National Academies Press: OpenBook
« Previous: 10 Regulators
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

11
Insurers

Coordinator


John W. Rowe, Columbia University

(former Chief Executive Officer, Aetna)


Other Contributors


Carmella Bocchino, America’s Health Insurance Plans; George Halvorson, Kaiser Permanente; Carmen Hooker Odom, State of North Carolina Department of Health and Human Services; Mark McClellan, AEI-Brookings; Leslie Norwalk, Centers for Medicare and Medicaid Services; Steve Udvarhelyi, Independence Blue Cross

SECTOR OVERVIEW

The Institute of Medicine’s (IOM’s) Roundtable on Evidence-Based Medicine seeks to transform the way in which medical evidence is generated and used to improve health care. This is a goal strongly supported by the insurer sector, as evidenced by this sector’s continual evolution of tools and techniques designed to encourage excellence in medical practice and improve the value of the health care provided. This chapter describes the strategies already under way within the insurer sector (i.e., health insurance plans and public payers) and also sets out the insurer sector’s sugggestions for furthering this necessary transformation through a shared and collaborative effort.

Insurer Sector Profile

The United States spends nearly 16 percent of its gross domestic product—or $2 trillion—on health care, more than any other developed nation. In 2005, private health insurance plans were the largest payers for healthcare services, with payments from health insurance plans and other private spending, including consumers’ out-of-pocket costs, accounting for almost

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

55 percent of total healthcare expenditures (approximately $1.09 trillion of the $2 trillion) (CMS, 2005). Employment-based coverage continues to be the primary vehicle for private coverage, with 155 million nonelderly workers receiving such coverage in 2005 (Claxton et al., 2006). The different health insurance plan types are all represented within employment-based coverage, with 60 percent of workers covered by preferred provider organization (PPO) networks, 20 percent by health maintenance organizations (HMOs), 13 percent by point of service (POS) plans, 4 percent by high-deductible health insurance plans with a savings option, and 3 percent by conventional plans (Claxton et al., 2006). The top 10 providers of private health insurance in the United States cover approximately 115 million lives enrolled in the health plans’ fully and self-insured managed care products, including HMOs, PPOs, POS plans, Medicaid and the State Children’s Health Insurance Program (SCHIP), Medicare, fee-for-service managed medical plans, and consumer-directed health plans. The enrollments in the different health plans include 27 million for WellPoint, Inc., 22 million for UnitedHealth Group, Inc., 14 million for Aetna, Inc., 12 million for the Health Care Service Corporation, 9 million for CIGNA Health Care, 9 million for Kaiser Permanente, 8 million for Humana, Inc., 5 million for Blue Cross Blue Shield of Michigan, 5 million for Highmark, Inc., and 4 million for the Health Insurance Plan of New York. Of these health plans, Kaiser Foundation Health Plan, Inc. and Blue Cross of California lead in HMO enrollment, at 5.6 million and 1.5 million enrollees, respectively (AIS Health, 2007).

Public spending—including that by the Medicare, Medicaid, SCHIP, U.S. Department of Defense, and U.S. Department of Veterans Affairs (VA) health benefits programs—accounted for the remaining 45 percent of total healthcare expenditures (CMS, 2005). In 2007, there were 43.5 million people enrolled in either Medicare Part A or Part B, or both, which included 8 million enrollees participating in a Medicare Advantage plan (CMS, 2007a). Approximately 7.9 million veterans received benefits through VA (2006); and another 9.2 million active-duty personal, retirees, and dependents received care under TRICARE (2005) (U.S. Department of Veteran’s Affairs Office of Public Affairs Media Relations, 2007; U.S. Government Accountability Office, 2007). During 2006, almost 7 million children were enrolled in SCHIP at any one time, and in 2005, 58 million people received at least one health benefit through Medicaid (Congressional Budget Office, 2007; Kaiser Family Foundation, 2007).

The private health insurance plan sector is represented by America’s Health Insurance Plans (AHIP), a trade association that represents the full spectrum of health insurance plans, and the Blue Cross and Blue Shield Association (BCBSA), a licensing entity that represents those health insurance plans that are licensed to use Blue Cross and Blue Shield service marks in exclusive service areas.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
America’s Health Insurance Plans

AHIP is the national association that represents nearly 1,300 companies providing health insurance coverage to more than 200 million Americans within the group and individual health insurance markets as well as government programs. Their members offer medical expense insurance, long-term care insurance, disability income insurance, dental insurance, supplemental insurance, stop-loss insurance, and reinsurance to consumers, employers, and public purchasers. AHIP represents 90 percent of all the accident and health insurance business in the United States; and AHIP members include commercial insurance companies, most Blue Cross Blue Shield plans, managed care organizations, self-funded plans, PPO networks, third-party administrators, disease management organizations, and reinsurers.

AHIP’s goal is “to provide a unified voice for the health insurance industry, to expand access to high quality, affordable health care for all Americans, and to ensure Americans’ financial security through robust insurance markets, product flexibility and innovation, and an abundance of consumer choice.” The organization represents member interests on legislative and regulatory issues at the federal and state levels and with the media, consumers, healthcare professionals, and employers (America’s Health Insurance Plans, 2004).

Blue Cross and Blue Shield Association

BCBSA is the national federation of the 39 independent and locally operated Blue Cross and Blue Shield companies, which collectively provide healthcare coverage for more than 98 million Americans. BCBSA is a leading supplier of business strategy, technical support, healthcare services, and consulting expertise for its member companies. BCBSA and the Blue Cross and Blue Shield companies work to strengthen the movement to greater transparency in health care by providing increased detail about healthcare trends, quality, cost, and best practices (BlueCross and Blue Shield Corporation, 2007).

Today’s Environment and Challenges for Change

For much of the 1990s, healthcare costs rose at a slower rate than they had during the previous decade. After a period of relatively low cost growth in the mid-1990s, costs began to rise again, resulting in a health insurance premium growth that peaked at 13.9 percent in 2003 (Claxton et al., 2007). Not surprisingly, the number of uninsured Americans grew during this same time period, rising from 14 percent in 2000 to 15.3 percent in 2005. Although the growth in premiums has slowed over the last three consecu-

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

tive years (2003 to 2006), healthcare costs continue to outpace inflation and place significant pressure on the cost of insurance coverage, as evidenced by the approximately 46 million Americans who remain uninsured.

Although a wide range of drivers of rising costs have been suggested, there are several that are generally agreed to be key contributors. These generally agreed-upon drivers include new treatments and higher-priced technologies; the increased bargaining power of providers; increased consumer demand; an aging population; and chronic conditions associated with obesity, smoking, and substance abuse.

Accompanying these rising healthcare costs and, many would argue, contributing to these costs is the fact that medical care has become notorious for wide regional variations in treatment, the significant underuse and misuse of recommended best practices, and an undue reliance on treatments of little or no value. Research has consistently shown that Americans receive healthcare services in accordance with the latest scientific evidence only about half of the time. A 2003 RAND study reported that, on average, Americans receive the recommended medical care less than 55 percent of the time, with little difference shown when the care provided is divided into preventive care (54.9 percent), acute care (53.5 percent), and care for chronic conditions (56.1 percent). Research by John Wennberg and others has concluded that evidence-based medicine plays virtually no role in governing the frequency of use of supply-sensitive services and that most of the care provided is driven by other factors, such as the numbers of physicians and hospital beds in a given market, and the widely held assumption that more medical care means better care (Wennberg, 2007).

