A wellness program added to the state employee health plan as part of a controversial 2011 concession package led to significant increases in the use of preventive care and a drop in certain emergency room visits, but it’s still too soon to say if it will save the state money, according to a study published Monday in the journal Health Affairs.
The authors suggested that other employers could use certain unique aspects of Connecticut’s program as a model, but added that they should balance the potential benefits – improved health and productivity – with the potential for higher costs as more members get care.
As health care costs rise, many employers have used so-called “value-based” insurance designs in their benefits packages, aiming to improve workers’ health by encouraging the use of care deemed to be of high value – such as reducing or eliminating cost-sharing for drugs to treat diabetes or high blood pressure that could ultimately help prevent costly complications – or discouraging the use of other services.
But Richard A. Hirth, research director of the Center for Value-Based Insurance Design at the University of Michigan and the study’s lead author, said the Connecticut health enhancement program was unusual in both its design and the scope of changes that occurred after it was implemented in October 2011.
Typically, programs are voluntary and don’t include consequences for those who don’t meet the requirements. Studies have found statistically significant, but fairly small, effects, he said.
Connecticut’s program is voluntary, but those who participate pay lower premiums – by $100 per month – and reduced cost-sharing. And members can be removed from the program and lose those perks if they don’t comply with the program requirements, which include getting certain preventive services and, for those with certain chronic conditions, participating in disease education and counseling programs.
The study examined enrollment and claims data for 64,165 people aged 18 to 64 who were covered by the state employee plan from July 1, 2010 to June 30, 2013, and found significant increases in the use of preventive care.
The proportion of enrollees who had a preventive office visit rose from 53 percent the year before the program took effect to 68.4 percent in the first year. Those aged 50 and older who got lipid screenings rose from 61.5 percent to 80.8 percent, while the rate of colonoscopies among plan members in that age group rose from 13.3 percent to 18.2 percent.
Those and other increases were not matched by a comparison group of 215,314 people covered by state employee plans in six other states in the Eastern half of the country.
Despite the first-year gains, in some cases, the use of services dropped from the program’s first to second years. Hirth said it wasn’t clear why and said data from subsequent years would help determine if it was a blip or a trend. Although not getting a required service could lead members to be dropped from the program, Hirth said the state tried not to disenroll people if possible.
The state plan also includes a $35 co-pay for members who go to the emergency room when there is a reasonable medical alternative and are not admitted to the hospital. The rate of such visits among Connecticut state employee plan members dropped from 249 per 1,000 enrollees before the plan took effect to 233 in the second year. The comparison group had a far lower baseline rate – 159 per 1,000 members – but saw a rise over the two years studied.
The authors wrote that it wasn’t clear whether the reduction in Connecticut’s program stemmed from the co-pay or increased use of preventive care.
Increased spending not surprising
As for the fiscal impact of the program, the researchers found that members’ out-of-pocket costs dropped, but the overall expenses for the plan increased. Hirth said some increased spending in the early years isn’t surprising.
“You’re encouraging people to come in and get more services up front in the hopes of improving their health status down the road,” he said.
But Hirth said evaluating the program’s impact on costs after five years would be a reasonable timeframe.
State Comptroller Kevin Lembo, whose office oversees the plan, said even if costs rise in the short-term under a value-based plan, it’s a good thing if it means people are getting more primary care and taking their medications, rather than going to the emergency room or going to specialists when it might not be necessary.
And Lembo said that in the early years of the program, the state spent less on the health plan than had been budgeted, although he said it’s important not to assume those savings were solely the result of the health enhancement program, rather than other market changes, such as generic drugs for popular medications becoming available.
But preliminary results from another study expected to be released later this year found that the total medical costs of state employee plan enrollees had grown at a slower pace than they would have without the program – and compared to similar local groups, Lembo said.
The researchers didn’t examine the program’s return on investment, but reported that the state spent about $3.9 million per year on the program, which requires a staff of about 20 fulltime-equivalent employees. About half are nurses who handle disease management and patient education.
“Other states or private payers considering this type of program will want to balance the potential for improved health and productivity that comes from increasing the use of high-value services with the potential for higher costs resulting from that increased use,” the authors wrote.
The study found that per-person spending was considerably higher among enrollees of Connecticut’s state employee plan than in the comparison group in the year before the health enhancement program began – $7,914 compared to $4,375. The researchers wrote that the difference appeared to be largely the result of higher prices in Connecticut, although higher use of health care services was also a factor.
The study comes amid calls for concessions among state employee unions – although those that have specified changes to employee health benefits have not targeted the wellness program incentives themselves – as the state faces a major budget deficit. Union leaders have rejected those requests.
It also comes amid increasing interest among employers in value-based insurance plan designs and as a state-level health reform effort seeks to develop a model that employers could use.
Sticks and carrots
Experts on value-based insurance plans often talk about using both “carrots” – positive incentives, including reduced cost-sharing – and “sticks” – such as raising cost-sharing for services considered to be of low value.
Asked about changes he would recommend for the program, Hirth suggested that the program could add more “sticks,” such as increasing out-of-pocket costs for low-value services. But he acknowledged that doing so is usually more controversial than adding “carrots.”
Going forward, changes could include implementing programs to address obesity and smoking cessation, said Sal Luciano, executive director of Council 4 of the American Federation of State, County and Municipal Employees.
Luciano, who sits on a labor-management committee that addresses health care cost containment in the state employee plan, said officials are also looking to make data on outcomes for different health care providers available to plan members – and possibly the public – to help them make decisions about where to seek care.
That strategy is already becoming more popular in the private sector. Steve Wojcik, vice president of public policy at the National Business Group on Health, said some employers have begun to contract selectively with better-performing providers for high-cost procedures like cardiac or orthopedic surgery. In some cases, a health plan would cover a smaller network of providers, while other plans cover a wide network but require members to pay less to see providers deemed to have higher quality and efficiency.
A 2015 survey the organization conducted with the firm Towers Watson found 11 percent of employers already had such a network, and 50 percent were considering implementing one in the next three years, and Wojcik said doing so is becoming more feasible as data on price and cost differences become available.
“I think there’s a growing acceptance from the employees or plan participants to say hey, just because I’m paying more doesn’t mean it’s better quality,” Wojcik said.