June 1, 2011

Total Health evaluation aims to help purchasers’ dollars go farther

On January 1, 2011, Group Health introduced a new "value-based" medical plan for its mid-large group market. The groundbreaking product addresses a top priority for health care purchasers: finding cost savings that don't compromise employee health or quality of care.

D. Grossman, MD, MPH,
and C. Johnson
Unlike traditional medical plans that focus only on managing costs, value-based plans use incentives and disincentives to steer patients toward evidence-based, high-value services—and away from unproven, low-value services. The goal is better health for less, achieved by preventing costly future treatment and limiting overtreatment.

Group Health began piloting this novel approach in January 2010 with the rollout of Total Health—a valued-based medical plan for its more than 8,000 employees. Leaders in the Human Resources Department developed the plan with help from clinicians, labor unions, health plan actuaries, consultants, and researchers, including GHRI Senior Investigator David Grossman, MD, MPH, who also serves as Group Health’s medical director of preventive care.

Described by Executive Vice President of Human Resources Cindy Johnson as "state of the art," Total Health is among the nation's first medical plans to link wellness and insurance design:

  • Co-pays are waived for many chronic illness medications—and increased for low-value procedures such as high-tech radiology
  • Subsidies are provided for weight management and smoking cessation programs
  • Financial incentives are offered through the employee health promotion program

Recognizing the opportunity for a valuable natural experiment, Dr. Grossman, teamed up with GHRI Associate Investigator Paul Fishman, PhD, a health economist, to seek federal research funding. Their team was awarded $2 million from the Agency for Health Research and Quality last summer to evaluate Total Health's impact on employee health, quality of life, productivity, health care use, and costs.

The four-year evaluation may soon fill a gap in published research on value-based insurance design because it includes a control group: employees from Kaiser Permanente Colorado, GHRI's longtime HMO Research Network partner. Kaiser researchers also bring expertise in evaluating employee productivity, a key issue from the purchaser's perspective.

"This research will help us understand how to improve value-based products," explains Dr. Fishman. "Like the patient-centered medical home, it's keeping Group Health on the forefront of implementing and evaluating cutting-edge delivery and payment models."

"Cindy Johnson and her staff have been extremely receptive to the program's potential for research," adds Dr. Grossman. "It would have been easier for them not to take on this scientific evaluation. But they recognize and are proud of their role as innovators."