When it comes to your health care, how do you define value?

For a growing number of employers in the region, there's a new, practical approach to answering that question when designing the medical benefit plans that provide health insurance coverage for most workers. Many experts believe the new definition of value could be the silver bullet for the health care cost crisis. Yet this new means of determining "value" is controversial and would limit the availability of certain services and procedures to those enrolled in health plans.

This new definition of health care value, known as "value-based benefits," determines the amount of coverage based on the value a patient receives from the product or service. In other words, how critical is it to one's life that he or she undergo a particular procedure or take a particular medication? If a service or procedure is deemed high-value, consumers pay little or no co-payment, essentially removing any barriers to it. Consumers pay a higher amount for something of lower value. In fact, some procedures and drugs would not be covered at all.

Health insurers, consumers and employers that sponsor benefits plans are understandably intrigued. Employers and their employees stand to save money, but there are trade-offs. Although significant issues block the implementation of the value-based approach, it is gaining momentum. Therefore, health-care consumers need to understand the implications.

The overall cost of the product or service is the key component that ultimately influences most health-insurance plan designs. Brand-name drugs cost more than generics, for example. But what if the brand-name drug results in a better outcome? Why should it cost more? With value-based benefits already in place in some prescription drug programs, this is a real-life example. The challenge is expanding the approach customarily in place with drug plans into medical benefits. Before that happens, two key questions demand answers.

Who determines value to the consumer?

Doctors ideally would determine the value of health care using evidence-based research that documents patient outcomes. Unfortunately, there is no universally accepted data that does this. Even if it did exist, getting consensus would probably be difficult because of debate around the benefits of certain drugs and services.

Some situations are straightforward. It's difficult to argue that patients with diabetes require medication to control high blood sugar. Likewise, a person with high blood pressure needs medication to avoid a heart attack or stroke. But what about other drugs, services and procedures not so clearly considered medically necessary? Who will determine whether chiropractic is a covered benefit for a person with back pain? Is physical therapy a better option? To what extent should either treatment be covered? Should one cost the patient less than the other?

How will costs be affected?

The impact of value pricing on overall costs for services and procedures is the second looming question. Theoretically, lowering out-of-pocket costs for health-care services of the greatest value will make patients more likely to use them. But as demand for those services grows, won't that increase costs? Increasing out-of-pocket costs for health care services and prescription drugs that aren't medically necessary could offset some of these additional costs. And by removing cost and access barriers to high-value services, chronic conditions could be better managed to avoid higher-cost services, such as emergency room visits and expensive surgical procedures. But the answers to these questions aren't clear and won't be until value-based benefit plans are more common.

Elements of value-based benefits are already part of some employer-sponsored plans. As more employers try this approach and report good results, more employers will consider it. And as more insurers adopt the value-based approach for prescription drugs and disease management, we can expect more regional employers to follow suit.

Are value-based benefits the solution to the health-care crisis? The answers aren't clear yet, but savvy consumers and employers will get in front of the curve and work together to understand the implications of a new approach to health-care costs that is gaining momentum across the region.