Opinion: Value-based medicine requires personalized incentives
In today’s increasingly consumer-driven environment, personalization is not only expected, but a demanded part of the user experience. Online ads are served based on a user’s search history and preferences. What pops up in an individual’s Facebook newsfeed is as unique as their iTunes library. But when it comes to healthcare, personalization has been relatively non-existent. And that’s about to change.
The CDC estimates that roughly half of all adults in the U.S. suffer from at least one chronic illness, while approximately 86% of all healthcare spending is directed toward treating patients with one or more chronic conditions. These costs are not only unsustainable, but are projected to grow as the population ages.
The industry is essentially reinventing itself to tackle these skyrocketing costs. Instead of treating patients when they are sick, and paying doctors accordingly, we are moving to a value-based care model to keep patients healthy, or healthier, especially those chronically-ill patients who put the most significant burden on our system.
For this shift to be successful, patient care must be personalized, which opens up a tremendous opportunity for health plans—a group that has only just begun to understand the great potential that personalization will have in this new value-based care world. Achieve this, and health plans stand to not only gain a competitive advantage, but also play a key role in bending the healthcare cost curve, especially when managing chronically-ill populations.
The importance of personalized incentives in a value-based world
Health plans must leverage value-based benefit designs—through which plan offerings and incentives are customized and continuously adjusted according to an individual’s changing needs.
Value-based benefits can be used to ensure that both care access and incentives are aligned with a patient’s specific circumstances.
For example, as part of a value-based plan, a patient suffering from a chronic condition could have the appropriate level of supplementary benefits layered on top of current plan offerings (a diabetes patient might have additional wellness visits or access to a nutritionist added to her base-level benefits plan). These types of benefits essentially ensure that the patients most in need of care are matched with the optimal level of benefits designed specifically for their conditions.
Customization can be focused on far more than just a patient’s health status, though. It’s possible—with the right technology infrastructure—to dynamically change a member’s benefits based on behavior and level of care plan compliance. For example, if a diabetes patient uses each of the wellness visits, nutritionist consults and is adherent to the medication regimen offered under the health plan, that patient might receive a premium reduction, or additional “healthy behavior” benefits, going forward.
When incentives are in play, individuals are more likely to engage in healthy behaviors and comply with their recommended care plans. To date, this level of incentive-driven customization has occurred primarily in employer-sponsored plans. However, more targeted incentives and value-based offerings are beginning to pop up in the form of geo-specific Medicare pilot programs as well, and it’s likely only a matter of time before individual market plans follow suit.
Why? Because incentives work. One study found that employees were 33 times more likely to participate in health coaching when their employers offered targeted financial incentives.
But people aren’t necessarily motivated by the same things, and simply having incentives available does not guarantee that all members will take advantage. From discounted gym memberships to premium reductions, plans are still fairly early on in the “throw it against the wall and see if it sticks” phase of incentives program building.
When incentives are tied directly to patient behavior, though, health plans can tailor member benefits in the most effective way possible, based upon each member’s individual needs and level of compliance. This level of personalization thereby increases the likelihood of healthy behavior—the end goal for health plans focused on reducing costs without sacrificing care.