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Michael E. Chernew, Allison B. Rosen, and A. Mark Fendrick Value-Based Insurance Design Health Affairs, March/April 2007; 26(2): w195-w203. [Abstract] [Full Text] [PDF] [Reprints & Permissions]

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Value Is In The Eye Of The One Paying The Bill

Randall W. Crenshaw   ( 1 February 2007 )

Elusiveness Of Cost Containment

Stephen Gregg   ( 5 February 2007 )

VBID: Quality At Reasonable Cost

Lissa Montgomery   ( 12 March 2007 )

Value Is In The Eye Of The One Paying The Bill 1 February 2007
Randall W. Crenshaw, Executive Medical Director ViPS, Inc., an Emdeon Company Send comment to journal: Re: Value Is In The Eye Of The One Paying The Bill rcrenshaw{at}vips.com Randall W. Crenshaw	Congratulations! This is really important stuff. My own research using commercial HMO data found a net financial savings for beta-blockers after a heart attack, and I found a smaller savings from increasing the use of beta-blockers and ACE inhibitors in congestive heart failure. I do, however, respectfully disagree with your opinion that increasing statin use in heart attack patients is cost-effective. Statins cost almost $100 a month, and heart attacks, on average, cost about $30,000. Statins give an absolute annual reduction in heart attacks of 1 percent in the highest-risk patients (according to clinicalevidence.com). A plan will have to spend $120,000 to save $30,000. More broadly -- on a philosophical plain -- in the end, only the individual patient spending his own money can decide how "valuable" a particular treatment really is. I would prefer to see more movement to high-deductible plans that give the patient (now the payer) good information on the benefits (in terms of absolute risk reduction) of common treatments and their costs...answering the questions "what are my odds if I take the drug, and if I don't, of having a heart attack in the next year, and how much am I willing to pay for that amount of risk reduction?" I believe that approach will substantially reduce cost and waste in our bloated industry, especially for the 85% of Americans who spend less than five or six thousand dollars a year for medical care. For those who are very sick and truly poor, as J.D. Kleinke says, most of us would say that help with their medical bills should be part of the response as well. Perhaps in that latter group, the approach you advocate would work very well.
Elusiveness Of Cost Containment 5 February 2007
Stephen Gregg, Retired Executive Managed Care Send comment to journal: Re: Elusiveness Of Cost Containment sgregg1{at}earthlink.net Stephen Gregg	I do not believe that the authors appreciate the fundamental elusiveness of health care cost containment, but would lead us to more administrative complexity to achieve another round of failure. Let's imagine that we wave a magic wand and everyone is now using "value justified" services under a centrist administrative structure that struggles to keep up. The consequence is initially adverse to the "ineffective." What happens? The "ineffective" respond and compensate for lost revenue in a combination of what we would want and not want them to do...in most instances more than making up for any financial lost ground. It is wishful thinking to assume that the totality of health care spending changes. It is completely analogous to the much less sophisticated change that was applied to the egregious length-of-stay in hospitals in the 1970s. We identified the issue, developed policy and strategy to attack the subject, and cut both admission rates and LOS. Economic impact: a small blip on the overall trend line. Sustainable cost containment requires a more nuanced strategy than the authors presume. This should not be confused with the worthy intentions of their premise.
VBID: Quality At Reasonable Cost 12 March 2007
Lissa Montgomery, Lecturer University of Hawaii at Hilo Send comment to journal: Re: VBID: Quality At Reasonable Cost lissam{at}hawaii.edu Lissa Montgomery	Last year, General Motors spent more on health care than on steel. Most Americans expect health insurance as an employee benefit. However, as health care costs rise, employers are looking for ways to reduce the cost, including passing some of the costs onto their employees. Value- based insurance design (VBID) is an attempt to design a health care option that allows the user to obtain quality care while at the same time the employer is able to keep costs at a reasonable level. The term value is used to denote the significance of the focus of obtaining the best possible outcome for the best possible price, according to Chernew et al. Employers are increasingly becoming interested in VBID. Pitney-Bowes is one of about 20 employers who have had success with incorporating VBID. They found that reducing certain costs to the patient, such as copayments for medications for chronic conditions, ultimately leads to an increase in the use of preventive services and reduces complications, which in turn leads to a decrease in health care costs for the employer. Although VBID is a brand-new concept in the field of health care management, it is in use and it does appear promising. Its goals of providing quality health care while keeping an eye on the bottom line are admirable. It is with hope that in several years, VBID will have proven its claims, will be another choice for health care, and that Americans can continue to expect health insurance as an employee benefit for decades to come.