Additional research conducted over the last two decades by Wennberg’s group has effectively demonstrated the wide variation in care received by patients across the country. For example, one study demonstrated that care was consistent with evidence-based guidelines less than 20 percent of the time in 10 of the 306 hospital referral regions in the United States and in only 8 regions was care consistent with medical evidence more than 80 percent of the time (Wennberg and Cooper, 2007). Despite such research, there continue to be examples of treatments widely adopted and used outside the boundaries of supporting evidence that are later found to offer no advantages to existing treatments (e.g., the use of drug-eluting stents for the treatment of coronary artery disease) and, in some cases, to even be harmful (e.g., rofecoxib [Vioxx]).

Legislative and regulatory processes have also contributed to some of the problems of overuse, underuse, and regional variation. The provision of high-dose chemotherapy following an autologous bone marrow transplant (HDC/ABMT) is a prime example of the influence that legislative and regulatory processes can have. In the 1990s, physicians began performing HDC/ABMT for women with late-stage breast cancer, often forgoing stan-

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

dard chemotherapy treatment. Given that there was virtually no good evidence supporting the safety and effectiveness of HDC/ABMT, many health insurance plans denied coverage for the procedure. In response, physicians, patients, and policy makers successfully lobbied state legislatures to pass legislation mandating that health insurance plans provide coverage for this treatment. It was not until 1999 that the preliminary results of five clinical trials for HDC/ABMT showed that the treatment was no better in extending survival than standard treatment and, in fact, posed higher risks of toxic side effects. In addition, because this treatment had become so widely used before its effectiveness had been assessed, many women declined to enroll in clinical trials for HDC/ABMT for fear of being assigned to the standard treatment control group. It took years longer than it might have to gather the evidence showing that HDC/ABMT is an ineffective, risky, and expensive procedure.

The current trends in both cost and quality, coupled with the influence and expectations of legislators, regulators, consumers, and purchasers, have resulted in an environment fraught with significant challenges to the promotion of evidence-based decision making. Yet those same challenges represent the very reasons why such a transformation is necessary. A healthcare system that relies on evidence-based decision making will (1) improve the quality of healthcare delivery; (2) maximize the value and effectiveness of the nation’s investment in health care; and (3) help guide providers, consumers, health insurance plans, and purchasers in making decisions pertaining to treatment and benefit design.

ACTIVITY CATEGORIES

Private Sector

From individual health insurance plan efforts to health insurance plan consortium activities, such as those of the HMO Research Network,1 to industry-wide initiatives led by AHIP and BCBSA, the private health insurance plan sector has led the way in adopting strategies to improve the value of health care by using medical evidence to enhance both quality and affordability. The widespread adoption of these strategies also helps stimulate the interest in and development of further evidence.

1

The HMO Research Network is a consortium of 15 HMO organizations that have formal, recognized research capabilities with a mission to use its collective scientific capabilities to integrate research and practice for the improvement of health and health care among diverse populations. Its database includes information on more than 12 million covered lives. More information can be found at http://www.hmoresearchnetwork.org/.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

Below are selected examples of how medical evidence is used in developing medical policy, benefit design, network design, and provider reimbursement arrangements.

Pharmacy Management

Health insurance plans use pharmacy and therapeutics (P&T) committees—which comprise physicians, pharmacists, and other healthcare professionals—to research the scientific evidence on what works and review the available cost and comparative effectiveness data to determine which drugs should be placed on formularies.

Utilization Management

Early in their evolution, health insurance plans relied on utilization management programs as a tool to promote evidence-based care and the cost-effective use of healthcare resources. These programs screened recommended care against evidence-based guidelines to reduce unnecessary variations in practice and to identify care that was inappropriate or unsupported by the medical evidence. However, pressure from consumers, providers, and legislators forced health insurance plans to significantly curtail their utilization management programs, which has led to continuing issues with healthcare quality and which has prompted health insurance plans to seek alternative ways to promote quality and cost-effective care.

Coverage of New Technologies and Services

Drawing on the latest scientific findings on effectiveness and value, health insurance plans use internal staff and processes to guide the creation of medical policy, including decisions about coverage. Many health insurance plans conduct their own assessments of new technologies and services or commission external technology assessments by academic or private groups to help inform their internal deliberations. All health insurance plans base their medical policies on evidence, with each creating its own method for gathering evidence and weighing it in relation to the values of various stakeholders to seek high-quality and efficient care. Recognizing that there is inadequate evidence to determine the appropriate role for experimental or investigational interventions, health insurance plans have promoted the more rapid development of new evidence by covering routine care costs for patients enrolled in clinical trials that are appropriately designed to study experimental and investigational interventions and not covering the costs when patients are not enrolled in such trials.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Disease Management and Wellness

Health insurance plans have developed a new generation of tools to ensure that the coordination of care and that the delivery of evidence-based medicine are complementary, particularly for individuals with multiple chronic or complex conditions, because these individuals are often treated by multiple healthcare professionals. Through their use of health risk assessments, health insurance plans can offer patients and providers customized tools that they can use to modify behavior, encourage the use of preventive care, monitor potential medication interactions, and improve health. As part of this approach, many health insurance plans have reduced or eliminated altogether the cost sharing for maintenance drugs or preventive services that reduce the likelihood of hospitalization, such as asthma controller medications. Additionally, many health insurance plans have incorporated fitness benefits more widely into their benefit designs. By profiling the actual care received and comparing it with evidence-based recommendations, identifying gaps, and working to close those gaps, health insurance plan disease management and wellness programs maximize an opportunity to advance nationally recommended preventive services, among other types of recommended care.

One of the most successful models of disease management and wellness programs relies on health coaching to promote behavior changes. Under this model, patients who have been identified as being at risk for a disease or complications from a chronic disease are offered the opportunity to work with a healthcare professional trained as a health coach. The health coach helps the patient make life style changes that improve his or her health, increase compliance with physician treatment plans, and address unmet health and social service needs.

Despite the conclusion from a recent Congressional Budget Office analysis that it is too early to estimate the impact that disease management programs are having on overall healthcare spending, the market response to disease management suggests that health insurance plans and employers are finding that disease management provides good value. A national study that used data from a large health insurance plan in 10 urban areas found that overall costs were significantly lower for full-year program participants with diabetes than for nonparticipants with diabetes, and the purchasers of the disease management program saved more than was spent. The most important source of savings was a 22 to 30 percent reduction in hospitalization, which was beneficial for both patients and providers (Villagra and Ahmed, 2004). A study that evaluated the impact of a heart disease management program on hospital service utilization, as well as the potential costs savings over and above the cost of delivering the program, found that participants experienced 46 percent fewer inpatient days and 49 percent

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

lower inpatient costs than the control group, but no significant differences in the rates of emergency department utilization were reported between the two groups (Wheeler et al., 2003).

