The marketing concept of "value" is being thrown around a lot in health care today. In the traditional sense, value is simply the difference between the real or perceived benefits one receives compared to the cost. When the cost exceeds the benefit- there is no value. It's really pretty simple.
Our health care system has had a tough time defining its "value proposition" in many areas. And, as we compare our health care costs with some of the basic statistics used to measure our results and the benefits we receive- we may determine we have a questionable value proposition indeed.
A new study by CVS Caremark determined that "reducing health care costs" is the number one measure of success for employers when facing the ongoing challenges of providing health care benefits to employees. It's not limiting the amount of increase (like we heard about a few weeks ago), it's reducing health care costs.
Employers are looking at all options to get a handle on the health care cost crisis. They are looking at ways to determine the value they receive from all of the dollars that they spend. And, it hasn't been an easy road because the concept of "value" while always implied, has never been a focal point of our current system.
The concept of "evidence-based benefit plans" or "value based benefits" are new methods health plans and employers are attempting to use to incent individuals to comply with care management plans or utilize the right providers. Quite simply, the concept is designed to reduce any financial barriers (through reduced copayments) for patients to access the care that has proven to be the most beneficial.
The University of Michigan initiated a study in 2006 to determine if the removal of financial barriers to patients would result in an uptick in adherence to care management plans and a more efficient use of resources for diabetic patients. This was really the first effort to measure the impact a change in the benefit structure could have on the utlization patterns, outcomes, costs, and the value gained for this high-risk population. While the results are not final, we would hope the study would help the health care industry to define the "value" these targeted services provide for the system and for the individual patient/consumer.
Our health care system has had a tough time defining its "value proposition" in many areas. And, as we compare our health care costs with some of the basic statistics used to measure our results and the benefits we receive- we may determine we have a questionable value proposition indeed.
A new study by CVS Caremark determined that "reducing health care costs" is the number one measure of success for employers when facing the ongoing challenges of providing health care benefits to employees. It's not limiting the amount of increase (like we heard about a few weeks ago), it's reducing health care costs.
Employers are looking at all options to get a handle on the health care cost crisis. They are looking at ways to determine the value they receive from all of the dollars that they spend. And, it hasn't been an easy road because the concept of "value" while always implied, has never been a focal point of our current system.
The concept of "evidence-based benefit plans" or "value based benefits" are new methods health plans and employers are attempting to use to incent individuals to comply with care management plans or utilize the right providers. Quite simply, the concept is designed to reduce any financial barriers (through reduced copayments) for patients to access the care that has proven to be the most beneficial.
The University of Michigan initiated a study in 2006 to determine if the removal of financial barriers to patients would result in an uptick in adherence to care management plans and a more efficient use of resources for diabetic patients. This was really the first effort to measure the impact a change in the benefit structure could have on the utlization patterns, outcomes, costs, and the value gained for this high-risk population. While the results are not final, we would hope the study would help the health care industry to define the "value" these targeted services provide for the system and for the individual patient/consumer.
Dan Ariely (Professor of Behavioral Economics at MIT) wrote a fascinating book on how we (as individuals) make our decisions based upon sometimes irrational behavior. Yes, money has some influence to incent us in one way or another, but there are other "predictably irrational" influences at hand. As our health care system stuggles to determine its value, let's hope that the financial benefit designs are not the only methods we use to get people to do the right things.
It's about education, open communication, and transparency- when all three of these come together, we will have a better sense of value for our health care system- and for ourselves.
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