Transcript Federal Health Reform in Oregon

Building on Evidence:
Oregon’s Efforts on Value-Based Benefit
Design
Jeanene Smith MD, MPH
Office for Oregon Health Policy and Research
Oregon Health Authority
October 2011
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Oregon’s Value-Based Benefit Design Development
• State originally directed by legislature in 2007 to “develop
recommendations for defining a set of essential health services
that would be available to all Oregonians under a comprehensive
reform plan.”
• Focus on using value-based benefit approach in setting levels of
cost sharing and use in state purchased plans of OHA (20-30% of
lives in most parts of Oregon).
• Also considering how to offer in the Exchange and fit inside set
cost sharing limits/income levels & Essential Benefits
• Underlying methodology based on Oregon’s Prioritized List
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Oregon Has Long History With Evidence-Based
Benefit Design
• Prioritized List of Health Services – uses evidence for defining
Oregon Health Plan benefits since 1994
– Developed and maintained by the Health Services Commission (HSC)
– Services are prioritized according to impact on individual and population
health, based on best available evidence
– Services necessary to determine a diagnosis are covered; list is used to
determine coverage of treatments/follow-up visits
– Ancillary services such a prescription drugs and durable medical
equipment are covered for conditions in the funded region
– Legislature determines funding level (about 3/4 of lines are covered)
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Current Prioritization Methodology:
Step 1: Categories of Care
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Maternity/Newborn Care (100)
Primary & Secondary Prevention (95)
Chronic Disease Management (75)
Reproductive Services (70)
Comfort Care (65)
Fatal Conditions – Disease Modification/Cure (40)
Nonfatal Conditions – Disease Modification/Cure (20)
Self-limited Conditions (5)
Inconsequential Care (1)
Current Prioritization Methodology:
Step 2: Individual/ Population Impact Measures
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Impact on Health Life Years (+ 0 to 10)
Impact on Suffering (+ 0 to 5)
Population Effects (+ 0 to 5)
Vulnerability of Population Affected (+ 0 to 5)
Tertiary Prevention (+ 0 to 5)
Effectiveness (x 0 to 5)
Need for Medical Services (x 0 to 100%)
Net Cost (0 to 5)
Prioritized List: Example of Line Item Scoring
Type II Diabetes Mellitus
Impact on Healthy Life Years: 7
Impact on Suffering: 2
Effects on Population: 0
Vulnerability of Population Affected: 2
Effectiveness: 4
Need for Service: 1
Category 3 (Chronic Dz Management) Weight: 75
Net Cost: 4
Total Score: 3300  Line: 33
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Oregon’s Prioritized List of Health Services
Line Number
1
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Examples of Services
Coverage
Maternity care
101
Treatment of moderate to severe head injury
201
Medical therapy for acute pancreatitis
301
Treatment for rheumatic heart disease
401
Laser therapy to prevent retinal tear
501
Treatment for benign breast disorders
551
Treatment for plantar fasciitis
651
Treatment for acute viral conjunctivitis
Covered
Not Covered
Maintenance of the Prioritized List
• Biennial review of list
– Review of new evidence on existing treatments
o New information on effectiveness my be used to move service up/down the list
o Must have evidence of harm or ineffectiveness to take off list
• Interim modifications
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Correct errors
Add appropriate pairings of codes
Delete inappropriate pairings of codes
Incorporate new medical codes
o Review of evidence for new treatments, must be more effective or as effective but
lower cost to add to list
– Incorporate/revise guidelines
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Oregon’s Value-Based Benefits Design
• Little or no cost sharing for:
– Value-based services
– Basic diagnostic services
– Comfort care
• Tiered coinsurance/copays for other services
– Four tiers based on evidence methodology of Prioritized List
– Lower cost sharing for primary care outpatient services
• Use of an evidence-based drug formulary also suggested
• Some excluded services as in commercial plans
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Oregon’s Value-Based Benefits Package
Service Tier
Value-Based
Tier 1
(Lines 1-112)
Examples of Services
Cost Sharing
Routine vaccinations, prenatal care, chronic illness
management, smoking cessation treatment
0-5%
Highly effective care for severe chronic disease and lifethreatening illness & injury (e.g., rheumatoid arthritis,
heart attack, low birth weight)
Low
Effective care of other chronic disease and life-threatening
(Lines 113-311) illness & injury (e.g., glaucoma, breast cancer, ADHD)
Moderate
Effective care for non-life-threatening illness & injury (e.g.,
(Lines 312-502) ear/sinus infections, herniated disk, reflux, dentures)
