Value-Based Insurance Design Meets the Medical Home: Employers Blend Benefit Strategy with Medical Home to Lower Costs and Improve Employee Health

Wednesday, March 31, 2010 Health Insurance News
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White paper, 'Aligning Incentives and Systems' released today at Patient-Centered Primary Care Collaborative Stakeholders Meeting

WASHINGTON, March 30 /PRNewswire-USNewswire/ -- While some employers are increasing employee co-pays to balance rising health benefits costs, another pathway is emerging that can both lower costs in the near term and deliver better employee health down the road. A new white paper outlining the returns employers can achieve through the synergy of value-based insurance design (VBID) and the patient centered medical home (PCMH) was released today at a meeting of the Patient-Centered Primary Care Collaborative March 30 in Washington, DC.

There is little agreement on the national level for reining in health care costs and enhancing care delivery. Yet two employer-supported means for improving health care value produce many of the solutions sought to improve care delivery on a national level. VBID steers employees to use higher-value health care services by removing barriers for essential, effective services, thus reducing overall costs and improving outcomes. PCMH fosters relationships between patients and providers to improve access and increase quality and consistency of care.

Authored by the PCPCC's Center for Employer Engagement in partnership with the National Business Coalition on Health and the University of Michigan Center for Value-Based Insurance Design, Aligning Incentives and Systems: Promoting Synergy Between Value-Based Insurance Design and the Patient Centered Medical Home presents the mechanics of both strategies and reviews the evidence for their clinical and economic value.

"The objectives of VBID and PCMH are to improve quality and continuity of care in a fiscally responsible manner," said A. Mark Fendrick, MD, one of the paper's authors and co-director of the University of Michigan VBID Center. "With better alignment of patient and clinician incentives to encourage the use of high-value medical services, we can produce more health at any price."

The authors point out that employers -- as purchasers of health care -- play a pivotal role in improving the health care system. Because PCMH initiatives vary in governance, financing and structure from region to region, employers and employer coalitions need to be involved in building multi-stakeholder initiatives and developing medical home models that truly add value to the health benefits they provide. VBID may well be part of an effective benefit design strategy that creates incentives for high-value health care, and the medical home may prove to be a key ingredient.

"Most discussion of the medical home model has focused on primary care practice reengineering and payment reform to align practitioner incentives," said Andrew Webber, president and CEO of the National Business Coalition on Health, the national association of employer based health coalitions. "Yet the role of consumers in advancing the medical home has been largely missing in the conversation to date. The newly released PCPCC white paper helps complete the story by describing the use of innovative employee benefit design strategies and incentives to encourage healthy lifestyle choices, preventive services, self-management, treatment compliance and selection of medical homes. These employer- and health plan-led strategies are needed to ensure that as we build the medical homes of the future, 'they will come.'"

The PCPCC is a coalition of more than 700 organizations representing the nation's business leaders, consumers, primary care physicians and other health care stakeholders. Presentation of the white paper was the centerpiece of a panel discussion about expanded access to care at today's PCPCC Stakeholders Meeting, "Cultivate the PCMH: What Really Matters." Aligning Incentives and Systems makes the business value case for employers and offers steps employers can take to implement this synergistic strategy. Ten case studies -- from employers, health plans, state governments and a municipality -- explore how combining VBID and PCMH can enhance quality of care while lowering costs. The organizations profiled are the Whirlpool Company, the State of Washington, the City of Battle Creek, Mich., IBM, Roy O. Martin Lumber, CIGNA, Universal American, Geisinger Health System/Health Plan, Aetna and the State of Minnesota.

Aligning Incentives and Systems was produced with support from Pfizer. To download a copy of the report, go to

The PCPCC is organized and financed to provide better outcomes for patients, more efficient payment to physicians and better value, accountability and transparency to purchasers and consumers. Studies of the PCMH model show that it improves patient satisfaction and clinical outcomes. It also lowers health care costs by improving care coordination and communication between primary care physicians and their patients.

About the Patient-Centered Primary Care Collaborative

The Patient-Centered Primary Care Collaborative is a coalition of more than 700 major employers, consumer groups, organizations representing primary care physicians, and other stakeholders who have joined to advance the patient centered medical home. The Collaborative believes that, if implemented, the patient centered medical home will improve the health of patients and the health care delivery system. For more information on the patient centered medical home and a complete list of the PCPCC members, please visit

SOURCE The Patient-Centered Primary Care Collaborative

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