Pay for Performance

Both public and private health insurers have begun to offer financial and other incentives to providers for delivering higher-quality care. Performance is measured by the use of selected evidence-based standards and performance measures as a method to potentially reverse the perverse incentives of current payment models that lack any recognition of quality performance. By aligning incentives to encourage improvements in patient care, some health insurance plans have already begun to see rising rates of preventive care and improvements in key indicators of patient health. Some studies of pay-for-performance programs have shown an increase in the quality of care received. In one study, the most significant improvements in quality were seen among physician groups with the lowest baseline performance (Rosenthal et al., 2005). Some private insurers are targeting incentives to reward physician groups not only for high absolute performance but also for relative improvements (Rosenthal et al., 2006).

Work with provider professional societies and certification boards in the design and implementation of pay-for-performance programs has resulted in added success and support of these programs. In fact, a 2004 poll of physicians found that 71 percent of physicians supported payments based on the quality of care (Rowe, 2006). Additional support from purchasers, such as the Leapfrog Group, which represents large employers and public purchasers who work to engage consumers and clinicians in improving healthcare quality, led the Medicare Payment Advisory Commission to recommend that Medicare adopt performance-based payment (Galvin et al., 2005).

In a 2007 comparison of the results of the Centers for Medicare and Medicaid Services’ Premier Hospital Quality Incentive Demonstration (HQID) and the Hospital Quality Alliance’s (HQA’s) public reporting initiative, researchers found that hospitals whose public reporting was tied to financial incentives had greater improvements in the quality of care than hospitals that only publicly reported quality data. Although both groups of hospitals showed improvements in each of the individual and compound performance measures, the pay-for-performance hospitals (HQID) that were offered a 1 to 2 percent bonus for achieving high levels of performance compared with the performance of their peers showed a 2.6 to 4.1 percent improvement in quality over a 2-year period (Lindenauer et al., 2007).

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Value-Based Purchasing and Benefit Design

Value-based purchasing and benefit design is a strategy that both purchasers and health insurance plans use to base decisions regarding coverage and payment policies on the value of the treatments or the services provided compared with the underlying costs of those treatments (Clancy, 2006). Under value-based purchasing strategies, value is judged on the basis of a comparison with the best existing alternative and not on the basis of a comparison with a placebo or no treatment. Additionally, value is judged only when marginal benefits can be viewed in the context of marginal additional costs. This analysis of benefits and costs occurs not only at the individual patient level but also because it involves issues of implementation, staffing, and quality assurance within systems of care.

Although the detractors of value-based purchasing and benefit design argue that decisions regarding healthcare coverage should not include costs, others point to the escalation of healthcare spending as an outcome of not considering cost in relation to the amount of additional benefits that new technologies and treatments can provide. Value-based purchasing and benefit design can help break the pattern of wasteful spending and increase the quality of the care provided by basing decisions on both clinical and cost-effectiveness, without leading to all-or-nothing coverage decisions.

Both public and private insurers are already using methods, such as tiered drug formularies and premium networks, that allow consumers to make personal healthcare choices according to what benefits they desire and what risks and costs they are willing to incur. Patients who see physicians outside of the premium network or who take medications in a higher formulary tier may have to pay more in terms of deductibles and or copayments, but the value-based judgment is theirs to make. CMS has already implemented multiple value-based purchasing initiatives (e.g., programs, demonstration projects, pilot programs, and voluntary reporting efforts) in hospitals, physician offices, nursing homes, home health services, and dialysis facilities. Currently under development and scheduled to be launched in 2009 is a value-based purchasing program for Medicare hospital services that will measure and reward performance for the care provided in hospital outpatient settings (CMS Hospital Pay-for-Performance Workgroup et al., 2007).

A recent example of a private insurer working with purchasers and providers to implement value-based purchasing occurred at the Virginia Mason Medical Center in Washington. The insurer completed an analysis of high-quality providers in Seattle and found that the costs in several of Virginia Mason’s subspecialty departments far exceeded the cost benchmarks for the region. To remain the insurer’s high performance network, Virginia Mason worked with the insurer and four of its largest employer clients to implement a cost-reduction strategy. The strategy focused on a set number

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

of conditions and services. The initial results showed a reduction in costs for purchasers and patients, with no adverse impact on patient outcomes (Pham et al., 2007).

Continued progress in the area of value-based purchasing should include the development of a common understanding of the noncost components of value, such as patient preferences and personal values.

State Medicaid Programs

Rising costs have also led state Medicaid programs to place a greater emphasis on value. For example, rising drug costs and decreasing amounts of state funding for Medicaid programs have led states to look for methods by which they may control pharmacy costs, in particular. The Drug Effectiveness Research Project (DERP) is a collaboration of public and private organizations, including 15 state Medicaid programs, that have joined together to share the cost of conducting systematic evidence-based reviews of the comparative effectiveness and safety of pharmaceuticals in many widely used drug classes. The collaboration can then use the results of these systematic reviews to develop public policies or preferred drug lists.

DERP reports contain no cost data and do not recommend specific purchasing policies, which allow partners to use global information to make local decisions on what would be best for the beneficiaries within their states. DERP is a self-governing project, with member organizations voting to set priorities, determining which drug classes will be reviewed, and developing key questions and inclusion criteria for each drug class review. In some states, DERP reports are the sole source of evidence for the support of drug coverage decisions, whereas other states use multiple sources. Some states use DERP reports to validate their own evidence-based clinical reviews or those that contractors develop for them (Hoadley et al., 2007).

Like most large-scale programs, DERP is not without controversy. Some have maintained that DERP reviews tend to include only randomized controlled trials (RCTs), to the exclusion of observational studies (Neumann, 2006). Proponents of DERP counter that DERP reviews do favor RCTs as the “gold standard” of clinical studies, but observational studies are also used to assess the safety of medications. Supporters also consider DERP one of the more transparent research projects ongoing, citing the fact that DERP publishes draft key questions and draft reviews for public comment before finalization (Gibson and Santa, 2006).

The success of DERP led to the formation of a similarly structured project, the Medicaid Evidence-Based Decision Project, which is also a collaboration of state Medicaid programs whose purpose is to better inform clinical coverage issues and benefit design beyond pharmaceutical use. Initiated in June 2006, state collaborators receive access to systematic reviews of

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

the existing evidence on treatments and procedures, assessments of current and new healthcare technologies, support in designing evaluations of products when there are evidence gaps, and access to an information clearing-house (Oregon Health and Science University, 2007). Medicaid programs have used the work of relevant government agencies, such as the Agency for Healthcare Research and Quality (AHRQ) through its Evidence-Based Practice Centers and DEcIDE (Developing Evidence to Inform Decisions about Effectiveness) projects.

Furthermore, some state Medicaid agencies have established independent advisory entities that provide access to the latest evidence for policy decisions. Several state Medicaid programs have also undertaken innovative pilot efforts to improve the quality of care based on principles that originated in the private sector. A number of states have implemented pay-for-performance strategies, such as physician profiling incentive programs in Maine and provider profiling incentive programs in Massachusetts (Llanos et al., 2007). Other states have implemented disease management initiatives through homegrown efforts or commercial vendors. One such demonstration program, Community Care of North Carolina, has had significant success in asthma and diabetes programs, which have been demonstrated to be cost-effective and to have increased the quality of care that they provide according to set performance measures. Savings have been estimated to be $3.5 million for asthma care and $2.1 million for diabetes care (Community Care of North Carolina, 2003; Ricketts et al., 2007).