High
Tier 2
Tier 3
Less effective care and care for self-limited illness and
minor illness & injury (e.g., chronic low back pain, viral
(Lines 503-679)
sore throat, seasonal allergies, acne)
Tier 4
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Highest
20 Sets of Value-Based Services in Oregon’s
Value-Based Benefit Package
•Value-based services are medications, tests, or treatments that
are highly effective, low cost, and have a lot of evidence
supporting their use
•Most of these services should be provided via outpatient care –
ideally in a patient-centered primary care home
•These services should be offered at NO cost to patients (no
copays or coinsurance) in order to encourage use of these
services given their high level of benefit
Goal: Have these services used as much as possible
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Remove Barriers to Care:
Examples of Value-Based Services
Diabetes
• Meds: Insulin, oral glucose lowering drugs
• Labs: Hba1c (blood test to check diabetes control)
• Other services: Eye exams
Congestive Heart Failure (CHF)
• Meds: Generic blood pressure meds (beta-blocker, ACE inhibitor, diuretic)
• Labs: Annual blood count (CBC), metabolic panel (CMP), cholesterol/lipid
profile, urine test; thyroid test (TSH), once
• Other tests: EKG, echocardiogram
• Other services: Nurse case management
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Hypothetical Example—Silver Level Plan
Robert is single, earns $20,000 per year
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He purchases insurance through an insurance exchange
He will get tax credits to assist with his premium
He chooses a VBBP with 10%/30%/50%/70% tiered coinsurance
His deductible is $300; out-of-pocket max is $1,600 – amounts
limited due to his income level
• Plan uses an evidence-based formulary for medications
– $10 for generic,
– $30 for preferred,
– 50% for nonpreferred
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Robert Has Type 2 Diabetes
– His insulin, eye exams, and diabetic labs/supplies are covered with
little or no cost sharing since part of value-based services
– His doctor finds a diabetic foot ulcer, and refers him to a surgeon and
prescribes a generic antibiotic
• No cost sharing for preventive service visit
• For the antibiotic, Robert pays a $10 copay based on an evidencebased formulary
– The surgeon treats the ulcer; cost: $2,000
• This Tier I service has 10% coinsurance
• $300 applies to deductible, and Robert pays 10% of the remaining
$1,700 for a total out-of-pocket cost of $470
Note: Today, in a typical commercial plan out-of pocket costs would be
$810 plus exams, diabetic meds and supplies copays
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Preliminary Actuarial Analysis: Expected
Utilization Offset Due to Change in Cost Sharing
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VBS – moderate increase (10-20%)
Tier I – modest increase (5-10%)
Tier II – None
Tier III – modest decrease
Tier IV – moderate decrease
Rx – moderate decrease
Diagnostic services – varies
Ambulance/ED – None*
Overall initial savings estimated 3-5% using commercial
data from Oregon Educators Board plan
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Initial Value-Based Benefits Focus Group Findings
Who: Insurers, agents/producers, providers, hospitals, large and small
employers, consumers (insured and uninsured), and consumer advocates
Key Points:
• Value-based/low or no cost-sharing services are appealing
• Wellness must have an even greater emphasis
• Levels and tiers are complicated
• Concern that benefit design is “one-size fits all” approach
• Amount of education and communication required to introduce this
benefits design is daunting
• Concern about who decides what’s important and in what tiers
• Benefit design has some inherent inequities
• Premiums must be significantly lower to be attractive
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In Summary – Oregon’s Value-Based Benefit
Design
• Furthers Oregon’s Triple Aim by incenting the most
effective services
• Furthers value-based design plans in use by health care
purchasers now
• Oregon is intent on applying it to state-purchased lines of
coverage now (state employees, school districts) and
considering how to couple with payment reform
• Preliminary review shows that the Oregon’s VBBP cost
sharing could be adjusted to fit federal reform limits
• Flexibility allowed through federal regulations on valuebased benefit design would be helpful
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For More Information:
Background Documents :
Oregon Health Services Commission (HSC)
http://www.oregon.gov/OHPPR/HSC/index.shtml
Cost Sharing Work Group
http://www.oregon.gov/OHPPR/HealthReform/CostSharing/CSW.shtml
Health Fund Board Benefits Committee Final Report
http://www.oregon.gov/OHPPR/HFB/Benefits/FinalRecommendation.pdf
Questions:
Jeanene Smith: [email protected]
Darren Coffman, Director of HSC: [email protected]
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