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Health IT Vendors Push Value Based Insurance Design

Passage of legislation supporting a Medicare test of VBID, which lowers patients' costs for medical care to encourage them to take care of their chronic illnesses, could boost investment in healthcare software, hardware and services.

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If the VBID model is to gain further traction, however, the claims payment system must be able to support ad hoc changes in benefits. She also noted that many claims systems have limited capacity to integrate personalized benefits within the backend claims environment.

"The real shift is the ability to create benefits and incentives that then track to claims payment and care management applications so that the financial incentives are upheld. It is relatively easy to inform a member that a co-pay will be waived based on specific behavior; more difficult to automate this, as information may be behavioral or clinical or from health and wellness program registrations," Young said. "This requires a more flexible benefit and claims processing environment that can use additional processing variables and automate member level changes."

At the time the bill was introduced, Sen. Hutchison wrote an editorial that was published in the Houston Chronicle supporting the VBID model. She wrote: "A number of employers have shown the cost-effectiveness of reducing prescription drug copayments through a value-based insurance design model. A notable example is Pitney Bowes, which reduced copayments for asthma and diabetes medications for their employees. Because more employees took their medication regularly, the company found that it saved more than a million dollars through reduced hospitalizations, fewer emergency room visits and less need for expensive 'rescue' medications."

To help impress upon lawmakers the importance of the legislation, executives from the Trizetto Group, a company that provides VBID technology solutions, recently held a special briefing for congressional staffers on the bill.

"We were on Capitol Hill promoting and encouraging passage of the bill because it's a strong way to help get patients with chronic conditions more effective treatment while reducing their costs and improving their quality of care," said Gail Knopf, VP of VBID strategy at Trizetto.

Trizetto, SeeChange Health, and other companies are actively developing software platforms that use claims administration systems to identify and reduce chronically ill patients' out-of-pocket costs for pharmacy and medical services.

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