Do high co-pays cause your employees to skip essential medical services—so you’re paying more to treat a disease than the cost of preventive care? Do your employees show little interest in lifestyle changes that would improve their health and productivity? Then you should consider Value-Based Benefit Design (VBBD).
By lowering co-pays for certain treatments proved to be beneficial and providing other incentives (the carrots), VBBD removes barriers to care. Higher co-pays and deductibles (the sticks) discourage the use of treatments of little value. Higher copays for nonparticipation also get employees off the couch into the lifestyle programs they need.
Some strategies at VBBD pioneers:
Pitney Bowes waived prescription drug co-pays for employees with diabetes and those with asthma. Medical costs fell 12 percent and 15 percent, respectively, for those groups. The company reduced co-pays for certain drugs for employees with heart disease or who were at-risk for the condition. Emergency room visits declined 26 percent and overall health care costs fell.
Hannaford Brothers Company lowered drug co-pays for diseases including diabetes and offered incentives to use certain providers for minimally-invasive procedures. The company saved money through better diabetes control, decreased risk of heart attacks, and more use of minimally-invasive surgery, which reduced hospital stays.
Marriott International lowered prescription co-payments for diseases such as asthma, cardiovascular disease, and diabetes. The company reported savings from proper medication use, which prevented expensive medical emergencies.
So who shouldn’t consider VBBD? Employers with a high employee turnover, young and healthy employees with few chronic conditions, and employees with high compliance for chronic disease medications. Smaller employers may find that the costs of data collection and analysis, communication strategy, and evaluation are too high in light of the potential benefit.
Essentials in implementing VBBD:
- It cannot be a one-off program. VBBD must be a multiyear undertaking and communication must be extensive.
- Establish clear, concrete program goals and metrics to track results.
- Senior leadership buy-in is key; progress should be reported throughout the company on a regular basis.