Stakeholders of all stripes are at near-consensus on the importance of adequate health care coverage for all Americans. To date, steadily rising costs and the expanding ranks of the uninsured have led policymakers to concentrate on how to finance universal coverage. Communities and states that have succeeded in developing a workable financing structure are now faced with the equally challenging task of constructing a benefits package that is fair, affordable, and sustainable.
In order to create viable coverage models, we must examine certain assumptions: that all health care has value and must be covered; that insurance is to pay for services rather than to meet agreed-upon health care needs; and that the priorities of the individual trump the priorities of society. It is unlikely that expanded coverage plans -- whether at the community, state, or national level -- will be sustainable without questioning these widely held assumptions.
There are four key strategies for developing a benefits package in an era of health reform. Each can be considered independently or in various combinations.
- Targeted cost sharing. Asking individuals to pay more for coverage -- by contributing higher premium payments, co-payments, co-insurance, or deductibles -- is often the first step that employers take to reduce their own cost burden. However, for lower-income individuals (who are most likely to be the target of coverage expansion plans), high cost sharing limits access to services; if used indiscriminately, this approach can render insurance coverage meaningless. Some organizations now incorporate creative cost sharing arrangements that encourage the efficient use of services and health-promoting behaviors and discourage the use of high-cost, low-value interventions.
- Efficient providers. Better coordination of care, more selective use of specialists, and restricting choice can yield meaningful cost savings without sacrificing quality. In developing an affordable benefits package, policymakers can assess the efficiency and quality of local providers, be selective about which providers are used, establish treatment standards, and create mechanisms to monitor care delivery.
- Treatment value. Medical treatment is frequently provided despite insufficient benefit to the patient. Scarce resources can be allocated more efficiently by adhering to evidence-based medical practices and by incorporating cost-effectiveness as a criterion for coverage.
- Prioritizing needs. Health care coverage has become increasingly comprehensive as medical science has extended its reach into ever more aspects of the human condition. To prioritize needs is to differentiate between health care that supports the most essential aspects of human functioning and that which serves to enhance an individual’s quality of life. If societal resources are limited, we must ask ourselves which health care needs must be met for everyone and which must be the responsibility of the individual.
The task for policymakers is to find the appropriate mix of these four strategies commensurate with populationbased needs, finite resources, and community values. While the question of public values has not been a routine part of the health debate, some communities have used citizen engagement tools to help define the specifics of coverage. Small group interactive methods like CHAT® transcend the limitations of public opinion surveys to help us understand what people value and why.
While medical science has a seemingly boundless capacity to offer improvements in health care, society does not have a boundless capacity to pay. The task of expanding coverage responsibly and fairly requires policymakers to make decisions that take into account the voices of those who will benefit from the coverage and the larger society that will finance it.
This paper discusses benefits design as an essential element of health care reform and as indispensable to achieving cost containment. It presents various strategies for crafting less costly high-value coverage, cites examples of health plans that have done so, and proposes a process that can build consensus for creating sustainable benefits packages.
For the complete paper, please see the PDF file attached below.