Medicare Program

Medicare’s Quality Improvement Organization (QIO) program, created in 1982, was developed with the purpose of improving the quality and efficiency of services delivered to Medicare beneficiaries. The QIO program consists of 41 organizations that hold 53 contracts with CMS to provide services in each state, territory, and the District of Columbia. The QIOs work with stakeholders, including consumers and physicians, hospitals, and other caregivers, to improve care delivery systems to ensure that patients get the right care at the right time, with particular attention paid to patients from underserved populations. In addition, QIOs work with physicians and other stakeholder organizations to measure and report on performance and to help with the adoption of healthcare information technology (CMS, 2007d). Announced in 2005 for a 3-year period, the 8th Statement of Work for QIOs focuses on reporting, improving, and rewarding quality within four care settings: nursing homes, home health agencies, hospitals, and physician offices (CMS, 2007c).

Medicare also continues to focus more attention on the use of evidence in coverage, reimbursement, and compensation policies. In 1999 Medicare

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

published a notice in the Federal Register describing for the first time the steps that it follows in the coverage process. The agency also established an independent committee of experts and stakeholders, the Medicare Coverage Advisory Committee, which meets in public to consider complex and controversial coverage-related topics. The progress of all national coverage decisions can be tracked on the CMS website, which also contains detailed documents that summarize all scientific evidence, expert input, and other information that was considered during the policy-making process. CMS’s Coverage and Analysis Group performs rigorous evidence-based reviews of new medical technologies and services to support national coverage decisions. As part of its decision-making process, CMS may also request formal technology assessments from AHRQ.

The Medicare program has also been an innovator in exploring new ways to generate evidence to support its coverage and reimbursement policies. On July 12, 2006, CMS released a guidance document that describes new policies involving national coverage decisions (NCDs) that require the collection of additional patient data as a condition for reimbursement, known as Coverage with Evidence Development (CED). There are two subtypes of CEDs: Coverage with Appropriateness Determination (CAD) and Coverage with Study Participation (CSP).

Under the first subtype, CAD, providers are required to submit additional patient data to databases or registries specifically designed to include data for that treatment at the time that they submit their standard claims data. This supplemental patient data are needed to show that the treatment is being administered appropriately to the correct population noted in the NCD. Under CSP, coverage is linked to participation in clinical studies that produce evidence to guide appropriate care in the future.

The new CED policy requires the development and capture of additional patient data beyond standard claims data as a condition for payment. By doing so, the policy will make available additional clinical information, which will contribute to the medical evidence about a particular healthcare item or service. Private health insurance plans may become more engaged with CED-type initiatives in the future to support this approach to evidence generation (Atkinson, 2007). One such example is the use of a CED approach by a health plan for computed tomographic coronary angiography. By using a collaborative model, the plan is partnering with qualified providers who will contribute data to a registry. Practice patterns will then be analyzed and used to support providers’ efforts to develop, apply, assess, and improve standards for the judicious use of this technology.

Additionally, in December 2006, President George W. Bush signed the Tax Relief and Health Care Act of 2006 (TRHCA). Section 101 under Title I of TRHCA authorized CMS to establish a physician quality reporting system, a voluntary pay-for-reporting program for physicians who treat

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

Medicare beneficiaries known as the Physician Quality Reporting Initiative (PQRI). PQRI enables eligible physicians to receive a financial incentive, totaling 1.5 percent of allowed charges for covered Medicare physician fee schedule services, if they report patient data on 3 of a set of 74 quality measures (CMS, 2007b). Medicare has also developed similar pay-for-reporting programs for hospitals and home health agencies.

LEADERSHIP COMMITMENTS AND INITIATIVES

Strategies for Setting a Higher Bar: Improving Quality Through Better Generation, Dissemination, and Implementation of Medical Evidence

Although the insurer sector has played a leadership role in the ongoing evolution toward a more value-based healthcare system, the quality, cost, and access problems that continue to plague the healthcare system clearly indicate that more can—and must—be done. Several innovative strategies merit expansion and adoption within the private and public sectors to further this evolution.

Set a Course to Support Innovation Essential to the Advancement of Health Care

Systemwide changes are necessary to create the foundation of medical evidence on which a full continuum of quality improvement efforts can be supported. The first crucial step in creating a foundation of medical evidence is to improve the process by which evidence is generated. There currently exists a significant lack of reliable information about what works best—a gap that helps to raise healthcare costs while potentially lowering the quality of health care. Compounding this problem is the fact that a consistent method for evaluating evidence does not currently exist. Despite the clear need to address these issues, the United States is virtually alone among developed nations in not having an entity dedicated to comparing the effectiveness and value of new drugs, devices, and medical procedures with those currently being used.

One model, which is under consideration by the insurance sector, leading economists, and policy makers, is the creation of a new entity, a Comparative Effectiveness Board (CEB), to provide Americans with a trusted source from which they can get up-to-date, objective, and credible information on which healthcare services are the most effective and provide the best value. The CEB would be responsible for (1) comparing the clinical and cost-effectiveness of new and existing drugs, devices, procedures, therapies, and other healthcare services; (2) assessing alternative uses of treatments currently in practice; and (3) distributing this information in a useful format

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

so that patients, clinicians, and payers can make more informed choices among healthcare options. By establishing a sustainable capacity to generate and provide information on the comparative effectiveness of healthcare services and technologies, work can then be done to strengthen the use of this information in everyday medical practice, that is, what works, what works best, and what yields the best value for patients.

It is important to point out that the results of the CEB’s evaluations not only will identify those interventions that offer very little marginal benefit at high cost but also will identify those interventions that are cost-effective but currently being underused or whose true value to the healthcare system may not yet be widely recognized. For example, there is currently little evidence to help differentiate the mortality benefit of different treatments for early prostate cancer. Some newer forms of radiation therapy for prostate cancer cost four to five times as much as other forms of treatment. At the same time, statins are considered to be highly effective and cost-effective at reducing cholesterol levels, yet they continue to be underused. Disease management represents another area in which the CEB’s evaluations could help promote the use of a technique that improves health outcomes while reducing overall healthcare costs.

The next steps in this new course of action will involve integrating the information that the CEB generates into benefit designs, medical policies, and provider and patient decision-making tools. Health insurance plans have already adopted a range of strategies designed to promote evidence-based benefit design. The development and dissemination of CEB evaluations will provide a reliable resource while allowing health insurance plans the autonomy they need to make coverage decisions and benefit designs on the basis of what best suits their members. One prominent example of the use of evidence-based recommendations is health insurance plans’ approach to the coverage of preventive services supported by authoritative review of medical evidence by AHRQ’s U.S. Preventive Services Task Force. As mentioned earlier, health insurance plans’ use of P&T committees to evaluate and review pharmaceutical cost-effectiveness data for formulary development has become standard practice as well.

Increased research on comparative effectiveness will also enable the greater use of innovative strategies to link cost sharing to value (Braithwaite and Rosen, 2007). Comparative effectiveness research will promote efficiency by identifying treatments and procedures that provide the most benefits for the cost incurred. The results of this type of research can then be used to tie different levels of cost sharing to value. For example, by establishing different levels of cost sharing for different prescription drugs on the basis of their safety, efficacy and value, health insurance plans’ use of tiered formularies has been successful in stemming the rise in spending on prescription drugs. Increased data on comparative effectiveness for other

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

services and technologies will enable an expansion of the tiering techniques beyond prescription drugs with the promise of further cost savings and value-based decision making. Tiered cost sharing also has the potential to allow consumers to make individual healthcare choices on the basis of what works best for them, as opposed to the current style of payer-based coverage systems that tend to be binary: either 1 for “it works” or 0 for “it does not work” (Denny et al., 2007; Health Industry Forum, 2007).

