How Payer COVID Waivers Model Value-Based Healthcare Spending
As the payer industry decides what the next step will be for coronavirus treatment cost-sharing, they have the opportunity to pivot towards value-based healthcare spending.
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- The healthcare system is currently at a juncture: as the coronavirus pandemic becomes more manageable, will the industry revolutionize its approach to value-based healthcare spending or will it fall back into old patterns?
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In April 2021, a couple of health insurers allowed their cost-sharing waivers for coronavirus treatment to expire.
No regulations mandated that payers cover coronavirus treatment. In fact, at the beginning of the pandemic, some major private payers preceded the federal government in waiving cost-sharing for coronavirus treatment. So the companies were entirely within their rights to eliminate the waivers at their own will.
However, is now the right time to be shifting financial responsibility back to patients?
According to Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design and professor of the division of general medicine, department of internal medicine and department of health management and policy at The University of Michigan, now is the time to make a change in healthcare spending, but not by hiking costs for patients.
“You can imagine, having devoted well over 20 years to enhancing access to and affordability of essential services, we were thrilled to see the policies that go beyond the federal mandate to cover COVID testing and the vaccine at 100 percent to extend it to COVID-related disease care,” Fendrick told Healthcare Strategies.
“So, this was very disappointing to hear, given that it's been immensely popular and hopefully removing some barriers from people who might be worried about getting the care they need for this horrendous pandemic.”
The coronavirus cost-sharing waivers foregrounded the very message that Fendrick has been writing and speaking about for years: the American healthcare industry needs to identify and cut out wasteful spending and bolster high-value spending.
“If you think about things like COVID emergency department treatments and hospitalizations, or the other high value services that we have been pursuing more generous coverage on for decades, these are services that are not overused. These are services, in fact, that if you put any barrier in front of people, financial or otherwise, they're less likely to use them,” Fendrick pointed out.
When considering how to eradicate wasteful healthcare spending, the focus naturally turns to providers and clinical settings. However, this particular instance of payers reinstating cost-sharing on high-value services demonstrated the role that payers can play in rethinking healthcare spending.
Fendrick proposed implementing strategies that are not as “blunt” as cost-sharing in order to lower costs. He recommended establishing a benefit design that ease access to clinical procedures that actually improve patient outcomes and that make low-value services less accessible. He also highlighted the role that value-based care can play in this process.
