Health Insurance and You!

How do you measure the value of a particular treatment? Some analysts define it as “the clinical benefit achieved for the money spent,” according to an article by Mari Edlin of California Healthline. This definition recognizes the fact that while the dollar cost of a certain procedure may be fixed, it may be more or less effective, and more or less necessary, for different groups of patients.

A new approach known as value-based insurance design (VBID) takes those factors into account. Ms. Edlin writes that the VIBD model includes adjustments to copayments and coinsurance, shared decisionmaking, network design, incentives for maintaining health, and disease management. Insurers are currently working on value-based health insurance plans with financial incentives for healthy behaviors.

Transparency of information on costs and outcomes for various patient groups is key to VBID, because this data helps patients and providers decide which treatment course to take.

Rewards for good health are another important piece of the model. Starting in 2014, employers will be allowed to reimburse employees who reach certain health and wellness targets up to 30% of their premiums. Other incentives include reducing or eliminating coinsurance for in-network providers and deposits into employees’ health savings accounts.

Ms. Edlin describes another approach to VBID known as “reference pricing,” in which there is a standard price for any treatment (including medication), and plan members cover any costs beyond that standard. Reference prices are best suited to procedures with little variation in quality that, for some reason, vary widely in cost. But when a more expensive provider does offer better quality and outcomes, they are less useful and may in fact mislead patients.

Readers, how do you define the value of a health care procedure? How do you decide whether a treatment is worth it?