Some have called for the expansion of existing federal agencies, such as AHRQ or the National Institutes of Health, to assume responsibility for such functions; however, the task at hand is so critical to improving the U.S. healthcare system that others, including many in the insurer sector, believe that a new entity should be charged with this responsibility. Such an entity should be a public–private partnership and should be funded through public sources and supplemented by support from private sources through mechanisms that will provide stability and independence from political pressures. Whereas the CEB will not be a federal agency, it must use the expertise and skills of the existing federal agencies to establish methodological standards for comparative research, conduct the necessary research, and help disseminate the results.

As an interim and, in fact, complementary step, the capture of additional patient data in the course of clinical care for assessment of the appropriateness, utilization, and impact of particular healthcare services for which evidence may be lacking is another worthwhile strategy. Participants within the healthcare system must work together to identify and evaluate other data sources that could be used in the development of evidence. There currently exists an unrealized potential to use nontraditional data sources in the development of evidence. Collaborations among stakeholder groups should consider the appropriateness of data in registries, claims data, and population-based measures for use in the generation of additional evidence. For provider decision making to benefit from the development and capture of additional patient data, barriers to appropriate data sharing within the healthcare system must be minimized. Privacy and security standards must be implemented in a way that recognizes the benefits of data sharing in assessing the appropriateness of particular treatments for specific patients.

Invest in the Workforce Needed to Conduct Comparative Effectiveness Research

Plans for a CEB designed as a public–private partnership—and with it a significant increase in comparative effectiveness research—depend on adequate investment in the training of researchers so that they have the skills to perform this kind of work. The skills needed include those necessary to support the two main types of comparative effectiveness research:

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

systematic review of clinical and cost-effectiveness and the design, conduct, and analysis of pragmatic clinical trials.

  • Systematic review of clinical and cost-effectiveness. The performance of systematic reviews, decision modeling, and cost-effectiveness analyses by researchers will be needed to augment the production of important comparative effectiveness reports. Specifically, researchers with skills in clinical epidemiology, decision analysis, meta-analytic statistics, and health economics will be required. Currently, few postgraduate training centers provide top-level training in these domains within collaborative or multidisciplinary training programs. In particular, training in clinical epidemiology, often offered to physicians in postgraduate research training programs, rarely includes or is linked to programs of training in health economics and decision analysis. Funding to support the establishment and greater integration of these training programs is needed.

  • Design, conduct, and analysis of pragmatic clinical trials. Greater investment is needed to help train clinical researchers to understand and adopt the findings of pragmatic or practical clinical trials. Study design along traditional lines is often taught to clinical researchers, but greater cross-fertilization from healthcare services research and from disciplines that employ quasiexperimental and qualitative research designs is needed because comparative effectiveness trials often cannot be randomized controlled trials because of practical and ethical constraints.

Reinforce FDA’s Capacity to Assess the Long-Term Safety and Effectiveness of New Drugs

As the principal federal agency with jurisdiction for the approval of new drugs, devices, and biologics, FDA has a significant role to play in assessing safety and effectiveness. Approaches for improving FDA’s review of new drugs were recently recommended by the IOM Committee on the Assessment of the U.S. Drug Safety System in its September 2006 report The Future of Drug Safety: Action Steps for Congress (Institute of Medicine, 2006). Below are several suggestions that are consistent with many of the IOM’s recommendations and also some new ideas for reforming FDA to meet twenty-first century demands.

The law governing the approval of new drugs (Prescription Drug User Fee Act) places a priority on increasing the speed of the drug approval process. Yet data on long-term drug safety are typically lacking (Wood, 2006). To better balance the need to get new drugs to market quickly with

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

the need for information on long-term drug safety, congressional action specific to postmarketing safety goals is needed. For example, to further achieve the balance between speedy approvals and postmarketing safety, a portion of the funds collected from drug user fees should be dedicated to safety and effectiveness evaluations once a new drug has been approved for use.

Additionally, FDA’s enforcement abilities should be expanded to better enable the agency to require drug manufacturers to make labeling revisions and to perform additional clinical trials to ensure postmarketing safety. Health insurance plans and employers can play an important role in integrating the results of these postmarketing studies by regularly updating their formularies and reimbursement policies to integrate the new data that may emerge as a result of those studies.

As part of the reauthorization of the Federal Food, Drug, and Cosmetic Act, key congressional members have introduced the Food and Drug Administration Revitalization Act and the Safer Drug Assessment Technology Advancement Act to improve the underlying science of drug safety decision making and to strengthen FDA’s ability to inform patients and providers about drug safety and effectiveness.

Strengthen FDA’s Review of Certain Devices and Capacity to Track Device Safety

The less-stringent 510(k) approval process of FDA for certain new devices requires manufacturers to show only that a new device is similar to an existing, approved device and does not raise any new concerns about safety or effectiveness. Narrowing the range of medical devices that can be deemed similar and allowing only devices that have truly insignificant changes to previously approved devices to use the 510(k) process will help reduce some of the unanticipated failures or complications seen with these devices. All other devices should be evaluated through the same rigorous process used for the approval of new drugs.

FDA has not had the ability to track failed or unsafe devices once they are in the marketplace. This was evident during the recent recall of failed implantable cardiac defibrillators, when an alert notifying physicians that certain implantable cardiac defibrillators were found to fail to trigger when they were needed by patients was released. To address this void, a unique device identification system that would mark each device with its own unique identifier should be implemented. Such a system would greatly improve FDA’s ability to track the safety and performance of medical devices and would make tracking far easier for devices that have been recalled.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Focus and Coordinate Research Efforts to Address Identified Gaps in Evidence and Factors That Drive Physician Decision Making

Given that gaps in evidence can lead to variations in medical practice and put patients at risk, identifying key areas that need further research will serve to address this known evidence gap and aid clinicians in their decision making. No one entity is currently accountable for the development of a long-term strategy that can be used to address this deficiency. Because the U.S. Department of Health and Human Services (HHS) is the fiscal manager of federal dollars for research, HHS’s fiscal responsibility should be coupled with the task of developing a strategy to prioritize the research agenda needed to address known gaps in evidence and safety. In this new role, HHS, in collaboration with the CEB recommended above, can help ensure that research is conducted in areas that currently lack sufficient research findings yet have the potential to significantly improve patient outcomes. One important benefit of this enhanced emphasis on the evidence gap will be to draw attention to the fact that a significant portion of modern medicine is not supported by medical evidence and that more work needs to be done to align current medical practices with medical evidence.

In addition to identifying and promoting research in these priority areas, HHS’s role should include enhanced communication with the public about those studies under way to address these priority areas. Such public information and education will advise both consumers and providers of the lack of reliable evidence on these conditions or treatment protocols and provide them with the ability to track this information throughout the study period. Similar to the information that the National Cancer Institute releases on its website highlighting the current cancer clinical trials that are under way and providing information on patient eligibility, trial protocols, and the current status of the trial, HHS could, for example, coordinate the release of public information on any postmarketing approval studies—studies conducted after FDA approval of drugs, devices, and biologics—currently under way, the goals for such studies, and their expected completion dates.

