Hewitt Model Helps Employers Quantify Value-Based Health Plan Impact

August 14, 2007 (PLANSPONSOR.com) - Hewitt Associates is working with university researchers to create a model that helps employers quantify the cost impact of implementing a value-based design with regard to prescription drugs.

According to a press release , Hewitt is helping companies develop value-based designs that lessen or get rid of financial barriers for evidence-based health care services that have proven to be effective treatments for certain conditions. The consultant also hopes to increase cost sharing for services that have not been proven effective.  

Hewitt’s Value-Based Design Model – now focused on prescription drugs – gives companies a real-time analysis of the compliance effects and financial impact of reducing employee cost sharing for specific health care services and increasing employee cost sharing for others. Hewitt said. The tool uses companies’ existing prescription drug utilization and cost data to help them understand how to make clinically desirable plan design changes without increasing overall health care costs.

According to recent Hewitt research, almost one in five (19%) large companies have implemented value-based plan designs, and another 40% are interested in learning more.

The researchers behind who designed the model are A. Mark Fendrick, M.D., of the University of Michigan, and Michael E. Chernew, Ph.D., of Harvard Medical School.

“Once a value-based design is put in place, the initial financial investment in the increased use of high-value services will likely be offset by reductions in costly hospitalizations and emergency department visits, as well as decreases in employee absenteeism and disability costs that come with ill health,” said Fendrick, in a press release about the product.