Designing Benefits With Evidence in Mind

February 2006
EBRI Issue Brief #290
Paperback, 16 pp.
PDF, 162 kb
Employee Benefit Research Institute, 2006

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Executive Summary

• This Issue Brief explores whether an old concept (benefit design) and a newer concept (evidence-based clinical information) can be more explicitly linked in order to better focus care on health improvement, and to discourage services and costs that do not result in improved health.

Potential of evidence-based medicine not yet successful—The better use of evidence in coverage design could reduce the use of marginal services and control some of the variation in utilization among providers. Recent efforts to move in this direction have not been particularly successful, but they have led to the identification of obstacles that, if overcome, will increase the chances of significant progress in this effort.

Interest is growing in evidence-based medicine—There is growing interest in more explicit approaches to benefit language that better integrate evidence, encourage its use, reward improvement in the quality of evidence, and provide more precision for decision makers. These developments give credibility to a movement in which the demand side of the U.S. health care equation is becoming ever more explicit about exactly what it expects for the enormous sums it is transferring to the supply side of the health care system.

Evidence is essential to success of consumer-driven health plans—Consumer-driven plans use various strategies to offer patients more and better information. They need to do so, since evidence consistently shows cost sharing is indiscriminant in its effects, reducing utilization of valuable services that improve health as much as it reduces ineffective services. Without more transparency, consumers may conclude that these efforts to provide patients with better information are incomplete or biased.

Obstacles to increased use of evidence—Major obstacles to increased use of evidence in health benefits include a perceived lack of sufficient evidence to proceed, credibility and transparency, benefit design language, financial relationships, and administrative costs.

Key elements—Among the major factors in designing evidence-based health benefits are analysis, decision making, communication; synthesis of evidence used in deciding what is covered or excluded; and primary studies that would help determine the value of various benefits.

Oregon example—The state of Oregon has developed a language of benefit design that is organized around combinations of conditions and treatments that use medical evidence in determining covered conditions and approved treatments. Health plans currently administering the Oregon Health Plan benefit have been profitable over the course of multiple changes in the plan.