Center for Evidence-based Policy 1

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1 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 More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other to total extinction. Let us pray we have the wisdom to choose correctly. Woody Allen Systems are perfectly designed to get the results they achieve. Center for Evidence-based Policy 1

2 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 We are drowning in information but starved for knowledge. John Naisbitt Megatrends, 1982 Center for Evidence-based Policy 2

3 The current state of health care Contradictions/Inequities Creating tension Successful models Window for innovation Contradictions Most expensive health care system in the world. Overall outcomes are average at best. Many health environments are unsafe. Enormous variation continues. Corruption in health care has become common Inequities Almost 2 million adults (almost 1%) file for bankruptcy every year 28% major factor = illness/injury 27% leading factor = uncovered medical bills 21% cite loss of income due to illness 75% had health insurance Average age in forties, over 90% middle class HEALTH CARE COSTS NOW THE MAJOR CAUSE OF BANKRUPTCY Center for Evidence-based Policy 3

4 Creating a tension Information strategies Evidence-based medicine Transparency/conflict of interest Information technologies Delivery system reform Safety Corruption Explicit rationing Disasters/pandemics/bioterrorism Successful Models VA---flat budget per capita, electronic record system, focus on evidence RX benefit approaches Oregon Health Plan Window for Innovation Emergence of a vision Demand for change Availability of tools---like benefit design Center for Evidence-based Policy 4

5 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 Center for Evidence-based Policy 5

6 Financial Protection vs. Health Financial Protection Indemnity individual financial protection; little concern for the financial protection of the whole. 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 Increased costs Lack of competition Litigation Mandates Consequences Consumer Driven Good preventive coverage 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 Center for Evidence-based Policy 6

7 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 Center for Evidence-based Policy 7

8 Strategies to Overcome Systematic approaches---more evidence available than we realize 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 Center for Evidence-based Policy 8

9 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 Center for Evidence-based Policy 9

10 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 Appendicitis Category 2: Maternity care Pregnancy Category 3: Acute fatal condition, treatment prevents death without full recovery Severe head injury Category 4: Preventive care for children Preventive services birth to 10 years of age Category 5: Chronic fatal condition, treatment improves life span and quality of life Type I Diabetes Category 6: Reproductive services (excluding maternity and infertility services) Birth Control Category 7: Comfort care Terminal illness regardless of cause Category 8: Preventive dental care Preventive dental services Category 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 Gonorrhea Category 11: Chronic non-fatal condition, one-time treatment improves quality of life Kidney stones Category 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 cysts Category 14: Self-limiting conditions where treatment expedites recovery Mononucleosis Category 15: Infertility services Services improving fertility Category 16: Less effective preventive care for adults Ineffective preventive care USPSTF C, F & I Category 17: Fatal or non-fatal condition, treatment causes minimal or no improvement in quality of life Benign skin tumors Center for Evidence-based Policy 10

11 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 Center for Evidence-based Policy 11