Medical Costs and Health Care Utilization Among Self-Insured Members with Carve-In Versus Carve-Out Pharmacy Benefits.

BACKGROUND: Pharmacy benefit can be purchased as part of an integrated medical and pharmacy health package-a carve-in model-or purchased separately and administered by an external pharmacy benefit manager-a carve-out model. Limited peer-reviewed information is available assessing differences in use and medical costs among carve-in versus carve-out populations. OBJECTIVE: To compare total medical costs per member per year (PMPY) and utilization between commercially self-insured members receiving carve-in to those receiving carve-out pharmacy benefits overall and by 7 chronic condition subgroups. METHODS: This study used deidentified data of members continuously enrolled in Cambia Health Solutions self-insured Blue plans without benefit changes from 2017 through 2018. Cambia covers 1.6 million members in Oregon, Washington, Idaho, and Utah. The medical cost PMPY comparison was performed using multivariable general linear regression with gamma distribution adjusting for age, gender, state, insured group size, case or disease management enrollment, 7 chronic diseases, risk score (illness severity proxy), and plan paid to total paid ratio (benefit richness proxy). Medical event objectives were assessed using multivariable logistic regression comparing odds of hospitalization and emergency department (ED) visit adjusting for the same covariates. Sensitivity analyses repeated the medical cost PMPY comparison excluding high-cost members, greater than $250,000 annually. Chronic condition subgroup analyses were performed using the same methods separately for members having asthma, coronary artery disease, chronic obstructive pulmonary disease, heart failure, diabetes mellitus, depression, and rheumatoid arthritis. RESULTS: There were 205,835 carve-in and 125,555 carve-out members meeting study criteria. Average age (SD) was 34.2 years (18.6) and risk score (SD) 1.1 (2.3) for carve-in versus 35.2 years (19.3) and 1.1 (2.4), respectively, for carve-out. Members with carve-in benefits had lower medical costs after adjustment (4%, P < 0.001), translating into an average $148 lower medical cost PMPY ($3,749 carve-out vs. $3,601 carve-in annualized). After adjustment, the carve-in group had an estimated 15% (P < 0.001) lower hospitalization odds and 7% (P < 0.001) lower ED visit odds. Of 7 chronic conditions, significantly lower costs (12%-17% lower), odds of hospitalization (22%-36% lower), and odds of ED visit (16%-20% lower) were found among members with carve-in benefits for 5 conditions (all P < 0.05). CONCLUSIONS: These findings suggest that integrated, carve-in pharmacy and medical benefits are associated with lower medical costs, fewer hospitalizations, and fewer ED visits. This study focused on associations, and defining causation was not in scope. Possible reasons for these findings include plan access to both medical and pharmacy data and data-informed care management and coordination. Future research should include investigation of integrated data use and its effect across the spectrum of integrated health plan offerings, provider partnerships, and analytic strategies, as well as inclusion of analyzing pharmacy costs to encompass total cost of care. DISCLOSURES: This study received no external funding. The study was jointly conducted by employees of Cambia Health Solutions and Prime Therapeutics, a pharmacy benefit manager servicing Cambia Health Solutions. Smith, Lam, Lockwood, and Pegus are employees of Cambia Health Solutions. Qiu and Gleason are employees of Prime Therapeutics.

Pursuing the Triple Aim: The First 7 Years.

UNLABELLED: POLICY POINTS: In 2008, researchers at the Institute for Healthcare Improvement (IHI) proposed the Triple Aim, strategic organizing principles for health care organizations and geographic communities that seek, simultaneously, to improve the individual experience of care and the health of populations and to reduce the per capita costs of care for populations. In 2010, the Triple Aim became part of the US national strategy for tackling health care issues, especially in the implementation of the Patient Protection and Affordable Care Act (ACA) of 2010. Since that time, IHI and others have worked together to determine how the implementation of the Triple Aim has progressed. Drawing on our 7 years of experience, we describe 3 major principles that guided the organizations and communities working on this endeavor: creating the right foundation for population management, managing services at scale for the population, and establishing a learning system to drive and sustain the work over time. CONTEXT: In 2008, researchers at the Institute for Healthcare Improvement (IHI) described the Triple Aim as simultaneously "improving the individual experience of care; improving the health of populations; and reducing the per capita costs of care for populations." IHI and its close colleagues had determined that both individual and societal changes were needed. METHODS: In 2007, IHI began recruiting organizations from around the world to participate in a collaborative to implement what became known as the Triple Aim. The 141 participating organizations included health care systems, hospitals, health care insurance companies, and others closely tied to health care. In addition, key groups outside the health care system were represented, such as public health agencies, social services groups, and community coalitions. This collaborative provided a structure for observational research. By noting the contrasts between the contexts and structures of those sites in the collaborative that progressed and those that did not, we were able to develop an ex post theory of what is needed for an organization or community to successfully pursue the Triple Aim. FINDINGS: Drawing on our 7 years of experience, we describe the 3 major principles that guided the organizations and communities working on the Triple Aim: creating the right foundation for population management, managing services at scale for the population, and establishing a learning system to drive and sustain the work over time. CONCLUSIONS: The concept of the Triple Aim is now widely used, because of IHI's work with many organizations and also because of the adoption of the Triple Aim as part of the national strategy for US health care, developed during the implementation of the Patient Protection and Affordable Care Act of 2010. Even those organizations working on the Triple Aim before IHI coined the term found our concept to be useful because it helped them think about all 3 dimensions at once and organize their work around them.

