What Works

VBID improves adherence and outcomes

The caveats: Recent research says the evidence for improved outcomes was of moderate quality. And VBID still hasn’t proved its mettle as a cost saver.

Timothy Kelley
Senior Contributing Editor

It wasn’t a screaming headline, so it was easy to miss, but value-based insurance design recently turned a corner. Turns out it doesn’t just get people to take their pills; it also apparently improves health care outcomes.

VBID is a tool in which copayments for medications and other services reflect not just their price but also a payer’s wish to encourage or discourage their use. With the payer footing the resultant bill, what’s expected to yield a clinical benefit (like taking prescribed pills) becomes cheaper or free to the consumer while marginal services may become pricier—or perhaps not covered at all. Coverage “talks,” and the hope is to incentivize the prudent, prevention-oriented approach to health care that is so lacking in this country. Copay reductions instituted by Pitney-Bowes in 2002 were an early VBID success story; for patients with diabetes they were associated with a 26% drop in emergency department visits and a slower rate of growth in overall health care costs.

Niteesh K. Choudhry, MD

“Absolutely!” says Harvard researcher Niteesh K. Choudhry, MD, when asked if he now thinks VBID improves quality.

By 2010, many payers, both public and private, were using VBID—whether they called it that or not—with prescription drug copayments the most common vehicle. In a Health Affairs article that year, Harvard researcher Niteesh K. Choudhry, MD, and his coauthors reported that a fifth of employers who provided insurance used VBID and most of the rest were interested in doing so. They cautioned, though, that while VBID had “intuitive appeal” and had shown some positive effects on adherence rates, it was unclear that it would result in either improved outcomes or reduced health expenditures. Those issues should be resolved, the authors wrote, before VBID was used more broadly.

Now one of those questions has been answered—in the affirmative. Asked by Managed Care if evidence for VBID’s benefit to clinical outcomes had been more firmly established in the eight years since that Health Affairs piece, Choudhry replied, “Absolutely! I believe this strategy improves health care quality.” And cost savings? Choudhry grades VBID as neutral in that regard.

A more restrained, yet still positive, assessment came this July in a Health Affairs review article by three authors led by Rajender Agarwal, MD, who directs the Center for Health Reform in Southlake, Texas. Looking at 21 studies that met their analysis criteria (out of 796 candidates), the authors say all but one showed improvement in medication adherence and the results added up to “moderate-quality” evidence for improvement in clinical outcomes and quality. Given widespread perceptions of a wasteful health care system, it may be frustrating to some that evidence for VBID, once the shiny new thing, still suffers from iffiness. Many studies have been fairly short. Proactive interventions cost money. And VBID is a tactic that runs against the grain of what insurance companies commonly do: Rather than spread the big costs of the few across the many, it aspires to big savings from a few in exchange for small expenditures on the many.

In Choudhry’s MI FREE study completed in 2011, post-heart attack patients who didn’t have to pay for their evidence-based medications were significantly less likely to have another major cardiac event than those who paid medication copays. Their care happened to be cheaper, too, says Choudhry—by $6,000, though that wasn’t quite enough to reach statistical significance. He concedes that for other conditions, such as diabetes, the break-even moment may be more distant. “In 10,000 45-year-olds diagnosed with hypertension, for example, some small fraction will have a stroke or heart attack in the next few years,” he says. “But for all those 10,000 people we’ll have to pay for the medications.”

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