Value-Based Insurance at a Portland Steel Mill

Kaiser Health News staff writer Julie Appleby reports today on value-based insurance soon to be offered to workers at a Portland steel mill.

[E]mployees with certain conditions — asthma, congestive heart failure, diabetes, depression, heart disease, chronic bronchitis or emphysema — would get prescription drugs and visits with physicians free or at greatly reduced rates. High blood pressure, another common condition, would qualify for low-cost care if it was part of an overall diagnosis of heart disease.

Conversely, they’d pay much more if they have a treatment or test from a list of about 20 broad categories, including knee or hip replacement, cardiac bypass surgery, artery-opening stents, hysterectomies, high-tech-imaging exams or emergency room visits.

Appleby goes on to report that value-based design is not without controversy. In a world with heterogeneous responses to treatments there is no way that one set of financial incentives will seem fair to all policyholders, or to all clinicians. This is an unavoidable consequence to cost control via value-based design.

On the other hand, it is imaginable that some of those faced with relatively higher cost sharing due to their mix of use ultimately benefit in absolute terms from an overall reduction in health care costs. That is, relative to the counter-factual world with cost sharing incentives that are insensitive to efficacy and cost offsets, value-based design may benefit more people than just those with preferred conditions.

Share on twitter
Share on facebook
Share on linkedin
Share on reddit
Share on email

Hidden information below

Subscribe

* indicates required
Email Format