The Value-Based Tools department in our May 2018 issue looked at how the medical episode of spending allowance (MESA) concept would turn the high-deductible health plan on its head. As Michael D. Dalzell, a senior contributing editor for Managed Care explained, instead of people paying for their care till their coverage kicks in, a MESA benefit design would provide first-dollar coverage but with a budgeted amount of coverage. The notion is that people—and insurers—would be motivated to shop around for the best MESA available.
François de Brantes
We caught up with François de Brantes, who was then with Altarum Institute, the not-for-profit consultancy that was developing the MESA model. De Brantes is now at Remedy Partners and is still working on alternatives to high-deductible health care coverage.
He is calling his current baby the Reference Price-based Benefits Plan (RPB, as de Brantes abbreviates it). So how would RPBs work differently than MESAs? De Brantes explained it in an email.
“MESA relies on underlying up/downside risk arrangements with providers to work because episode costs are capped for those providers since they are liable for all costs above the negotiated price.
“All costs not included in episodes—and that can vary between 30% and 50% of total costs of care, depending on what you can contract in episodes—are then subject to normal underlying FFS prices. Those prices can easily be upward of 700% of Medicare for some facilities in some markets unless you’re the dominant carrier.
“So,” continues deBrantes, “for a start-up plan trying to get a MESA design underway, you may be hard-pressed to demonstrate enough aggregate savings to compete with the incumbents and doom the effort.”
De Brantes says his RBP plan solves this problem because costs above the MESA allowance would be capped by a percentage of Medicare fees (anywhere from 150% to 175%) that might be based on prevailing commercial insurance rates.
Interesting. Maybe we’ll check in again next year to see how it’s going.