How Benefit Design Can Steer Employees Toward High-Value Care

When pursuing value-based care, employers have the capacity—in collaboration with their payer or third-party administrator partners—to steer their employees toward high-value care, according to a report from Value-Based Insurance Design Health and Signify Health.

Employers have little to no control over establishing provider reimbursement amounts and processes, but they can work with payers and third-party administrators to set deductible and cost-sharing amounts. With these cost-sharing levers, employers can better align benefit design and payment reform incentives.

In accordance with the principles of value-based care, the researchers recommended that employers maintain low cost-sharing for high-value care. Employers can particularly focus their efforts on high-value care factors that are used as performance measures.

This may involve redesigning the company’s health benefits to waive or lower deductibles and co-pays for certain high-value services.

Such an approach confronts one of the major challenges that prevent benefit designs from meaningfully improving patient outcomes while lowering costs. Members often forego certain high-value care, such as preventive services, to cut down on out-of-pocket healthcare spending because cost-sharing levers have not been tied to value.

Additionally, employers should collect data on low-value care and allow those findings to inform their quality metrics and decisions about cost-sharing for low-value services.

“Employers can advocate for lower reimbursement and increase cost-sharing for services that are almost always low value (e.g., vitamin D testing of average-risk patients), and task their carriers with quantifying potential low-value services in ways that recognize the nuance in value definitions for future action,” the report recommended.

The researchers also had a couple of recommendations for holding payers accountable for high- and low-value care utilization trends among members.

Although employers play a key role in establishing value-based insurance design, insurers and third-party administrators are responsible for increasing high-value care utilization.

Employers have a couple of tools at their disposal to hold their payer and third-party administrator partners responsible for care utilization trends, starting with establishing expectations around utilization. They could also receive refunds for higher or unchanged utilization of low-value care services.

The repercussions of changes in low-value care utilization do not always have to be negative. Employers can incentivize payers and third-party administrators to reduce utilization by sharing savings with providers and administrator partners.

Employers can collaborate more effectively with a willing partner, so the report provided guidance on choosing the best payer or third-party administrator with which to partner to increase high-value care and decrease low-value care.

Partners should be focused on directing members to high-value care and should have established strategies for doing so. Payers and administrator partners with a strong emphasis on this goal may reward members for choosing high-value care providers. They may use tiered models or high-performance provider networks to help members find appropriate care.

Employers should seize every opportunity to engage in advanced payment models, the researchers added. 

Whether that means switching benefits administrators to a partner that already engages in these models, negotiating with current benefits administrators to transition into advanced payment, or partnering with a company that offers specialized models, employers should be actively pursuing advanced payment models and moving away from fee-for-service.

Episodes-of-care payment models can be tricky for employers to enter but may be worthwhile if employers commit to them. Cost-sharing in episodes-of-care payment models is particularly malleable, giving employers more control over employees’ healthcare spending.

If employers cannot completely divorce themselves from a fee-for-service model, the report urged them nevertheless to align fee-for-service reimbursement with low- and high-value care in mind.

Fee-for-service reimbursement is likely going to be a fixture of the healthcare system for the foreseeable future, healthcare leaders anticipated in an Insights report. Hospitals and larger health systems projected that they would diminish reliance on fee-for-service to 76 percent and smaller providers projected decreasing reliance to 88 percent in the next three years.

“Employers have the power of the pen when contracting with carriers. Better alignment of clinically driven payment with evidence-based benefit design can improve quality of care, enhance equity, and promote value,” the report concluded.