US life expectancy has seen the sharpest decline in over 100 years. While we are unfortunately seeing a cumulative decline, the fall is much more pronounced in some populations than others. The reasons for this decline go beyond the Covid-19 pandemic. We have longstanding health problems related to health disparities – poor access to health care, poverty, unemployment, lack of education, and poor diet that are impacting the health and wellbeing of a few racial or ethnic groups more than the others.
Health disparities are avoidable differences in health across the member population. These differences impact how long people are likely to live, the health conditions they may experience, and the care that is available to them. Today, many individuals are not able to achieve better outcomes because of systemic barriers with regard to gender, race, education, socioeconomic status, geographical location, and other structural factors.
Employers and health plans have the tools to make a difference and play a critical role in efforts to improve health equity. One of those tools is benefit design. They can make effective use of benefit designs to increase healthcare access, address unmet needs and personalize care for patients with equity gaps. Benefit designs directly impact affordability and availability – the main barriers to access. To achieve this goal, employers and health plans have to evolve their benefit designs from one-size-fits-all to a dynamic benefits plan structure that removes barriers to care and addresses unmet needs of their member populations with equity gaps.
Dynamic value-based insurance design (VBID) models provide an innovative tool for payers to reduce plan costs and enhance the quality of care for members impacted by health disparities. These benefit designs are highly targeted with specific eligibility criteria, incur lower direct costs, and have a measurable ROI. The dynamic benefit designs include a bundle of interventions that address the “whole person social needs” of specific subpopulations and provide them equitable access to care and a better opportunity to avoid the progression of their chronic conditions to costly complications.
The cost-sharing and other health plan design elements are built differently in dynamic benefit designs – it starts by first identifying a target population segment that has poor health outcomes due to health disparities. The second step is to find high-value services that can benefit these members the most and then create a cost-sharing structure that encourage them to use the offered services. In addition to subsidizing cost-sharing for such ‘high-value’ services, dynamic benefits also enable health plans to offer supplemental benefits to address their unmet needs due to social determinants of health.
By removing financial barriers to needed care, the dynamic benefits model offers a unique opportunity to efficiently target underserved populations and promote health equity. CMS innovation center is already testing a version of dynamic benefits – “VBID” in the Medicare Advantage program, allowing plans flexibility to provide supplemental benefits for beneficiaries based on health conditions and/or socioeconomic factors.
For organizations who are thinking about reducing health disparities, here are five steps to include dynamic value-based insurance designs in your benefit strategy
Step 1: Target subpopulations
The first step is to find out the subpopulations that can benefit from the new plan designs. The direct costs of offering subsidized benefits to all members can be high, with smaller returns in cost avoidance. Under VBID, plans should target interventions to those who can most benefit. This means that plans should evaluate their population holistically and focus on sub-populations to identify health disparities.
Step 2: Subsidize cost-sharing for primary care services
Primary care services are important for all members, especially for ones that have chronic conditions. Most benefit designs require deductibles to be met before applying cost-sharing for primary care services. Even a minimal amount of cost-sharing can cause people to delay or forego care. The “skin in the game” model does not work for members who have to choose between healthcare and basic necessities and serves to drive inequities, resulting in vulnerable communities often not getting the care they need. VBID enables better utilization of primary care services by keeping them outside of deductible and subsidizing cost-sharing for targeted members.
Step 3: Offer add-on supplemental benefits
Recent literature demonstrates a robust association between socioeconomic status and care quality for chronic conditions in US primary care practices, showing that adult patients with diabetes who lived in more deprived and rural areas were significantly less likely to attain high-quality diabetes care compared with those in less deprived and urban areas. Often this is due to the high cost of medications and doctor visits, poor health literacy, lack of transportation, food insecurity, housing instability, and more. In dynamic benefits design, supplemental benefits can be offered as add-ons to meet clinical and health-related social needs such as transportation benefits (for example office visits or pharmacies) and healthy nutrition such as healthy food cards, medically tailored meals, nutritional counseling, and education.
Step 4: Offer incentives and rewards
Dynamic benefit design is not only about reducing financial barriers, it can also include rewards and incentives that are tied to medical adherence and active participation in care management activities. For example, an incentive can be provided to members when they visit a high-quality provider or adding a reward for maintaining weight and completing the food intake log.
Step 5: Go beyond access to virtual care
Digital and virtual care provide a unique opportunity for employers and health plans to complement existing care models to improve access, continuity of care, and care management for vulnerable communities. Using the VBID principles, they can enhance the coverage of telemedicine for targeted members. However, it requires more than providing them subsidized access to care. Americans with lower levels of education, lower income levels, and who live in rural areas report lower rates of smartphone ownership. Dynamic VBID designs can enable better utilization of Telehealth services and address virtual health inequities by facilitating digital literacy and access to adequate broadband and necessary equipment.
Talk to us if you are looking for implementing benefit designs that align cost-sharing to value and advance your health equity initiatives. See how our dynamic benefit solution can help you drive down cost trends and improve the quality of care for targeted populations with equity gaps.