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Advancing the use of incentives for health behaviors

The use of incentives to reward healthy behavior is not new, and many employers and health plans have been doing it for decades. But now, technology companies are introducing reward programs for consumers who go to lower-cost providers or get routine, recommended preventive screenings.

A few companies are expanding their core related services to develop online consumer comparison shopping tools. These tools allow consumers to earn cash incentives when they sign up through their employer or health plan and choose cost-effective care. For example, Vitals, a company most known for its physician ratings, has reported that its program helped employers save $12 million while consumers earned almost $1.5 million in rewards. Though the most expensive episodes of care are often unplanned, some services lend themselves to comparison shopping before people use the services. The key ingredient for these incentive programs to work is not only accurate price information but also information about quality to make sure people find high value care.

Another company, HealthEngine, rewards people up to $500 for getting recommended preventive services. Typically these services are covered with no cost-sharing because of a provision in the Affordable Care Act (ACA), so some employers and insurers offer incentives to consumers to encourage them to get the recommended care.

Related: A study published in Health Affairs this month highlighted a value-based insurance design (VBID) initiative in the state of Connecticut that found that relative to comparison states, during the program’s first two years, the use of targeted services and adherence to medications for chronic conditions increased while emergency room use decreased. Lipid testing among program participants increased by 15.4 percentage points in year one, and colorectal cancer screening rates increased by 5.6 percentage points. Connecticut was an early adopter of reducing cost-sharing for a variety of high-value health care services for state employees. Employers and health plans are interested in VBID as a tool that may reduce costs down the road by encouraging prevention and chronic care management early.

In March, CMS solicited public comment on use of VBID in Medicare Advantage plans. CMS will test VBID plans in Medicare Advantage in seven states beginning in January 2017 to see if structuring benefit design around certain clinical categories (typically chronic diseases) that are designed to reward the use of specific recommended therapies leads to improved quality of care and reduced costs in Medicare Advantage. Previously, Medicare Advantage plans have been prohibited from using VBID since it would mean varying benefit design for enrollees based on their health status, which had not been allowed. Under the ACA, CMS can now test innovative care delivery models like VBID. While the model will start with diabetes, chronic obstructive pulmonary disease, congestive heart failure, and patients with certain heart conditions, CMS is asking for input on what other conditions it could incorporate in the future.

Richard A. Hirth et al, Health Affairs, “Connecticut’s value-based insurance plan increased the use of targeted services and medication adherence,” April 2016

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Author bio

Doug leads Deloitte Consulting LLP’s Life Sciences and Health Care practice. With 24 years of experience, he works closely with multiple top health care organizations on major clinical and enterprise transformation efforts and on large-scale technology implementation projects. Doug has extensive experience in comprehensive quality and patient safety transformations, turnaround and performance improvement in academic medical centers as well as organization/workflow redesign and technology enablement. He has served as the lead on a number of enterprise transformation initiatives with some of Deloitte’s most largest and most complex clients.