Evidence-based Benefit Design JOHN SANTA MD MPH Grant Administrator Attorney Generals Consumer and Prescriber Grants Program Center for Evidence-based Policy Oregon Health & Science University

Systems are perfectly designed to get the results they achieve.

“We can’t solve problems by using the same kind of thinking we used when we created them.” Albert Einstein

The Ethics of Pharmaceutical Benefit Management Burton S.L. et al, Health Affairs, 20, #5, Sept/Oct 2001 Accept resource constraints Help the sick Protect the worst off Respect autonomy Sustain trust Promote inclusive decision making

Outline What is benefit design? How did we get to here? Any recent lessons learned? Could evidence improve benefit design? How could evidence by integrated in benefit design in ways that would make a difference? Focus on benefit design language

What is Benefit Design Benefits Delivery system Membership

Benefits Coverage Rules Exclusions Cost sharing Administrative incentives/disincentives

Historical Development Past efforts Employer based-----”earned entitlement” 1960s Medicaid safety net 1960s Medicare-----”earned entitlement” Any “reasonable” benefit covered Successful vs. stressed purchasers Current efforts Managed care in decline “Consumer driven” increasing Prescription drug coverage

Financial Protection vs. Health Financial Protection Indemnity—individual financial protection; little concern for health of the whole population. Better coverage for the more expensive services Minimal limits on choice Poorly informed value determinations Health Prepaid plans—emphasis on prevention and anticipation of illness Better coverage for system approaches Choice limited Implicit value determinations—made by the system

Consequences Increased costs Lack of competition Litigation Mandates

Consumer Driven Good preventive coverage (evidence- based usually) and catastrophic coverage, variable coverage for “middle benefits.” Variably effective information Effective services as likely to be avoided due to cost sharing as ineffective services Obvious information gaps---error rates, adverse events

Prescription drug Tiering Use of evidence Price competition Information competition

State of research evidence Barriers Strategies to overcome them

Barriers Lack of sufficient evidence Credibility and transparency Synthesis and translation Domination by researcher and sellers

Strategies to Overcome Systematic approaches---more evidence available than we realize. Lack of evidence can inform purchasing. Insist on credible, transparent processes Collaborate---no need to duplicate. Synthesis and translation need to be a priority Key questions---purchasers and consumers need to get involved

Integrating Evidence into Benefit Design Credibility, transparency, explicit Systematic evidence synthesis Make financial relationships explicit Anticipate administrative costs Design benefit language that enables evidence to be used effectively

Successful Evidence-based Design Benefit language Incorporates evidence Provides specificity Understood by patients and practitioners Useful terminology Currently used in claims Will be in electronic records Tiers, levels, sliding scales that make sense Financial Admin Facilitates communication

Benefit Design Languages Prescription drugs Condition/Treatment pairs Categories

Prescription Drugs Tiering Generics Variable cost sharing—including no cost sharing especially for “preventive” meds Emergence of evidence Competition

Condition/Treatment Pair Diagnosis: ALLERGIC RHINITIS AND CONJUNCTIVITIS, CHRONIC RHINITIS Treatment: MEDICAL THERAPY ICD-9: ,372.14,372.54,372.56,472,477,995.3,V0 7.1 CPT: 30420, , , , ,99024,99070,99078, , , Line: 597

Condition/Treatment Pairs 700+ Pairs Can be administered by insurers and medical groups Provides a stable actuarial base Explicit use of evidence ?Too much information

Category Approach Groupings of Condition/Treatment pairs Acute, Chronic, Preventive, Other Effectiveness Importance

Category 1: Acute fatal condition, treatment prevents death with full recovery AppendicitisCategory 2: Maternity care PregnancyCategory 3: Acute fatal condition, treatment prevents death without full recovery Severe head injuryCategory 4: Preventive care for children Preventive services birth to 10 years of ageCategory 5: Chronic fatal condition, treatment improves life span and quality of life Type I DiabetesCategory 6: Reproductive services (excluding maternity and infertility services) Birth ControlCategory 7: Comfort care Terminal illness regardless of causeCategory 8: Preventive dental care Preventive dental servicesCategory 9: Proven effective preventive care for adults Preventive svcs with proven effective services above age 10 USPSTF A & B Category 10: Acute non-fatal conditions, treatment causes return to previous health state GonorrheaCategory 11: Chronic non-fatal condition, one-time treatment improves quality of life Kidney stonesCategory 12: Acute non-fatal condition, treatment does not result in a return to previous health state Internal derangement of knee Category 13: Chronic non-fatal condition, repetitive treatment improves quality of life Breast cystsCategory 14: Self-limiting conditions where treatment expedites recovery MononucleosisCategory 15: Infertility services Services improving fertilityCategory 16: Less effective preventive care for adults Ineffective preventive care USPSTF C, F & ICategory 17: Fatal or non-fatal condition, treatment causes minimal or no improvement in quality of life Benign skin tumors

Category Approach ACUTE CONDITIONS/TREATMENTS Category 1:Acute fatal condition, treatment prevents death with full recovery Category 2:Acute fatal condition, treatment prevents death without full recovery Category 3:Acute non-fatal conditions, treatment causes return to previous health state Category 4:Acute non-fatal condition, treatment does not result in a return to previous health state PREVENTIVE CARE Category 1:Maternity care Category 2:Preventive care for children Category 3:Preventive dental care Category 4:Proven effective preventive care for adults Category 5:Less effective preventive care for adults (including pregnant women), children CHRONIC CARE Category 1:Chronic fatal condition, treatment improves life span and quality of life Category 2:Chronic non-fatal condition, one-time treatment improves quality of life Category 3:Chronic non-fatal condition, repetitive treatment improves quality of life OTHER CATEGORIES Category :Reproductive services (excluding maternity and infertility services) Category :Infertility services Category :Fatal conditions, comfort care Category :Fatal/non-fatal condition, treatment causes minimal/no improvement in quality of life Category :Self-limiting conditions where treatment expedites recovery

Final Comments Benefit design a key tool Emergence of electronic records, systematic approach to evidence, creates tools Evidence not the only factor “Not for the faint of heart.” “Get serious or explore other options” Redefine the playing field via benefit design

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