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The Inside Story: Perks or stuff that works?

September 13, 2018

Design your health plan using value-based care

The winds of change have been blowing for some time now, gaining momentum due to trends like high-cost drugs, the rising incidence of chronic conditions, and an aging population. In fact, the need for change may be reaching full-blown storm level in terms of challenging plan sustainability and the ability to positively impact plan member health. Fortunately, plan sponsors can be better protected by shifting their mindset toward spending based on what is needed in the future rather than what has happened in the past. This shift means evolving with the scientific evidence to make tough decisions regarding plan design and what’s in versus what’s out.

So what’s it going to be, perks or stuff that actually works? We’ll help you decide…

Would you give up massage if it would help pay for a colleague’s cancer drugs or mental health support?

That’s what we mean by tough decisions. And that’s precisely the concept behind value-based health care; it means trade-offs. Trade-offs are necessary because the cost curve has changed forever, and there’s probably no going back to the land of plenty. However, we can move forward and effectively face today’s—and tomorrow’s—challenges. How? By applying value-based decision making, which relies on the best available evidence from the scientific literature. And when scientific evidence doesn’t exist yet, it draws on subject matter experts for guidance.

To gain some context, let’s time-travel back for a quick moment to 2014 and GSC’s annual Drug Study that, for the first time ever, also included analysis of all health benefits. We probably need not remind you of some study results that hinted at (putting it mildly) questionable value for plan sponsor spend. Remember all those teenagers getting tens of thousands of dollarsworth of massages? Meanwhile, serious issues regarding plan member health were painfully evident, especially the rising incidence of chronic conditions.

Similar themes are echoed in each subsequent annual Health Study. So we’ve said it before, and we’re saying it again, we need to explore new plan designs that focus on value for each health-benefits dollar spent. Here’s how…

There’s smart spending… and then there’s not-so-smart spending

As discussed in the June 2017 edition of The Inside Story, “Value means that it’s not enough that a health care product, service, organization, or provider just deliver something—it’s about the quality and outcome of that something.”

Accordingly, to ensure smart spending—that you are getting value for your health benefit dollars—depends on what outcomes you’re aiming for… simply put, it all depends on the goal of your health benefits plan: “If the purpose is engagement and maintaining a competitive position, then [a plan sponsor] can offer all kinds of services but they must realize that there is a finite bucket for salaries and pension plans and health benefits plans. Another plan sponsor may feel that their plan’s purpose is to help keep plan members healthy, so some services that don’t address chronic conditions may have to go.” (February 2016 edition of The Inside Story).

So let’s do an exercise—come on, humour us! Making tough decisions means answering a lot of tough questions, so here goes…

Question 1: What is the purpose of your health plan?

  • To support employee health and productivity
  • To be an appealing aspect of the overall employment compensation package
  • To act as insurance to protect employees from financial losses
  • To be a hybrid of providing support for employee health and acting as an appealing part of overall employment compensation

Let’s assume that the purpose of your plan is largely to support plan member health and productivity. And we’ll say it like it is by taking the direct approach of the April 2015 edition of The Inside Story: “If you are one of those plan sponsors looking for concrete health outcomes for your employee population, that traditional plan is not going to cut it.” So on to the next question…


Question 2: How can you help make plan members healthier in the most cost-effective way?

To find the answer, go through your plan benefit by benefit and assess whether it represents smart spending. How do you know? Look to the evidence to determine which benefits are supporting your plan goals. Here’s how our very own Erin Crump, leader, strategic innovation, explains it: “Part of the reason that GSC continues to stress value-based spending is in response to plan sponsors adding drug caps as a way to help contain costs. However, by taking this approach, plan members could end up not being able to access life-saving drugs, at the expense of everyone being able to get a massage. Essentially, if a plan sponsor is focused on health outcomes, then they should think critically about paying for certain benefits like massage where the scientific evidence indicates that it has no greater benefit than taking a yoga class. So my advice to plan sponsors is that instead of assuming that the plan is unsustainable and automatically adding a drug cap, examine all areas of your plan. Take the same rigorous approach that is applied to assessing drugs— examine the evidence. GSC can help with this.”

So, you’ve confirmed the purpose of your plan and you’ve assessed each benefit based on the best available evidence as to whether it adds value or not and now (drumroll please), the main question at hand…

Question 3: If you started from scratch, with all the best available information at your fingertips, how would you piece together the ideal benefits plan?

Spoiler alert: We’re about to answer for you because we didn’t just ask you to do the exercise, we did it ourselves!

Just like solving a puzzle, we put together the ideal benefits plan one piece at a time, but we assessed each piece based on the best available evidence. So what does this mean? Time for a new kind of plan design—a design that ensures that every piece of the plan supports health outcomes and the intent to spend benefits plan dollars in the most impactful way possible.

In our not-so-humble opinion, this is smart spending and hence why we’re launching this “new kind of plan” under GSC’s SMARTspend banner. Keep your eyes out for more information coming soon! In the meantime, here’s a sneak peek of just a few examples of what’s included…

The drug plan is based on the Conditional Drug Formulary® where GSC evaluates all new drugs introduced by Health Canada based on overall value, unmet need, clinical efficacy, safety, and plan affordability. This approach delivers value because it protects your drug plan from expensive drugs that have not been proven to treat medical conditions more effectively than similar, less expensive drugs. Of course, the drug plan is supported by a range of strategies, for example, the Biosimilars Policy, the specialty-drug preferred pharmacy network, and supply limits for both initial and ongoing prescriptions.

In keeping with the value strategy, certain restrictions to ensure smart spending apply to the dental and vision benefits (and as a shout-out from our technical eggheads, the restrictions include, but are not limited to, our existing administrative guidelines). And we are moving towards including only evidence-based paramedical benefits. (Brace yourself: no defined massage benefit, but we’re offering a health care spending account [HCSA] as an option for folks to make their own decision on such services.) Plus, we’ve also included our health coaching programs and access to Change4Life® with everything it has to offer, such as the digital mindfulness program. Speaking of mental health, the value hits just keep on coming with our new virtual mental health product called BEACON—also included in the new plan design. As you may recall from the July 2018 edition of The advantage®, BEACON is cognitive behavioural therapy delivered digitally via a computer or mobile device (i-CBT) in keeping with the evidence that shows that i-CBT is just as effective as in-person CBT and far more cost effective.

So if you started from scratch, with all the best available information at your fingertips, what would your plan look like? Needless to say (but of course, we’ll say it anyway), we recommend thinking about this “new kind of plan.”

Today’s new normal needs a new thinking

Whether Einstein actually said it or not, there appears to be an important observation in the idea that insanity is “doing the same thing over and over again and expecting different results.” If your plan’s main goal is to positively impact health outcomes, then you need to look beyond the traditional plan design. Get value by ensuring value in every health benefit dollar you spend. Need more inspiration? Check out episode 12 of our podcast where GSC experts Ned Pojskic, leader, pharmacy and health provider relations, and Erin Crump, leader, strategic innovation, discuss how your plan design can evolve with the times by assessing its value in terms of concrete health outcomes.