In addition, more than 80 percent of employers with at least 10,000 workers surveyed by Mercer in 2007 said they were interested in adopting this model in the next five years, according to a paper published in the November issue of Health Affairs. It was one of several on value-based insurance design, as it’s called, in the current issue.
Some health law provisions also embrace value-based insurance principles, including the requirement that new insurance policies provide free recommended preventive services such as mammograms andcolon cancer screenings starting in 2011. “It’s all in keeping with the idea that some things are so valuable to health care that there should be no barriers to their use,” says Dr. Niteesh Choudhry, an assistant professor at Harvard Medical School and lead author of two of the articles in this month’s Health Affairs.
A landmark 1982 study showed that as out-of-pocket costs rise, consumers spend less on health care services. But they scrimp not just on care that’s ineffective or unnecessary but also on care that they need, treatment that’s highly effective at addressing their condition.
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