By Diane Carman

As policymakers across the country grapple with the challenge of creating a better, less expensive health care system, one element often is overlooked: the role of the patient.

An experiment in Colorado’s San Luis Valley is testing the theory that better-informed patients who can weigh the pros and cons of medical procedures and their costs could help reduce demand for some expensive procedures.

A new article in Health Affairs, co-authored by Denver health policy experts, explores how new state health exchanges could improve value in health care by cutting co-payments for health interventions that work while charging patients more for procedures with less impressive track records.

The concept is called “value-based insurance design,” and while that is just the kind of language that makes most people’s eyes glaze over, in reality it’s very simple.

Under value-based insurance, health providers give patients the most complete evidence-based information about the pros and cons and potential outcomes of various treatments and procedures available to address their health care problems. Patients participate in health care decisions with their doctors. And their insurance provides financial incentives to make decisions that likely will produce the best outcomes.

While the concept is simple, the execution is anything but.

“Value-based insurance design is inherently more complex than traditional benefit designs,” the article states. “This complexity presents a conundrum for policy makers working to create the health insurance exchanges contemplated under the Affordable Care Act.”

Pilot project under way

A demonstration project to test value-based benefits was launched by Engaged Public in January 2012 with 725 people who were enrolled in the San Luis Valley HMO. Engaged Public is a Denver-based organization that works to build public understanding and participation across a wide spectrum of policy issues, including health care.

Under the pilot project, the insurance plan offers a $50 gift card to patients who agree to use “patient decision aids,” which are booklets and DVDs that describe the various choices the patient has for treating several conditions from diabetes and congestive heart failure to joint replacements and hysterectomies. The informational packets are products of the Informed Medical Decisions Foundation.

For some services, such as immunizations, prenatal care and treatment of hypertension or depression, the insurance coverage requires no co-pay because the evidence is overwhelming that the treatments are cost-effective and generally lead to better outcomes.

But for other services where the evidence of good outcomes is less compelling, costs to the patient are higher. These include some CT, MRI and PET scans; invasive treatments for angina; and surgery for some spine conditions.

While the pilot project will continue through December, early findings indicate that both patients and doctors like the system.

“The doctors really like it,” said Barbara Yondorf, board member of the Center for Improving Value in Health Care, president of Yondorf and Associates and a co-author of the article. They find that patients know more about their health conditions and the options available to them, and “they ask good questions.”

The patients like it because “they learn that the greatest level of intervention – surgery – often is no more effective than less invasive treatments,” she said. “By leaving it up to the patient to decide, the patient often takes the less invasive procedure.”

Not only are patients less likely to experience the often painful and debilitating recoveries from invasive treatments, she said the process “empowers the patient,” who usually feels more satisfied with the outcome.

Yondorf said physicians were skeptical about providing the required level of engagement to patients in the decision-making process. “Their initial fear was that it would take a lot more time.”

Now, a year into the project, doctors have said they would like to be able to provide the information packets to all their patients, not just those in the pilot project.

Physicians in the San Luis Valley project also were surprised by the level of interest their patients have shown in the informational material.

Initially, the doctors recommended that the DVDs be no longer than 25 minutes, said Kelly Shanahan Marshall, project director for Engaged Public. But when given the choice of 25-minute informational DVDs or 45-minute ones, patients overwhelmingly chose the longer versions.

Among patients who review the materials, physicians say they are finding the patients have more realistic expectations of treatments, become more invested in taking care of themselves and express greater satisfaction with the health care experience.

Conclusions still to come

The Colorado Health Institute will analyze the findings generated in the San Luis Valley pilot in the summer of 2014. Provider and patient satisfaction levels, as well as the impacts on costs will be included in the report.

If the findings indicate the pilot is a success, scaling up the value-based insurance program and engaged-patient project will be challenging during an era when a lot of energy and resources are focused on creating health insurance exchanges with easy-to-understand comparisons among the various plans.

“Value-based insurance design’s inherent complexity can be challenging to explain to consumers and employers,” the Health Affairs article states.

Dr. David Downs, co-author of the article and medical director at Engaged Public, said implementing the concept will be difficult, especially in the early stages of developing the health insurance exchanges.

Dr. David Downs

“The insurance exchanges are meant to make an easier shopping experience,” he said. Including one more variation, such as value-based benefits, would make comparisons among plans that much more complicated for buyers.

But he anticipates that the potential for improving health outcomes, reducing costs and creating greater patient satisfaction ultimately may help the concept take hold.

“We now get people more engaged in their own health care and make them wiser participants in medical decisions,” he said.

Chris Adams, president of Engaged Public, said the process of involving patients in medical decisions creates a “leveling up of information” and allows for the personal values and goals of each patient to be critical parts of the process.

“We’d like to spread the concept as much as possible and improve health care as much as possible,” said Downs, who is a physician practicing internal medicine at Kaiser Permanente. (Downs also serves on the Solutions advisory committee.)

“Insurance reform is running on one track and health care reform is on another,” said Arnold Salazar, executive director of Colorado Health Partnerships in Alamosa. “They don’t come together until we see projects like this.”