Value-Based Insurance Design Plans

New research by CVS Caremark and Brigham and Women’s Hospital and published in the journal Health Affairs, identifies for the first time the key elements of value-based insurance design (VBID) plans that have the greatest impact on improving medication adherence.

CVS Caremark Research Identifies Optimal Elements of Effective Value-Based Insurance Design (VBID) 

A number of commonly used pharmacy benefit plans have patients bear some responsibility for the cost of their prescribed medications whether through copayments, co-insurance and/or deductibles. The rationale for these types of arrangements has been based on the belief that by asking patients to pay for a portion of their medication costs they will be more aware of the true cost of their medications and more tuned into their health care needs, resulting in more responsible and appropriate health care consumption.

Many VBID plans encourage healthy behavior by using a mail service pharmacy that delivers regular 90-day supplies of medications for chronic conditions

VBID plans take a different approach. Under a VBID plan, patients often have either no copay, or a very low copay, for those chronic medications that demonstrate a proven clinical benefit, such as a blood pressure medication for a patient with hypertension. Many VBID plans are also linked to wellness and disease management programs to encourage healthy behavior and some require patients to utilize a mail service pharmacy and receive regular deliveries of 90-day supplies of their chronic medications.

While VBID plans have been praised for their cost-containment successes, this new research actually details which elements of these types of plans have the greatest positive impact on medication adherence, a behavior also linked to improved health outcomes and reduced overall health care costs.

“For the first time, this research offers high-quality, empirical data on the VBID plan features that appear most effective for stimulating greater medication adherence,” said Niteesh Choudhry, MD, PhD, associate physician, Division of Pharmacoepidemiology and Pharmacoeconomics, Brigham and Women's Hospital and associate professor, Harvard Medical School and the lead author of the study.

“The results show that several specific features can improve adherence from between two to five percentage points. This information can help influence how future copayment reduction plans are structured for optimal benefit.”

The researchers evaluated 76 VBID plans provided by CVS Caremark, analyzing data of 33 unique plan sponsors that represent more than 274,000 patients. Based on the analysis, five key VBID features were identified as having a greater impact on adherence:

  • More generous VBID plans. (Plans with zero cost-sharing for generic drugs and low monthly copayments of less than $10, or co-insurance rates of less than $15 for brand-name medications.)
  • Plans that identified and supported high-risk patients.
  • Plans that had built-in wellness programs.
  • Plans that did not have concurrent disease management programs.
  • Plans that made the benefit available only by mail order, offering 90-day prescriptions.

This study contributes to the industry’s overall understanding of medication adherence, and reinforces CVS Caremark's goal of improving adherence in the patients it supports. The company is currently evaluating and piloting a number of interventions to improve medication adherence including the use of reminder devices to combat patient forgetfulness and new labeling to address health literacy difficulties. In addition CVS Caremark is testing the effectiveness of digital interventions to engage patients and encourage adherence.

Currently, nearly three out of four Americans do not take medications as directed, which can lead to new or worsened health issues. It's estimated that additional medical costs due to medication non-adherence cost the U.S. $290 billion.

“VBID plans have been popular with employers and health plans as a way to use financial incentives and other methods to encourage medication adherence, improve health outcomes and reduce overall health care costs,”said William H. Shrank, MD, MSHS, Senior Vice President and Chief Scientific Officer of CVS Caremark, and co-author of the study.

“In order to optimize the benefits of VBID plans, these findings encourage more generous coverage for generics, greater use of 90-day prescriptions, more careful intervention targeting and expansion of wellness programs, all of which are active initiatives at CVS Caremark.”

The study was funded by a grant from the Robert Wood Johnson Foundation’s Changes in Health Care Financing and Organization (HCFO).