In recent years, media and governmental calls-to-action to improve the nation's health care system have reached a fever pitch. Health Secretary Michael Leavitt's four cornerstones, publicized decreases in generic-first therapies and the outcropping of centers of excellence are responses to the underlying dissatisfaction with the U.S. health care system.
The messages in the marketplace are growing, and among the key phrases are evidence-based decisions and value-based decisions - in many cases, used interchangeably. However, while the terms are interrelated, they are not interchangeable.
For employers, understanding the differences between evidence-based decisions and value-based decisions is fundamental to the improving health care processes.
Value-based decisions
A growing number of companies are creating health management strategies that move away from focusing on cost compression to focusing on investment in health.
Such strategies include value-based decisions in which incentives drive employee behavior to yield positive returns. Often, they are first used with a focus on high-cost disease-state drivers, such as diabetes or asthma.
However, value-based decisions rapidly move to horizontal health management, which underscores employees' accountability for their health, including disease prevention, lifestyle change and early risk detection.
In value-based strategies, investments are driven by data. Data identify the immediate need to manage high-cost drivers and often show consumer purchasing decisions, such as not refilling prescriptions or scheduling lab follow-ups.
A four-stage process is the most effective for high quality and access to care.
1. Data. In value-based designs, the broader the integration of claims data- medical and prescription claims, short- and long-term disability, workers' compensation, unscheduled absences, performance/productivity measures, and even safety measures - the more informed the decision-making process.
2. Design. Determining the expected return on investment is integral to value-based designs. By using accessible data and overlaying it with organizational goals and budgets, employers can identify early, mid- and long-term goals for the design.
For example, the goal may be increased disease management adherence, and the design will remove barriers to access for treatment, including clinician visits, lab tests and interventions, such as counseling for dietary control, pharmaceuticals and condition management support.
3. Delivery. After developing a value-based design, communication and education become paramount. Success at this level is directly related to senior executives being highly visible as participating and accountable employees.
Further, incentives - such as lowered insurance premiums, low-cost onsite services and fitness memberships - drive positive employee behaviors.
4. Continuous quality improvement. CQI ensures that goals are met, and if they are not, a review process with health plans, providers, benefits managers and other stakeholders works to refine the design and/or delivery to support better quality and resource consumption.
Value-based decisionmaking, then, is more than research. It considers the total burden of illness across a population and that burden's relationship to the specific stakeholder goals. It considers not only evidence-based medical guidelines, but also individual consumers.
Further, value-based decisions consider the financial impact of benefit design on consumers. Value-based designs, when targeted against specific conditions, will improve adherence and help manage the rate of medical inflation through fewer hospitalizations and emergency room visits.
Evidence-based decisions
Evidence-based medicine, conceived by Dr. David Sackett, is "the conscientious, explicit and judicious use of current best evidence in making decisions about the care of the individual patient. It means integrating individual clinical expertise with the best available external clinical evidence from systematic research."
EBM applies clinically-based best practices to improve outcomes and quality. It uses research, modified and enhanced over time to incorporate patient needs and preferences, to determine the best course of action in treating conditions and disease.
Clinicians use peer-reviewed journals, government and quasi-governmental committees - such as the Agency for Healthcare Quality and Research - and published best practices from hospitals, health systems and condition management specialists.
Cases in merging value-based, evidence-based designs
Procter & Gamble provides 100% coverage for a wide range of preventive care and onsite preventive screenings and has significantly reduced employees' out-of-pocket costs to treat medical conditions that drive reduced quality of life and productivity.
At P&G, understanding the purchasing decisions of health consumers is essential to reducing risk to the corporation.
Therefore, removing cost barriers by lowering member out-of-pocket costs for certain conditions is an incentive-driven plan design [value-based design] that is reinforced by the clinical evidence of early intervention and adherence to treatment to reduce overall quality of life and financial costs [evidence-based medicine].
Similarly, the QuadMed model focuses on prevention and wellness. This year, the company introduced "Well You for Diabetes," a value-based benefit feature to encourage compliance with best-practice EBM guidelines by diabetic patients and their providers. Data was compiled from analytics vendor Ingenix and U.S. Preventive Services Task Force and NCQA guidelines.
Aligning the incentives of the company, patients and providers, diabetic patients who remain enrolled in the program - by complying with clinical best practices - enjoy a zero-dollar copay for their diabetic medicines and supplies, estimated to cost an average $400 per patient per year.
Program adherence includes regular biometric screenings, personal health management and physician interaction - all value-based and evidence-based for quality improvement.
Both evidence-based medical guidelines and value-based health decisions are formed on increased and shared accountability. Optimal use of evidence-based and value-based decisions drives the overall health improvement of the person and the corporation.
The overall goal of decisions should be to use data to identify key risks, then use evidence to build interventions that achieve short- and long-term organizational goals.
The authors are officials/members at The Center for Health Value Innovation, a community of employers and payers building evidence, tools and competency in value-based decisionmaking.
David Hom is strategic advisor at the Center and vice president strategic HR initiatives at Pitney Bowes. Greg Judd is the Center's director and leader of Benefits Information Group, a provider of employee benefit plan market intelligence. Sandra Morris is a senior manager of health care benefits design at Procter & Gamble and an active member of the Center. Cyndy Nayer is the Center's executive director and leads River City Partnership on Health, Inc., a national employer health strategy company.
Ray Zastrow is corporate medical director for QuadMed, which provides onsite primary care and wellness to large employers. See Hom, Nayer and Morris in person as they present at this year's Benefits Management Forum & Expo. Learn more about the Center at www.vbhealthorg.
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