Value-Based Benefit Design Trend Grows As Health Plans Expand Offering To Fully Insured Group Market

Monday, December 7, 2009 General News
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NASHVILLE, Tenn., Dec. 7 HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that Blue Cross and Blue Shield of Massachusetts, Health Alliance in Illinois and Blue Shield of California are examples of major insurers who are rolling out value-based benefit design (VBBD) packages to the fully insured market. According to the recent New England Health Plan Analysis, Blue Cross and Blue Shield of Massachusetts, the only state HMO offering VBBD packages to the self-insured market, will be the first health plan in the state to extend this option to the fully insured market beginning in January 2010.

VBBD, a growing trend in pharmacy benefit management, reduces cost barriers to medications deemed most effective in controlling chronic diseases to drive patient compliance with treatment. Proponents of the concept cite numerous studies demonstrating employer cost savings from this benefit design. However, implementing a VBBD package often requires a multi-year commitment because drug expenses are likely to increase sharply in the first year, with the expectation that they will be offset by reduced healthcare spending in the long run.

Blue Cross and Blue Shield of Massachusetts offers a VBBD plan which reduces copays for certain prescription drugs used to treat diabetes, coronary artery disease or asthma, and encourages members to have a primary care relationship and receive recommended preventive care.

"Until recently, VBBD has been most widely adopted by large, self-insured companies, which means these companies take on the financial risk of managing employee care and pay health plans a fee to provide administrative services," said Ric Gross, analyst with HealthLeaders-InterStudy. "The extension of VBBD choices to the fully insured group market indicates health plans feel this approach is successful in reducing costs and well worth the investment as they take on the associated financial risk. Health plans will likely require fully insured companies interested in VBBD to engage in longer-term contracts, but the exact amount of time it will take health plans to see the financial benefits from VBBD in the fully insured market remains to be seen."

Why Pharmaceutical Companies Need Health Plan Analysis

Health Plan Analysis identifies key health plan trends, allowing pharmaceutical companies to create comprehensive strategic plans and sales strategies at state and local levels. Updated quarterly, Health Plan Analysis provides a detailed look at plan design and financials, as well as information about mergers, legislation and other influencers driving healthcare in a particular region.

About HealthLeaders-InterStudy

HealthLeaders-InterStudy, a Decision Resources, Inc. company, is the authoritative source for managed care data, analysis and news. For more information, please visit

About Decision Resources, Inc.

Decision Resources, Inc. is a cohesive portfolio of companies that offers best-in-class, high-value information and insights on important sectors of the healthcare industry. Clients rely on this analysis and data to make informed decisions. Please visit Decision Resources, Inc. at

All company, brand or product names contained in this document may be trademarks or registered trademarks of their respective holders.

For more information, contact:Lisa Osgood Elizabeth MarshallHealthLeaders-InterStudy Decision Resources, Inc.781-296-2606

SOURCE HealthLeaders-InterStudy

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