How Can We Link General Medical and Behavioral Health Care? International Models for Practice and Policy.

A range of integration models for providing effective care to individuals with comorbid general medical and behavioral health conditions have been described and tested in varied settings internationally for several subsets of this population. This column examines models in three countries selected to showcase implementation in a variety of health systems: the national health system in England, nationally regulated individual insurance market in the Netherlands, and a mixture of employer-sponsored and government-funded health insurance plans in Japan. The authors describe a set of key practices for and challenges to the successful implementation of these models.

Employers shift costs for alternative medicine.

When considering a complementary and alternative medicine benefit, it is recommended that companies determine whether it is likely to improve productivity and help to attract and retain talented workers. Employers should also determine whether the CAM benefit is likely to reduce overall medical costs by decreasing use of treatments such as surgery, physical therapy, and pharmaceuticals.

Complementary health care: a welcome addition to an employee benefits program.

One up-and-coming approach to controlling health care costs is complementary health care, which does not rely on advances in high-tech, invasive technology or expensive new pharmaceuticals, but rather focuses much more on the high-touch, direct practitioner care. It often offers lower cost alternatives to traditional medicine.

The logic of transaction cost economics in health care organization theory.

Health care is, at its core, comprised of complex sequences of transactions among patients, providers, and other stakeholders; these transactions occur in markets as well as within systems and organizations. Health care transactions serve one of two functions: the production of care (i.e., the laying on of hands) or the coordination of that care (i.e., scheduling, logistics). Because coordinating transactions is integral to care delivery, it is imperative that they are executed smoothly and efficiently. Transaction cost economics (TCE) is a conceptual framework for analyzing health care transactions and quantifying their impact on health care structures (organizational forms), processes, and outcomes.

Managed behavioral healthcare in the private sector.

Employers, in their search for cost containment and quality improvement, have driven the development of the behavioral health managed care vendor. More specifically, the behavioral health carve-out is an innovation that was developed to respond to employer and, more recently, health plan needs. Now that the product has matured, it is increasingly being asked to justify its existence. Costs have certainly been maintained, but improvements in quality have not always been evident. The issues the authors address include, as cost pressures continue, can the industry deliver on its promise to improve care? Will it need to evolve to yet another level, with new or different features?

Direct provider contracting: one employer's experience.

Employers and unions typically offer an array of health care options to their plan participants including many managed care options. However, until recently, few have considered contracting directly with an integrated delivery system (IDS), therefore circumventing health plans altogether. This article offers a case study of one employer's experience with direct IDS contracting, including employee contribution strategy, benefits design and evaluation of the delivery system.

Intranets emerging as new human resources platform.

Some pioneering health care organizations are taking the innovative step of capitalizing on their intranets, private networks that use Internet technologies and protocols, for human resources purposes. These providers and payers plan to use their intranets to enable employees to enroll a new family member in a benefit plan or check how many vacations days they have left.

Carve outs: definition, experience, and choice among candidate conditions.

Despite increasing discussion of carve outs as a device for controlling costs and improving quality of care, little systematic information exists on the effects of carve outs on cost, quality, and access to healthcare services. In the absence of such information, a conceptual framework is useful for deciding which conditions and populations may benefit from carve-out strategies, and how such arrangements should be designed. After carefully defining carve outs, and distinguishing them from other similar arrangements, this paper identifies five characteristics of a healthcare condition that increase the likelihood that a carve out's benefits will outweigh its drawbacks. The paper also examines the advantages and disadvantages of alternative approaches to structuring and administering carve-out arrangements, including how to pay for services, how to integrate them with mainstream care, provisions for consumer choice and provisions for carve-out accountability. The piece concludes that population carve outs, in which all the healthcare problems of a group of patients are managed by the carve-out organization, have inherent advantages, and identifies candidate conditions for population carve outs.

Employer-provider partnerships in advanced managed care: human assets risk management.

Competitive forces have increased recognition of the strategic value of occupational and environmental medicine. Opportunities to enhance workforce health and productivity abound in the managed care environment.

Direct contracting: a Minnesota case study.

During 1996, HealthEast Care, Inc., a healthcare provider-owned and governed direct-contracting company, successfully responded to a request for proposal from the metropolitan Minneapolis-St. Paul-based Buyers Health Care Action Group (BHCAG), a coalition of self-insured employers, to provide healthcare services to members of BHCAG's Choice Plus health plan. HealthEast Care developed a care system proposal for BHCAG that balanced consumer and purchaser expectations with historical healthcare costs. Providers are reimbursed for contracted healthcare services according to a unique fee-for-service, budget-based payment model. BHCAG chose to contract with HealthEast Care and 23 other care systems in the metropolitan Minneapolis-St. Paul area and other parts of Minnesota to serve more than 117,500 Choice Plus enrollees.