Better Dissemination of Actionable Information at the Point of Care and Transparency of Performance and Information Used to Make Decisions

In the majority of U.S. economic markets, entities compete on the basis of price and quality and consumers make their decisions on the basis of reliable, accurate information. For a variety of reasons, this has never been the case in the healthcare market. Instead, many consumers, having little other information to go on, tend to equate higher costs with higher quality—although this is often not the case. In recognition of this problem, the IOM in its 2001 report Crossing the Quality Chasm stressed that transparency

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

should be a key element of any strategy to improve clinical quality and achieve better value in the healthcare system (Institute of Medicine, 2001). A healthcare marketplace that empowers consumers to make informed choices on the basis of both cost and quality will result in a healthcare system that offers improved value to consumers and encourages innovation and continued evolution.

The private sector has led the way in developing a uniform approach to the disclosure of relevant, useful, understandable, and actionable information to facilitate consumer decision making. The key stakeholders among the different disciplines, including health insurance plans, physicians, hospitals, consumers, and employers, have convened broad-based, national alliances (AQA Alliance and HQA) to determine a more effective strategy for measuring, reporting, and improving physician and hospital performance. The leadership of AQA and HQA has recently formed a new national entity, the Quality Alliance Steering Committee (QASC), whose purpose is to better coordinate the promotion of quality measurement, transparency, and improvement in care across all care settings. CMS has been an active member of both alliances and is working to use the recommendations from AQA and HQA and the measures endorsed by the National Quality Forum as part of the PQRI, the hospital public reporting project (Hospital Compare), and hospital demonstration projects on value-based purchasing. The private sector has also begun building the capacity to analyze certain agreed-upon episodes of care (e.g., pregnancy), in addition to specific services (e.g., labor and delivery), to allow consumers to make more comprehensive and informed assessments of the health care that they receive.

In an effort to eliminate duplicative efforts to measure and report on performance, AQA has launched a pilot project at six sites across the country that would combine public- and private-sector data to measure and report on physician-level practice. These sites, which will eventually include an aggregation of data from commercial sources and the Medicare program, are now called “value exchanges.” In an effort to encourage the development and growth of public–private collaborations under this project, HHS has established two levels of recognition for participants in these initiatives. Partnerships in the early stages of development are designated “community leaders,” and more advanced collaborations are designated as “value exchanges” and will be invited to participate in a nationwide learning network, sponsored by AHRQ, that will provide access to expert faculty, lessons about successful quality improvement, and reporting to consumers.

This comprehensive approach being undertaken to promote better assessments of performance will make it far easier to identify opportunities for quality improvement, result in valid and consistent measures of quality and efficiency that can be used to improve care throughout the healthcare

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

system, and provide important information to patients in making healthcare decisions. Only by improving performance assessment and making the results of those assessments available to consumers in both the private and public sectors can systemwide improvement be achieved.

Another important research need that deserves specific attention relates to the accurate display of cost information for consumers. More focus has been placed on asking consumers to make informed healthcare choices, either in choosing an efficient provider or in comparing their treatment options; the medical community has little understanding of how best to share information on cost by either specific procedure or episode of care. This is especially difficult in an industry in which the consumer has been isolated from the true costs of health care. With the rise in popularity of consumer-directed health plans and the desire of the consumer to receive the highest-quality health care for the lowest price, the importance of this type of research should not be discounted (Buntin et al., 2006).

Achieve Data Consistency to Allow Easy Sharing of Information Among Various Stakeholders

In addition to emphasizing the need for information to aid consumers with making decisions about their health care, the IOM’s 2001 report Crossing the Quality Chasm also identified the need for better information to aid physicians, hospitals, and other healthcare professionals with the identification of gaps in quality and to assist them in comparing their performance with that of similar practicing providers. The lack of consistency in the available information makes comparisons of providers and health care difficult while the public is becoming increasingly aware of gaps in care and safety for themselves and their family members (American Health Information Community, 2007). Many different private- and public-sector groups have attempted to step up to the challenge by designing models for assessing performance and aggregating and reporting data. Although some progress has been made, the proliferation of multiple, uncoordinated, and sometimes conflicting initiatives has had significant unintended consequences for different stakeholders. Duplicative efforts unnecessarily burden physicians, other clinicians, and health insurance plans with different data requests, shifting the focus away from quality and efficiency improvement. When divergent information is collected and publicly reported, it creates confusion among consumers, detracts from efforts by employers to design programs that meet the needs of their employees, and diverts limited resources and focus away from achieving systematic improvements in health.

Through AHIP, the health insurance plan sector is working to implement a national strategy to aggregate data from multiple health insurance

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

plans and other sources to produce and report on an increasingly sophisticated set of quality and cost measures throughout the country. This national strategy will build on the foundation provided by existing quality measurement efforts, such as the AQA alliance and HQA efforts mentioned above, as well as the efforts of individual health insurance plans. The data aggregation method may also be applied to address other issues related to monitoring and improving medical practice, such as tracking drug utilization and safety and developing better evidence on medical treatments.

Promote Optimal Care by Emphasizing Evidence-Based Coverage and Reimbursement Strategies

As mentioned above, health insurance plans have adopted a range of strategies designed to encourage evidence-based decision making. In addition to creating medical policies that reflect scientific findings on effectiveness and value, health insurance plans routinely provide information to patients encouraging them to receive preventive benefits supported by medical evidence. Health insurance plans have also capitalized on their ability to advance nationally recognized preventive services through their disease management and wellness programs. Additionally, health insurance plans provide feedback to individual practitioners about their performance and alerts about potential drug interactions. They also offer incentives to practitioners to practice medicine in a manner that is consistent with the medical evidence and that yields high-quality health care. The use of such pay-for-performance strategies represents a mechanism that aligns incentives in a way that encourages ongoing improvement in the quality of care that is provided and should continue to be pursued.

Although the reimbursement practices of public programs preclude a direct corollary with those of private programs from being made, coverage and reimbursement policies in public programs offer immediate opportunities for policy reform. For example, because of its tremendous influence on the adoption of healthcare technologies and treatments, the U.S. Congress should give CMS the explicit authority to use the available data on comparative effectiveness and cost-effectiveness in determining its coverage policies. Similarly, empowering CMS to set reimbursement rates for new technologies more in alignment with the added (or marginal) value of a new technology over established alternatives will help constrain unsustainable trends in increased cost and improve overall quality. Parallel efforts by other federal agencies that have a role in establishing coverage policy, such as VA and the Office of Personnel Management, as well as by state agencies responsible for administering state Medicaid programs, should also be considered.

In addition to modernization of state Medicaid coverage and reimbursement policies, state enactment of coverage mandates must be addressed. A

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

number of states have enacted laws requiring the systematic review of benefit mandates and the extent to which such mandates are consistent with the medical evidence. By nature, a mandate is static and unable to reflect changes in the practice of medicine that may make the mandate obsolete or even harmful to patients. Yet mandates do exist and may persist in the future. The continued establishment and use of independent state advisory bodies, such as external review organizations and state cost-containment boards, to evaluate the consistency of state mandates with the latest medical evidence are essential and will provide valuable information to policy makers, clinicians, and consumers.

