High deductible health plans (HDHPs) have been an important tool to address rising premiums, but they do so by shifting costs to consumers and by lowering the utilization of both high-value and low-value care.
What’s the solution? The Medical Episode Spending Allowance (MESA) Plan, a new value-based insurance design with more finely calibrated incentives for consumers and providers. MESA takes value-based insurance design to a whole new level, improving quality of care while lowering costs.
The MESA Plan: How it Lowers Costs
- MESA is based on a reference benefit model, which allows consumers to choose service providers that offer high quality care at a lower price.
- Members pay out-of-pocket only when the cost of care extends above the specified allowance for a given episode of care.
- Consumers have the tools they need to select the best care for them. Members can research procedures, identify providers in their area, and view provider’s costs and quality rating.
- Through a proposed data analysis tool, MESA helps consumers select providers based on quality and cost of care.
- This is done in part by identifying Potentially Avoidable Complications (PACs) associated with providers in the network, a significant driver of cost, and a reliable indicator of quality.
High Deductible Health Plans: Why We Need an Alternative
- While consumers have seen slower rises in premiums in recent years, they have not been as fortunate with costs resulting from high deductibles, and employer-sponsored health plan premiums are slated to rise again at two to three times the rate of inflation.
- Over the last five years, the average single deductible amount increased from $991 to $1,478.
- That’s due in part to the growing enrollment of consumers in HDHPs, from 17 percent of covered workers in 2011 to 29 percent in 2016.
- These rising costs are a problem for people with chronic conditions who use the health care system more frequently, forcing consumers to take on high costs or forego care.
- HDHPs are blunt tool for lowering costs, and they don’t work for everyone. They don’t provide incentives to providers to deliver high value care, and they don’t help consumers differentiate between high value care services and low value care services.
The MESA solution will be tested in selected pilot sites throughout the United States in years to come. The criteria for sites to become pilots include willing employers and providers, current engagement in and familiarity with alternative payment models, and a commitment to price and quality transparency. Those interested in becoming pilot sites should contact Altarum at email@example.com.