Altarum Introduces Innovative New Health Benefit Plan

WASHINGTON, Sept. 12 -- Altarum Institute issued the following news release:

To provide consumers with an affordable alternative to high deductible health plans (HDHPs), Altarum has created an innovative new model for those who use health care the most. The Medical Episode Spending Allowance (MESA) plan, developed with support from the Robert Wood Johnson Foundation, is especially well suited for those with chronic or serious health conditions, and takes value-based insurance design to a whole new level, improving quality of care while lowering costs.

"Employers and consumers are looking for alternatives to increasingly unaffordable health coverage, and finding a solution that works is essential," said Francois de Brantes, vice president and director of Altarum's Center for Payment Innovation. "That's what our MESA Blueprint is all about. By turning the high deductible health plan on its head, the MESA plan significantly reduces the potential for people with on-going illnesses from foregoing needed care."

How Does MESA Work?

MESA's incentives are finely calibrated to encourage consumers to seek out high value care and for providers to deliver it. The plan is based on a reference pricing model, so consumers can choose service providers that offer high quality care at a lower price.

Members pay out-of-pocket only when the cost of care extends above the specified allowance for a given episode of care. Plan members who select network providers that have accepted financial risk--for example through a bundled payment--could potentially avoid out-of-pocket expenses entirely. MESA also arms consumers with tools to research procedures, identify providers in their area, and view providers' costs and quality ratings, so they can select the best care.

"As Americans are being asked to pay more for their health care, health insurance innovations, such as the Medical Episode Spending Allowance (MESA), that align consumer and provider incentives on quality and cost measures are an essential step forward," said A. Mark Fendrick, MD, director of the University of Michigan Center for Value-Based insurance Design. "Strategies that reduce the patients' out of pocket cost burden for clinically indicated services provided by from high performing clinicians are a necessary and important strategies to achieve the Triple Aim."

"The Kentuckiana Health Collaborative, a coalition of employers, payers, providers, and consumers of health care, supports alignment of incentives to reduce barriers to high-quality, high-value care. We strongly encourage efforts to drive adoption of rational, creative alternative payment models and commend Altarum's efforts to innovate with MESA," said Stephanie Clouser, Kentuckiana Health Collaborative data scientist.

A New Path Forward

Each MESA benefit is finely tuned to incentivize the physician/patient relationship towards mutual cooperation and motivation to do the right thing, at the right time, in the right place--in a fully transparent marketplace. Information on the benefit model is available in the MESA blueprint, which provides employers and payers with a practical understanding of the framework, including compliance with legal and regulatory statues and actuarial equivalence to existing group health plans.

"MESA provides a comprehensive plan that marries payment reform with benefits reform, provider engagement with consumer engagement, and physician accountability for costs of care with patient accountability for managing their health and costs of care," said Emmy Ganos, program officer at the Robert Wood Johnson Foundation. "Many of the concepts aren't new--they are tried and tested--but their combination is, quite simply, a better solution."

That solution will be tested in selected pilot sites throughout the United States in years to come. The criteria for sites to become pilots include willing employers and providers, current engagement in and familiarity with alternative payment models, and a commitment to price and quality transparency. Those interested in becoming pilot sites should contact Altarum at [email protected].

From Payment Reform to Benefit Reform

Over the past ten years, the Center for Payment Innovation's PROMETHEUS Payment(R) model has revolutionized the way we pay for medical care. PROMETHEUS packages payment around a comprehensive episode of medical care that covers all patient services related to a single illness or condition. The model has been used as a basis for most of the public and private sector bundled payment models that are implemented in the United States today. One of its offshoots is the PROMETHEUS Analytics(R) software, which can help power the MESA model and now revolutionize health benefits.