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Spotlight on Innovation: Engaged Benefit Design

Financial incentives and consumer empowerment is at the heart of a health care transformation pilot project taking place in Colorado’s San Luis Valley. The project, Engaged Benefit Design, aims at combining the clinical knowledge of providers with the goals and desires of fully informed patients. The premise is simple. When patients and providers are incentivized to make decisions based on medical evidence and patient values, outcomes will improve and cost savings may be realized.

“Making treatment decisions can be overwhelming if not impossible for most consumers,” said Dave Downs, M.D., Medical Director at Engaged Public, the organization leading the project. “The magnitude and complexity of treatment options available for any given diagnosis is often daunting, and it’s hard to find trusted sources of information to weigh all pros and cons.” As a result of the complexities, patients tend to rely on their health care provider to tell them what treatment option is best without fully understanding all risks, benefits and alternatives.

Engaged Benefit Design helps overcome decision making barriers by giving patients and providers resources to support making joint decisions together. Financial incentives are built in to the patient’s current health insurance benefits to encourage selecting treatments that are likely to benefit them based on medical evidence. Co-pays for high-value services are waived, and patients pay extra for services that deserve their full consideration before deciding to use them.

“Treatments with strong scientific evidence to support their use, such as prenatal care and insulin to treat diabetes, are called ‘No Co-Pay, High Value,’ and are available at no additional cost to the patient,” explains Downs. “Other treatments that may be right for some patients but not for others are called ‘Costs More, Learn More’." A patient and a provider may choose higher cost, potentially less effective treatments, but the patient would have to pay more. As an added incentive to investigate options available, some patients are eligible for a gift card or other rewards just for doing the research.

Program designers believe that Engaged Benefit Design will reduce overall healthcare spending, but it’s too early in the pilot to demonstrate any cost savings. “If the number of over- and misused treatments is reduced, cost savings will be realized,” said Downs. “However, since there isn’t a charge to the patient, for highly effective treatments in ‘No Co-pay, High Value’ category, use of those services may increase and result in higher costs. Ultimately we’d like to produce more health per dollar spent, resulting in more value for every health care dollar.”

Engaged Benefit Design is a collaborative effort of several organizations and funders. Engaged Public has led and developed the implementation of the program with support and contributions from Yondorf Associates, the Informed Medical Decisions Foundation, and numerous others. Implementation of the San Luis Valley pilot began a year ago with the employees and dependents of the San Luis Valley Regional Medical Center in Alamosa, Colorado. San Luis Valley HMO administers the health plan, and the Colorado Health Institute is evaluating the program.

Funding for Engaged Benefit Design has been received by the Dr. A. J. Kauvar Foundation, the Health Resources and Services Administration, the U.S. Department of Health and Human Services, Colorado Department of Health Care Policy and Financing and the Robert Wood Johnson Foundation.

For more information on the program, visit engagedbenefitdesign.org.

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