On Friday, December 23rd, 2016, the President signed the 2017 National Defense Authorization Act that calls for a pilot program to demonstrate and test the feasibility of incorporating Value-Based Insurance Design into the TRICARE program.  The pilot aims to improve health outcomes and enhance the experience of care for U.S. Armed Forces military personnel, military retirees, and their dependents.

Section 701:  (1) IN GENERAL — Not later than January 1, 2018, the Secretary of Defense shall carry out a pilot program to demonstrate and assess the feasibility of incorporating value-based health care methodology in the purchased care component of the TRICARE program by reducing copayments or cost shares for targeted populations of covered beneficiaries in the receipt of high-value medications and services and the use of high-value providers under such purchased care component, including by exempting certain services from deductible requirements.

The pilot includes an evaluation of how reducing or eliminating the cost-sharing for specified high-value medications and services impacts:  (I) adherence to medication regimens; (II) quality measures; (III) health outcomes; and (IV) beneficiary experience.

Access to quality care and containing costs are among the most pressing issues for our military personnel and our national well‐being and economic security.  Moving from a volume‐driven to value‐based military health delivery system requires a change in both how we pay for care and how we engage consumers to seek care.  However, less attention has been directed to how we can alter consumer behavior as a policy lever to bring about a more efficient delivery system.

In order to achieve our clinical and financial goals for military health care, value-driven consumer incentives — through benefit design reforms that promote smart decisions and enhanced responsibility — must be aligned with payment reform initiatives.

Evading the Dangers of a Blunt Approach to Beneficiary Cost-Sharing

With some notable exceptions, most U.S. health plans – including TRICARE – implement consumer cost-sharing in a ‘one-size-fits-all’ way, in that beneficiaries are charged the same amount for every doctor visit, diagnostic test, and prescription drug.  As TRICARE members are asked to pay more for their medical care, a growing body of evidence demonstrates that increases in consumer cost-sharing lead to decreases in the use of both non-essential and essential care.  Since there is evidence of both underuse of high-value services and overuse of low-value services in the TRICARE program, ‘smarter’ cost-sharing is a potential solution — one that encourages TRICARE members to use more of those services that make them healthier, and discourages the use of services that do not.

Unfortunately, research suggests that increasing ‘skin in the game’ has not produced a savvier health care consumer.


Infusing ‘Clinical Nuance’ into TRICARE

To more efficiently reallocate TRICARE medical spending and optimize health, the basic tenets of clinical nuance must be considered.  These tenets recognize that: 1) clinical services differ in the benefit provided; and 2) the clinical benefit derived from a specific service depends on the patient using it, who provides it, and where it is provided. Permitting ‘clinically nuanced’ variation in cost-sharing would give TRICARE plans a necessary tool needed to better encourage members to receive high-value services.



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