Tag Archives: Value-Based Insurance Design

Here’s why specialty pharmaceuticals need value-based insurance design

Image by Bill Brooks via flickr.

Image by Bill Brooks via flickr.

This spring, Gilead Sciences Inc. introduced Solvaldi, a drug that could cure the liver virus that causes hepatitis C. The drawback, however, was the cost of $84,000 or about $1,000 per pill, as Julie Appleby reported at Kaiser Health News.

“And that price tag is prompting outrage from some consumers and a scramble by insurers to figure out which patients should get the drug – and who pays for it,” she wrote.

Bernard Munos wrote in Forbes that the cost of one recently introduced cancer medication was $66,000 and another was $90,000.

At such high prices, consumers may be unable to afford these medications and insurers may not cover them. If insurers do cover these high-priced drugs, they may require patients to pay the typical copayment of 30 percent or more.

In a new report from the University of Michigan Center for Value-Based Insurance Design (V-BID Center) and the National Pharmaceutical Council (NPC), researchers argue that insurers need a new approach to paying for specialty medications. Continue reading

Report suggests applying value-based insurance design to high-deductible health plans

Image by Dan Simpson via flickr.

Image by Dan Simpson via flickr.

For years, health policy experts have asked whether high-deductible health plans (HDHPs) with health savings accounts (HSAs) cause some patients to forego needed medical care. Rather than pay their high deductibles, these patients postpone visits to doctors or don’t get other necessary care, policy experts argue.

Now, researchers at the University of Michigan’s Center for Value-Based Insurance Design (VBID), Harvard University Medical School and the Carlson School of Management at the University of Minnesota suggest in a new report that the IRS should expand its definition of preventive services so that employers and health plans can structure incentives under HDHPs so that patients would not sacrifice necessary services. Changing the definition of preventive services would allow patients with chronic conditions to access more covered care, called secondary preventive services, just as insurers cover primary preventive-care services under the Affordable Care Act, meaning no charges, copayments or deductibles.

In a report released today, the researchers said millions of Americans in HSA-qualified HDHPs could benefit from expanded coverage of preventive services. The report was funded by the Gary and Mary West Policy Center. Among the researchers who prepared the report were A. Mark Fendrick, M.D., the director of the VBID center and professor of health management and policy in the School of Public Health at the University of Michigan; Michael E. Chernew, Ph.D., Leonard D. Schaeffer professor of health care policy at Harvard Medical School; and Stephen T. Parente, Ph.D., Minnesota insurance industry professor of health finance and insurance in the Department of Finance in the Carlson School of Management at the University of Minnesota. Continue reading