Factors Influencing the Success of Value-Based Insurance Design Programs

Grant Description: The researchers conducted a series of natural experiments examining value-based insurance design plans (VBID) implemented by CVS Caremark, a large pharmacy benefit manager, on behalf of numerous clients. They evaluated the impact of different VBID characteristics on patterns of adherence, discontinuation and use of statins by (1) developing a system to classify differences in VBID plan characteristics that may influence the ability of these plans to stimulate the use of evidence-based medications; (2) surveying plan administrators and plan sponsors to identify additional plan features that might confound the relationship between VBID plan characteristics and medication use; and (3) using pharmacy claims to determine which VBID design features (and combinations thereof) most effectively stimulate appropriate medication use. The objective of this project was to determine the factors that influence the success of value-based insurance design plans (VBID) and to develop “best practices” for future implementation.

Policy Summary: Efforts to improve the value of the health coverage and prevent the costly complications of common chronic disease are central features of current healthcare reforms. Value-based insurance design (VBID) plans attempt to address both of these goals and accordingly have been adopted by a substantial number of large employers. Further, VBID is of relevance to a variety of governmental payers, including Medicare, and the Patient Protection and Affordable Care Act, passed in March 2010, calls for the creation of guidelines to facilitate the broader use of this strategy.

While existing VBID plans have universally lowered copayments for evidence-based medications used to treat chronic disease, they have been structured in a variety of ways (e.g. the level of the copayment reduction, whether tiers were maintained, and whether the benefits were linked to disease management participation). The optimal design of a VBID plan has not been adequately evaluated.

To fill this knowledge gap, we identified VBID plans introduced by CVS Caremark and surveyed their plan sponsors to characterize the plan structures. We then used segmented linear regression to evaluate whether specific design features were associated with larger changes in adherence after plan implementation. Our final sample consisted of 340,528 patients in 100 unique VBID plans provided by 34 unique plans sponsors.

After adjusting for the other features, VBID plans that had greater increases in adherence after their implementation were those that were more generous, that specifically targeted high-risk patients, that had concurrent wellness programs, that did not have concurrent disease management programs and which made the benefit available only by mail. The presence (or absence) of tiers did not consistently influence whether the VBID plans’ changed adherence.

Based upon our analyses, several design characteristics of VBID plans appear to influence the ability of these insurance designs to increase adherence. These results should influence how future VBID plans are structured. Although a 3-4% change in adherence for many of these conditions is likely to be clinically significant, whether these features will meaningfully influence health outcomes or reductions in health spending remains to be established.