Invest in Infrastructure Development, Deployment, and Use

The transparent collection, analysis, and dissemination of information on the latest medical evidence, performance, and comparative effectiveness at the point of care will require further investment in several key areas of the healthcare infrastructure. First, significant investment will be needed to build the early systems that can aggregate administrative data and electronic health record information in a reliable fashion. Second, for this information to reach clinicians and patients, new research and investment in methods of information synthesis and dissemination will be needed. An important impetus to restructuring the U.S. healthcare system is the presence of the American Health Information Community (U.S. Department of Health and Human Services, 2007); the work of QASC, HQA, and the AQA Alliance in seeking to reach common standards for data stewardship and aggregation; and the work of multiple vendors, clinicians, and other stakeholders.

Additional resources must also be directed toward efforts to translate the results of clinical research into best practices. Providers will need to look for ways to redesign their business practices so that they allow the easy adoption of new evidence. An interoperable healthcare system will ensure that appropriate, reliable information is available to guide medical decisions at the time and place of care, help reduce preventable medical errors, improve quality, and advance the delivery of evidence-based medical care. In doing so, it will create a more effective marketplace, create greater competition, reduce overall healthcare costs, and create a value-based healthcare system.

NEXT STEPS

Opportunities for Collaboration

The insurer sector is well positioned to play an integral role in a national effort to improve the generation, dissemination, and implementation of

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

medical evidence. The current state of the quality and the affordability of health care in the United States demand nothing less than a concerted and collaborative commitment to improving the value of health care.

All of the progress that has been made to date has been achieved through partnerships and collaborations across the healthcare system. The AQA Alliance and HQA initiative to determine a more effective strategy for measuring, reporting, and improving physician and hospital performance is an excellent example of the type of broad-based coalition necessary to drive change and improvement.

Just as AHIP and BCBSA represent the health insurance plan sector, different groups also represent providers, consumers, employers, and other stakeholders. Countless organizations representing different stakeholders have been involved in collaborative and cooperative efforts with the health insurance plan sector on a variety of healthcare issues.

Collaboration among providers, insurance plans, consumers, purchasers, and manufacturers must increase to take advantage of these opportunities. Several specific areas in which continued progress would greatly benefit from enhanced collaboration between health insurance plans and other stakeholders are as follows:

  • Efforts to develop benefit language compatible with medical evidence-based innovative benefit designs (e.g., tiered benefits for procedures, devices, and diagnostics and incentives for consumers to take up therapies supported by evidence) will require collaborations among health insurance plans, purchasers, and state regulators.

  • The creation and the design of the proposed CEB will require collaboration among all stakeholders in the healthcare system to help identify for evaluation priority areas that will have the greatest potential to improve the quality of health care.

  • Public awareness and education efforts to communicate the underlying goal of evidence-based medicine and comparative effectiveness as being one of care improvement and not access reduction will require collaboration among health insurance plans, consumer groups, purchasers, manufacturers, and providers.

  • The continued evolution of performance-based payment models that recognize and reward hospitals, physicians, and other clinicians for adopting evidence that results in improved outcomes and appropriate resource use will benefit from collaboration among health insurance plans, purchasers, providers, and consumers.

  • Efforts to develop a more transparent and consistent approach to judging evidence in the context of medical policy decision making will require the broad-based involvement of health insurance

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

plans, manufacturers, experts in evidence-based medicine, patients, employers, and government. The development of a consensus around what constitutes “value,” focusing particularly on the non-cost components of value, will require collaboration among these stakeholders.

  • The development of a new format for technology appraisals that allows the integration of ratings of clinical and cost-effectiveness that can support value-based insurance benefits and guide decision making by patients and clinicians toward higher value could benefit from collaboration among health insurance plans and other stakeholders and the Institute for Clinical and Economic Review.

  • The exploration of further application of CED initiatives in circumstances in which further evidence generation is needed to assess important remaining questions about the safety and comparative effectiveness of new technologies could be achieved through collaboration among CMS, health insurance plans, and other private-sector entities, such as the Center for Medical Technology Policy.

  • The current paradigm for building evidence and value may have limited application in the future as personalized medicine becomes more in demand. Evidence on demographics, genomics, patient preferences, and other factors will need to be considered. This will require collaboration among providers, payers, and manufacturers to make sure that the necessary information on treatment options is available to allow improved quality at both the individual and the aggregate levels.

  • Reform of the medical liability system, so that the resolution of disputes is based on scientific evidence, will require the collaboration of groups representing virtually all of the healthcare system’s stakeholders.

The heightened level of attention being paid to issues of healthcare cost, quality, and access signifies an opportunity for stakeholders within the healthcare system to come together and develop the necessary road map for the transformation to a more evidence-based system. The IOM Roundtable has provided a much needed forum for the discussion and development of this road map, and the insurer sector looks forward to continued active participation in this overall effort to drive progress.

REFERENCES

AIS Health. 2007. AIS directory of health plans. http://www.aishealth.com/Products/dhp.html (accessed December 9, 2007).

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

American Health Information Community. 2007. Quality workgroup. Quality workgroup full vision summary. January 31, 2007. http://www.hhs.gov/healthit/ahic/materials/qual_vision_summary.pdf (accessed March 15, 2007).

America’s Health Insurance Plans. 2004. America’s Health Insurance Plans website. http://www.ahip.org (accessed May 12, 2008).

Atkinson, W. 2007. The impact of CED on private payers. Biotechnology Healthcare 24:24-30.

BlueCross and BlueShield Corporation. 2007. BlueCross and BlueShield Corporation website. http://www.bcbs.com (accessed May 12, 2008).

Braithwaite, R. S., and A. B. Rosen. 2007. Linking cost sharing to value: An unrivaled yet unrealized public health opportunity. Annals of Internal Medicine 146(8):602-605.

Buntin, M. B., C. Damberg, A. Haviland, K. Kapur, N. Lurie, R. McDevitt, and M. S. Marquis. 2006. Consumer-directed health care: Early evidence about effects on cost and quality. Health Affairs 25(6):w516-w530.

Clancy, C. M. 2006. Arming health care consumers: Testimony before the Joint Economic Committee, May 10, 2006. Washington, DC.

Claxton, G., I. Gil, B. Finder, B. DiJulio, S. Hawkins, J. Pickreign, H. Whitmore, and J. Gabel. 2006. The Kaiser Family Foundation health research and educational trust (HRET) employer health benefits: 2006 annual survey. http://www.kff.org/insurance/7527/upload/7527.pdf (accessed June 1, 2007).

Claxton, G., J. Gabel, B. DiJulio, J. Pickreign, H. Whitmore, B. Finder, P. Jacobs, and S. Hawkins. 2007. Health benefits in 2007: Premium increases fall to an eight-year low, while offer rates and enrollment remain stable. Health Affairs 26(5):1407-1416.

CMS (Centers for Medicare and Medicaid Services). 2005. 2005 CMS national health expenditures data; web tables. Baltimore, MD. http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf (accessed May 21, 2007).

———. 2007a. CMS Management Information Integrated Repository (MIIR). Baltimore, MD.

———. 2007b. Physician quality reporting initiative: Overview. Baltimore, MD. http://www.cms.hhs.gov/pqri/01_overview.asp (accessed May 28, 2007).

