"We know compliance with testing and insulin usage directly relates to better health and management of diabetes," said Tim Heady, chief executive officer of UnitedHealth Pharmaceutical Solutions.

 

Cases like these are fueling a shift in the benefits paradigm and how employers structure their health coverage. In the case of the diabetic issue, for instance, UnitedHealthcare about a year ago moved several branded test strips and insulin products into the lowest pharmaceutical tier, reducing the average patient's share to between $5 and $15 a month.

 

Although the industry usually reserves the lowest medication tier for generics, Heady said his organization has decided to judge drugs instead by their effectiveness and total health care value.Referred to as value-based benefit design or evidence-based insurance, companies increasingly are looking first at how effective treatments are, then building benefit designs that allow members to pay less for more effective treatments or drugs that provide a better health care value, rather than using cost alone as the primary determinant of plan design.

 

For instance, in 2005, Ryder System, Inc. decided to enhance the coinsurance it pays for care received at cardiac facilities designated as quality, cost-efficient centers by the UnitedHealth Premium designation program. Ryder now pays 90 percent of those costs, up from the 80 percent coinsurance rate that is typical throughout the rest of the company's benefit plan.

 

"Cardiac is within our top five diagnosis categories on a pretty regular basis," Pam Rothstein, Ryder's director of employee benefits, said, noting that many of the company's employees are drivers of large vehicles who tend to eat on the road and have relatively sedentary lifestyles. "By improving the reimbursement rate for cardiac care, we are sending a message to our plan participants. We know people are going for care, and we wanted to encourage them to go to the care facilities that have the best outcomes."

 

Employees immediately took note. In the first year alone, the portion of care received at the UnitedHealth Premium cardiac facilities increased by 45 percent. As a result, total facility costs for Ryder's cardiac care dropped nearly 3 percent, with an average savings of $5,671 for each member using a UnitedHealth Premium hospital for cardiac treatment.

 

"We're planning to increase communication about the program so we can eventually try to have all of our employees who have access to these centers use them," Rothstein said. "The more that happens, the better treatment employees get, which means better health outcomes and a better quality of life. It's a win-win for employees and our organization."

 

Miles Snowden, M.D., senior vice president of health care strategies for Uniprise, a UnitedHealth Group company serving large employers, said he ultimately envisions the value-based benefits philosophy resulting in a system where benefit plans are customized to each individual based on the effectiveness of various treatments for his or her personal situation. For instance, a 50-year-old male with diabetes may have to pay less to regularly access the hemoglobin A1c tests that are proven to aid with the disease than he would for getting a more routine or elective treatment.

 

Such benefit structures are so individualized and complex that the company is still determining how best to efficiently deploy the strategy for all consumers, Dr. Snowden said. But in the meantime, some companies have chosen to move forward with the data that exists today about the quality and efficiency of different physicians and facilities where treatments are provided.

 

"Gaining experience in partnership with thought-leading companies such as Ryder is an important early step in our deployment of value-based benefit design in medical services," Dr. Snowden said.

 

In a separate but similar approach, other companies have decided to actually pay employees for complying with treatments that have been proven effective for certain chronic conditions. For instance, through a program called Rewards for Action, employees are given information about scientifically proven treatments for their illnesses such as asthma or coronary artery disease, then receive benefit credits for learning about and following those treatments. One employer using the program pays employees up to $500 in credits per year.

 

"Consumers who are adherent to these best practice guidelines tend to have better outcomes and fewer complications, and they tend to be more active and more free of symptoms," Dr. Snowden said. "As a result, we expect for these individuals to achieve a better clinical status, and for employers to have to pay significantly lower medical costs for these employees in the long run."

 

Heady said similar benefits to consumers and their employers result from the value-based pharmacy philosophy - especially for individuals with chronic diseases. For instance, in addition to the diabetes drug changes, UnitedHealth Pharmaceutical Solutions recently moved a name-brand asthma inhaler to the first tier.

 

The company had found that certain generic asthma inhalers were becoming scarce - and therefore more expensive - because they are being phased out due to their negative impact on the environment. By moving one of the newly designed brand inhalers, which doesn't have the same environmental issues, from the third tier to the first, the company has been able to keep the treatment within reach of some patients who otherwise couldn't afford it.

 

Heady said by considering published evidence and the company's own analysis of pharmacy and medical claims data, decisions can be made based on the overall value of a medication - not whether it's a brand or generic. "If we can make these medications affordable and accessible, we know we can help increase compliance and decrease the kinds of medical issues that patients face when they allow their medical conditions to go untreated," he said.