———. 2007c. Quality improvement organizations: 8th round statement of work contract. Baltimore, MD. http://www.cms.hhs.gov/QualityImprovementOrgs/downloads/8thSOW.pdf (accessed June 27, 2007).

———. 2007d. Quality improvement organizations: Overview. Baltimore, MD. http://www.cms.hhs.gov/QualityImprovementOrgs/ (accessed May 15, 2007).

CMS Hospital Pay-for-Performance Workgroup, RAND Corporation, Brandeis University, Booz Allen Hamilton, and Boston University. 2007. U.S. Department of Health and Human Services Medicare hospital value-based purchasing plan: Development issues paper. Washington, DC.

Community Care of North Carolina. 2003. Progress report: Asthma initiative. http://www.communitycarenc.com/PDFDocs/AsthmaProgressReport.pdf (accessed May 15, 2007).

Congressional Budget Office. 2007. The state’s children health insurance program. Washington, DC. http://www.cbo.gov/ftpdoc.cfm?index=8092&type=1 (accessed May 30, 2007).

Denny, C. C., E. J. Emanuel, and S. D. Pearson. 2007. Why well-insured patients should demand value-based insurance benefits. JAMA 297(22):2515-2518.

Galvin, R. S., S. Delbanco, A. Milstein, and G. Belden. 2005. Has the Leapfrog Group had an impact on the health care market? Health Affairs 24(1):228-233.

Gibson, M., and J. Santa. 2006. The drug effectiveness review project: An important step forward. Health Affairs 25(4):W272-W275.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

Health Industry Forum. 2007. Comparative effectiveness forum: Executive summary. Waltham, MA: Brandeis University-Heller School for Social Policy and Management.

Hoadley, J., J. Crowley, D. Bergman, and N. Kaye. 2007. Understanding key features of the Drug Effectiveness Review Project (DERP) and lessons for state policy makers. Washington, DC: National Academy of State Health Policy.

Institute of Medicine. 2001. Crossing the quality chasm: A new health system for the 21st century. Washington, DC: National Academy Press.

———. 2006. The future of drug safety: Action steps for congress. Washington, DC: The National Academies Press.

Kaiser Family Foundation. 2007. Medicaid enrollment in 50 states: A June 2005 data update. Washington, DC. http://www.kff.org/medicaid/upload/7606.pdf (accessed May 21, 2007).

Lindenauer, P. K., D. Remus, S. Roman, M. B. Rothberg, E. M. Benjamin, A. Ma, and D. W. Bratzler. 2007. Public reporting and pay for performance in hospital quality improvement. New England Journal of Medicine 356(5):486-496.

Llanos, K., J. Rothstein, M. Dyer, and M. Bailit. 2007. Physician pay-for-performance in Medicaid: A guide for states. Hamilton, NJ: Center for Health Care Strategies. http://www.chcs.org/publications3960/publications_show.htm?doc_id=471272 (accessed May 21, 2007).

Neumann, P. J. 2006. Emerging lessons from the drug effectiveness review project. Health Affairs 25(4):W262-W271.

Oregon Health and Science University. 2007. Medicaid evidence-based decisions project (MED). Portland, OR. http://www.ohsu.edu/ohsuedu/academic/som/phpm/med/index.cfm (accessed May 12, 2008).

Pham, H. H., P. B. Ginsburg, K. McKenzie, and A. Milstein. 2007. Redesigning care delivery2007. Redesigning care delivery in response to a high-performance network: The Virginia Mason Medical Center. Health Affairs 26(4):w532-w544.

Ricketts, T., S. Greene, P. Silberman, H. Howard, and S. Poley. 2007. Evaluation of Community Care of North Carolina asthma and diabetes management initiatives: January 2000-December 2002. Chapel Hill, NC: The Cecil G. Sheps Center for Health Services Research, University of North Carolina at Chapel Hill.

Rosenthal, M. B., R. G. Frank, Z. Li, and A. M. Epstein. 2005. Early experience with pay-for-2005. Early experience with pay-for-performance: From concept to practice. JAMA 294(14):1788-1793.

Rosenthal, M. B., B. E. Landon, S. L. Normand, R. G. Frank, and A. M. Epstein. 2006. Pay for performance in commercial HMOs. New England Journal of Medicine 355(18):1895-1902.

Rowe, J. W. 2006. Pay-for-performance and accountability: Related themes in improving health care. Annals of Internal Medicine 145(9):695-699.

U.S. Department of Health and Human Services. 2007. The American Health Information Community. Washington, DC. http://www.hhs.gov/healthit/community/background/ (accessed May 14, 2007).

U.S. Department of Veteran’s Affairs Office of Public Affairs Media Relations. 2007. Facts about the Department of Veterans Affairs. Washington, DC. http://www1.va.gov/OPA/fact/docs/vafacts.pdf (accessed May 21, 2007).

U.S. Government Accountability Office. 2007. Military health care: TRICARE cost-sharing proposals would help offset increasing health care spending, but projected savings are likely overestimated. Report to Congressional Committees. Washington, DC.

Villagra, V. G., and T. Ahmed. 2004. Effectiveness of a disease management program for patients with diabetes. Health Affairs 23(4):255-266.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

Wennberg, J. 2007. The care of patients with severe chronic illness: A report on the Medicare program by the Dartmouth Atlas Project. Executive summary. Hanover, NH: Center for the Evaluative Clinical Sciences, Dartmouth Atlas Project.

Wennberg, J., and M. Cooper. 2007. The Dartmouth atlas of health care 1999. The quality of medical care in the United States: A report on the Medicare program. Chicago, IL: Dartmouth Medical School.

Wheeler, J. R., N. K. Janz, and J. A. Dodge. 2003. Can a disease self-management program reduce health care costs? The case of older women with heart disease. Medical Care 41(6):706-715.

Wood, A. J. 2006. A proposal for radical changes in the drug-approval process. New England Journal of Medicine 355(6):618-623.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×

This page intentionally left blank.

Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 269
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 270
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 271
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 272
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 273
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 274
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 275
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 276
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 277
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 278
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 279
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 280
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 281
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 282
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 283
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 284
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 285
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 286
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 287
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 288
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 289
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 290
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 291
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 292
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 293
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 294
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 295
Suggested Citation:"11 Insurers." Institute of Medicine. 2009. Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary. Washington, DC: The National Academies Press. doi: 10.17226/11982.
×
Page 296
Next: 12 Employers and Employees »
Leadership Commitments to Improve Value in Health Care: Finding Common Ground: Workshop Summary Get This Book
×
Buy Paperback | $99.00 Buy Ebook | $79.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

This volume reports on discussions among multiple stakeholders about ways they might help transform health care in the United States. The U.S. healthcare system consists of a complex network of decentralized and loosely associated organizations, services, relationships, and participants. Each of the healthcare system's component sectors--patients, healthcare professionals, healthcare delivery organizations, healthcare product developers, clinical investigators and evaluators, regulators, insurers, employers and employees, and individuals involved in information technology--conducts activities that support a common goal: to improve patient health and wellbeing. Implicit in this goal is the commitment of each stakeholder group to contribute to the evidence base for health care, that is, to assist with the development and application of information about the efficacy, safety, effectiveness, value, and appropriateness of the health care delivered.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!